Denmark: New requirement for annual submission of transfer pricing documentation

Denmark: Submission of transfer pricing documentation

The Danish Parliament on 3 December 2020 passed a bill that requires taxpayers to submit annually the transfer pricing documentation package—both the Master file and Local file—to the Danish tax authority no later than 60 days after the tax return deadline.


The new legislation will be effective for income years beginning on or after 1 January 2021 with respect to the transfer pricing documentation.


The new legislation provides two substantial changes to the rules currently in effect:

  • The transfer pricing documentation must be submitted to the Danish tax authorities no later than 60 days after the deadline for filing of the tax return.
  • If a taxpayer fails to submit the required transfer pricing documentation by the deadline, the Danish tax authority may reassess the taxable income by means of a discretionary assessment.

The content requirements to the transfer pricing documentation continue to follow the OECD Transfer Pricing Guidelines.


The consequences of failing to submit a timely and otherwise compliant transfer pricing documentation package include a risk of penalties and a discretionary assessment.

In general, the starting point for such penalties is DKK 250,000 (approximately €33,330) per income year, per entity and a penalty of up to 10% of any increase in assessed income. In addition, the new transfer pricing legislation introduces the possibility of daily penalties until documentation is submitted.

KPMG observation

The purpose of Bill No. L28 is to provide that adequate transfer pricing documentation is available at the time of the tax return, and the risk of penalties and discretionary assessments are designed to provide incentives to that end. Therefore, taxpayers need to consider that there is timely completion of adequate documentation (that is, a fully compliant Master file and Local file) no later than as of the date when the tax return is filed.

Read a December 2020 report prepared by the KPMG Acor Tax, a KPMG member firm in Denmark

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