The Parliament approved Bill L 194A on 3 June 2025.
Denmark’s parliament has approved Bill L 194A, amending the Minimum Taxation Act, Corporate Tax Act, and other laws on 3 June 2025.
Minimum Taxation Act and Corporate Tax Act
The legislation facilitates the adoption of the OECD Pillar Two administrative guidelines, set to be released in June 2024 and January 2025, under the framework of the Minimum Taxation Act.
Recent amendments to the Minimum Taxation Act and Corporate Tax Act regarding international joint taxation aim to prevent unintended tax outcomes and ensure seamless integration between the two frameworks.
The Danish Tax Agency has introduced new corporate income tax reporting requirements for 2024, aligning with the EU’s Pillar Two directive. This enforces a 15% global minimum tax on multinational groups with over EUR 750 million annual revenues. Under the new rules, all entities must answer two extra questions on their 2024 tax return, due on 30 June 2025. The questions are whether the entity is part of a group with revenue over EUR 750 million and if it is subject to the Minimum Taxation Act.
Earlier, Denmark published Law No.1535 on 13 December 2023, enacting EU Council Directive 2022/2523 into domestic law to establish a global minimum tax for multinational and large domestic groups in the EU.
The Pillar Two minimum tax applies retroactively to fiscal years starting on or after 31 December 2023.
Implementation of Amount B
The Bill L 194A introduces new rules to address the February 2024 OECD ‘Amount B Report’ on simplifying arm’s length pricing for certain distribution transactions, particularly in low-capacity countries.
The general arm’s length principle can be adjusted when a Danish company has controlled transactions with a qualified distributor in countries with a double taxation treaty with Denmark and opts for the simplified approach.
This is available for the following countries: Argentina, Armenia, Azerbaijan, Brazil, Egypt, the Philippines, Georgia, Jamaica, Kenya, Malaysia, Morocco, Mexico, Montenegro, North Macedonia, Pakistan, Serbia, Sri Lanka, South Africa, Thailand, Tunisia, Ukraine, Vietnam, and Zambia.
The application of Amount B is contingent upon the relevant jurisdictions adopting this approach. Amount B applies only to the wholesale distribution of tangible goods and excludes commodities.
Amount B changes apply from fiscal years starting on 1 January 2025.
EU tax haven blacklist: Antigua and Barbuda removed
To reflect the latest update to the EU’s tax haven blacklist, an amendment is proposed to the list of countries subject to defensive measures, including the removal of Antigua and Barbuda. The measures take effect on 1 July 2025.
Simplified transfer pricing rules
The Danish Parliament has also amended Sections 39 and 40 of the Danish Tax Control Act to simplify transfer pricing compliance for taxpayers. A draft bill from 9 April 2025 proposes further changes, including higher documentation thresholds and new exemptions. Starting with the 2025 income year, the revised rules are expected to exempt at least 1,500 companies that submitted documentation in 2022.
