Flagging out definition
Flagging out means establishing and licensing vehicles in a country different to the ‘home’ country of the vehicle operator. Some companies will ‘flag out’ in order to avoid paying higher taxes in one country or to benefit from lower taxes in another country. It has become particularly attractive for medium and large companies and can be reasonably performed by companies with a fleet of more than 20 vehicles. For smaller companies the related costs for founding and maintaining a subsidiary abroad would typically exceed the attainable cost savings.