Tax – Transfer Pricing Update

Do not forget to submit the transfer pricing documentation no later than September 6, 2022.

Many AmCham member firms liable to pay tax in Denmark are subject to transfer pricing documentation requirements. For income years beginning on or after January 1, 2021, the written documentation (both Master-file and Local file) must be submitted digitally. It has consequences if the deadline of September 6, 2022 is exceeded.

How: After you stated in the ‘Controlled transactions’ section of the company’s tax return in “TastSelv Selskabsskat (DIAS)” that the company is subject to the documentation obligation, you will have access to the relevant transfer pricing module in DIAS.

Help: This is the first year taxpayers have to submit the transfer pricing documentation via DIAS. If problems arise, you may contact the Tax Agency either by email to kontrolleredetransaktioner@sktst.dk or by telephone 723 76424 (hotline).

You can find guidance about the submission process and the transfer pricing rules in general on the Tax Agencys website in English language here: https://skat.dk/data.aspx?oid=2244410

Background
For income years beginning on or after January 1, 2021, parties liable to pay tax that are subject to the transfer pricing documentation obligation must submit their written documentation to the Tax Agency within 60 days of the filing deadline for the tax return. For the income year 2021 this dead-line has been extended a few days, i.e. the documentation must be submitted by September 6, 2022.

If the party liable to pay tax in Denmark has not prepared and submitted adequate transfer pricing documentation in due time a fine may be imposed and the Tax Agency may determine the taxable income relating to the controlled transactions on a discretionary basis.