Recently, the Danish parliament adopted an important amendment of the Tax Control Act (L 13 Forslag til Skattekontrollov of October 4, 2017) that is in force from January 1, 2019 with regard to transfer pricing documentation.
The purpose of the Bill is to simplify and clarify the rules in the Tax Control Act, and to a large extent there is a continuation of the applicable law. In addition, the enforcement agents are clarified, the tax return concept is abolished and replaced by the concept information.
Deadline for preparing statutory transfer pricing documentation:
The newly amended Danish Tax Control Act 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.
Penalties:
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.
