On 12 July 2019 the Danish Tax Agency issued a new decree (SKM2019.374.SKTtST) regarding transfer pricing documentation in response to the Supreme Court’s decision in the Microsoft case. The decree allows some taxpayers to reopen Denmark transfer pricing cases related to income years from 2008 and onwards where the tax administration made discretionary assessments. Taxpayers have six months to apply to have their cases reviewed.
On 31 January 2019, the Danish Supreme Court ruled in favor of Microsoft Denmark ApS as the Supreme Court disregarded the tax agency’s point of view and ruled and the tax agency could only make discretionary assessments in cases where the taxpayer had not filed complete transfer pricing documentation at the time of the assessment, meaning the time of tax agency’s decision.
Based on the Supreme Court ruling, the tax agency issued a decree on 12 July 2019 allowing a reopening of tax assessments in cases where the tax agency had made a discretionary assessment solely with reference to incomplete transfer pricing documentation for the individual income years at the time of filing the tax return. Companies which transfer pricing documentation was available and complete at the time of the tax agency’s decision, but not at the time of filing the tax return, can have their tax cases reopened. At present it is possible to apply for reopening of the tax agency’s assessments for income years from 2008 and onward. The deadline for applying for the tax agency to reopen the cases is 12 January 2020 and the deadline for income year 2008 is 20 November 2019.
