{"id":5472,"date":"2021-12-13T12:38:21","date_gmt":"2021-12-13T11:38:21","guid":{"rendered":"https:\/\/skeppsbronskatt.se\/?p=5472"},"modified":"2021-12-16T10:27:00","modified_gmt":"2021-12-16T09:27:00","slug":"change-of-danish-documentation-rules","status":"publish","type":"post","link":"https:\/\/skeppsbronskatt.se\/en\/2021\/12\/13\/change-of-danish-documentation-rules\/","title":{"rendered":"Change of Danish documentation rules\u00a0\u00a0"},"content":{"rendered":"<p><b><span data-contrast=\"none\">On 25 November 2021,\u00a0a\u00a0new legislation was adopted in Denmark which means\u00a0that taxpayers in Denmark are exempted from the requirement to submit documentation for\u00a0domestic\u00a0intra-group transactions. The\u00a0new rules\u00a0apply to financial years beginning on or after 1 January 2021.<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"none\">Background<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Last year Denmark introduced\u00a0a\u00a0legislation\u00a0providing\u00a0that transfer pricing documentation must be submitted to the\u00a0tax\u00a0agency no later than 60 days after the\u00a0deadline for filing the\u00a0tax return.\u00a0This included both\u00a0the\u00a0Master and Local file.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">When\u00a0the legislation regarding the\u00a0mandatory submission\u00a0of\u00a0documentation was\u00a0introduced,\u00a0questions were raised as to whether\u00a0domestic\u00a0transactions &#8211; which\u00a0previously should be included in the transfer pricing documentation\u00a0in Denmark &#8211; could be exempted from the new rules to\u00a0lighten\u00a0the\u00a0administrational burden\u00a0for companies.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"none\">The\u00a0impact of the new rules<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0new\u00a0regulation\u00a0means\u00a0that taxpayers in Denmark with purely domestic intra-group transactions (DK &lt;\u2013&gt; DK)\u00a0is not required to submit the\u00a0transfer pricing documentation. It should\u00a0however\u00a0be noted\u00a0that these transactions must still comply with the arm&#8217;s length principle. The Danish tax authority may also, in an audit, request that the company provides documentation\u00a0in order to\u00a0assess whether the transactions are arm&#8217;s length or not.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"none\">Additional changes\u00a0<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559738&quot;:375,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">In addition to the\u00a0changes\u00a0above, the new rules\u00a0also\u00a0imply\u00a0that benchmarking studies will be required to a greater extent than\u00a0before.\u00a0Benchmarking studies\u00a0should be\u00a0prepared\u00a0if it can provide relevant information for the\u00a0applied transfer\u00a0pricing method. For example, if the transactional net margin method (TNMM) is used, a benchmark study can provide relevant information on\u00a0arm\u2019s length\u00a0net margins.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559738&quot;:375,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">If a benchmark study has been\u00a0prepared, it\u00a0shall\u00a0be attached and submitted together with the documentation.\u00a0Penalties can be\u00a0levied\u00a0if\u00a0the\u00a0benchmark studies are\u00a0missing.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559738&quot;:375,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b><span data-contrast=\"none\">Our comments<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0mandatory submission of documentation\u00a0to the tax\u00a0agency\u00a0has\u00a0noticeable\u00a0tightened the\u00a0transfer pricing rules in Denmark, and the\u00a0possibility of exempting companies with only domestic transactions thus meant a relief for many groups.\u00a0That said,\u00a0the new rules do not mean that domestic transactions can be priced without regard to the arm&#8217;s length principle. Exempt companies must still analyze which\u00a0transfer\u00a0pricing method is\u00a0the\u00a0most appropriate in their pricing and be prepared to substantiate that method in an\u00a0audit.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559738&quot;:375,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"none\">If you need help with your documentation or have any questions regarding the transfer pricing rules in Denmark, you are welcome to contact us.\u00a0<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:2,&quot;335559738&quot;:375,&quot;335559739&quot;:180,&quot;335559740&quot;:405}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 25 November 2021,\u00a0a\u00a0new legislation was adopted in Denmark which means\u00a0that taxpayers in Denmark are exempted from the requirement to submit documentation for\u00a0domestic\u00a0intra-group transactions. The\u00a0new rules\u00a0apply to financial years beginning on or after 1 January 2021.\u00a0 Background\u00a0 Last year Denmark introduced\u00a0a\u00a0legislation\u00a0providing\u00a0that transfer pricing documentation must be submitted to the\u00a0tax\u00a0agency no later than 60 days after [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":5465,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[302],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v22.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Change of Danish documentation rules\u00a0\u00a0 - Skeppsbron Skatt<\/title>\n<meta name=\"description\" content=\"On 25 November 2021,\u00a0a\u00a0new legislation was adopted in Denmark which means\u00a0that taxpayers in Denmark are exempted from the requirement to submit documentation for\u00a0domestic\u00a0intra-group transactions. 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