On 3 December 2020, the Parliament adopted the draft Bill No. L 28, which proposes to implement the OECD’s recommendations on permanent establishment, so that the Danish rules are brought into line with the latest international standards. The adjustment involves, inter alia, to cross-border companies not artificially must be able to organize themselves so as to avoid the creation of a permanent establishment and thus taxation in the countries they operate in.
In order to bring Danish legislation in accordance with EU – the court also proposes that Danish companies be allowed to make deductions for final losses in foreign subsidiaries, permanent establishments and relating to real estate.
Finally, it is proposed that the Tax Administration be guaranteed access to estimate transfer increases when documentation is not available, and that transfer pricing documentation must be submitted no later than 60 days after the deadline for submitting the information form. Besides, if the TP documentation is not contemporaneous nor submitted within the 60-day deadline, the burden of proof will be reversed and the tax authorities will be entitled to assess a taxpayer on an estimated basis for transfer pricing purposes.
