The newly amended Danish Tax Control Act (skattekontrolloven) requires companies to prepare their transfer pricing documentation contemporaneously and no later than at the time for submission of the tax return. This means that the deadline for preparing the 2019 transfer pricing documentation is 30 June 2020 for companies with a financial year that follows the calendar year.
The transfer pricing documentation for 2019 is the second year under the amended legislation requiring 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.
Companies having a financial year that follows the calendar year will have 100 days to prepare their transfer pricing documentation for 2019, and thus need to start the process for preparing their transfer pricing documentation in a timely manner.
If the Danish tax authorities request the transfer pricing documentation from a taxpayer, and the taxpayer does not comply because it is unable to submit its transfer pricing documentation, penalties can be imposed (up to DKK 250,000 per income year or approximately U.S. $37,000) or a discretionary assessment can be made.
Read a March 2020 report prepared by the KPMG member firm in Denmark
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