On 23 June 2021, the Ministry of Finance submitted a draft bill for consultation. The bill proposed an amendment to the Danish Tax Control Act in order to relax the documentation requirements for transfer pricing for purely Danish transactions. It is expected that this legislative change will significantly reduce the compliance burden for a number of Danish-based companies.
The draft bill follows the recently adopted Danish legislation regarding mandatory submission of TP documentation for income years starting 1 January 2021. According to the new legislation, the TP documentation must be submitted to the Danish tax authorities no later than 60 days after the deadline for filing the annual corporate income tax return.
The purpose of the draft bill is to reduce unnecessary administrative burdens on Danish taxpayers. The draft bill is intended to ensure that the TP documentation requirements do not go beyond what is necessary to minimize tax speculations and prevent tax avoidance.
The amendment is proposed to have effect for the income year 2021, which begins on 1 January 2021 or later.
