Recently, the Danish Ministry of Finance introduced an obligation to file a transfer pricing documentation (TPD) with the Danish Tax Authorities on an annual basis. For the financial years beginning on or after 1 January 2021, the new law requires TPD to be submitted annually. The deadline for filing the compliant documentation is 60 days after the due date for filing the annual corporate income tax return. Therefore, the deadline for transfer pricing documentation submission for the financial year ended 31 December 2021 is 29 August 2022. Failure to submit by the applicable deadline will likely result in automatic fines.
The TP documentation requirement applies to all Danish companies if they meet one of the following conditions:
• Have more than 250 employees; and
• Have assets of more than DKK 125 million and a turnover of more than DKK 250 million.
In addition, the penalty for non-compliance is DKK250,000 per legal entity, per year. It is anticipated that this penalty will be imposed automatically on the entities that do not meet the deadline for the pro-active submission of the TPD. Moreover, a penalty of 10% may be imposed on a potential income adjustment.
