The newly amended Danish Tax Control Act (skattekontrolloven) requires companies to prepare their transfer pricing documentation contemporaneously and it must be ready no later than at the time for submission of the tax return. This means that the deadline for preparing the 2018 transfer pricing documentation is 30 June 2019 for companies with a financial year that follows the calendar year.
The 2018 transfer pricing documentation is the first year under the amended Act that requires transfer pricing documentation to be prepared contemporaneously. For many companies this means that the timing of the process for preparing the transfer pricing documentation – and tax return – must be tailored to meet the new compliance requirements.
As of 22 March 2019, companies having a financial year that follows the calendar year have 100 days to prepare the transfer pricing documentation for 2018. It is therefore important that the process for preparing the transfer pricing documentation is initiated in due time to ensure compliance with the rules.
If the Danish Tax Authorities request the transfer pricing documentation from a taxpayer, and the taxpayer is not able to submit a compliant transfer pricing documentation, the Danish Tax Authorities can impose penalties (up to DKK 250,000 per income year) or issue a discretionary assessment.
If you have any questions in relation to the above, please contact us. We assist many of our clients with reviewing, updating or preparing their transfer pricing documentation – both in Denmark and abroad.
For a more detailed description of the Danish transfer pricing documentation requirements, please see the attached PDF:
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