Transfer pricing relates to the pricing of controlled transactions. This means the transfer of goods, services, etc. between affiliated companies and between companies and main shareholders or permanent establishments.

When the taxable income is calculated, this pricing of controlled transactions should be made according to the arm’s length principle. This means that prices and terms must be set in line with what could be concluded between independent parties (the arm’s length principle), see section 2 of the Danish Tax Assessment Act (Ligningsloven).

Companies and individuals subject to sections 38 and 40 of the Danish Tax Control Act (Skattekontrolloven) must prepare and keep written documentation for the pricing of controlled transactions, see sections 38 and 40 of the Tax Control Act.

  • The arm’s length principle is defined in section 2 of the Danish Tax Assessment Act. Based on this, group companies must apply prices and terms to controlled transactions that could have been achieved between independent parties. Section 2 of the Tax Assessment Act also includes the rules on payment correction.
  • The rules on the duty to declare information about the controlled transactions and the duty to provide documentation are stipulated in Danish in part 4 of the Tax Control Act.
  • Companies comply with the duty to declare information about the controlled transactions by entering information about controlled transactions in E-tax for companies (TastSelv Selskabsskat). Individuals comply by submitting form 05.022, Controlled transactions - Appendix to the income tax return).
  • The rules on the duty to provide documentation are described in detail (Danish only) in Danish Executive Order no. 1297 of 31 October 2018  and in section section C.D.11 of our legal guide.
  • As Denmark has signed the international agreement on automatic exchange of Country-by-Country Reports (CbC Reports), Danish businesses that are either the ultimate parent company or the surrogate parent entity of a group subject to CbC reporting should submit a CbC report to the Danish Tax Agency (Skattestyrelsen). Denmark has been a part of this agreement since 2016. Read more about CbC reporting and notifications.
  • The rules on terminating double taxation in the EU are stipulated in Danish Executive Order no. 685 of 2 July 2019 on the EU Arbitration Convention and the EU Directive on Dispute Resolution (competent authority), SKM2005.2.TSS on the EU Arbitration Convention and the associated code of conduct, SKM2005.106TSS on Danish extension of the application of the EU Arbitration Convention on cases about thin capitalisation, SKM2006.40.SKAT on pointing out experts for the Advisory Committee mentioned in the EU Arbitration Convention and section 55 of the Danish Tax Administration Act (Skatteforvaltningsloven) on refund of expenses in appeals related to the termination of double taxation as a result of a transfer pricing regulation (the EU Arbitration Convention).
  • The general rules on the elimination of double taxation according to double taxation conventions are described in Danish in section C.F.8.2.2.25. Click here for an English translation.
  • The specific rules on the elimination of double taxation in relation to transfer pricing issues are described in Danish in section C.D.11.15 of our legal guide. Click here for an English translation.
  • Section 84 of the Danish Tax Control Act includes the rules on fines due to non-compliance with section 3 B of the Danish Tax Control Act as a result of an intended act or gross negligence.
  • The rules on submission of an auditor's statement about transfer pricing documentation are stated in section 43 of the Danish Tax Control Act  as amended by section 8 of Act no. 591 of 18 June 2012.
  • Sections 26 and 27 of the Danish Tax Administration Act include rules on extension of the time limits of the Danish Tax Agency in relation to assessing the taxable incomes in transfer pricing cases and extended access to reopening tax assessments in transfer pricing cases.
  • Section 54 of the Danish Tax Administration Act stipulates that refund of expenses for documentation according to section 3 B (now section 40) of the Danish Tax Control Act is not granted in appeals.  
  • Section 13 of the Danish Tonnage Tax Act (Tonnageskatteloven) (section 2 of the Danish Tax Withholding Act and part 4 of the Danish Tax Control Act also apply to taxpayers subject to Consolidation Act on Taxation of Shipping Businesses (tonnage taxation)).
  • Please see our website for published decisions on transfer pricing in Danish from the National Tax Tribunal and the courts.

If you want to read guidelines in full in Danish, please click the relevant guideline and then click ‘Vis udskrift’ (Show print).

If you would like to see previous - and outdated - versions of the guideline in Danish, please click the guideline and then ‘Andre versioner af vejledningen’ (Other versions of this guideline) 

Information about controlled transactions must be submitted digitally

Companies may observe their duty to disclose controlled transactions by submitting the information about such controlled transactions in E-tax Corporation Tax (TastSelv Selskabsskat). Natural persons and companies subject to hydrocarbon tax should submit form 05.022 Controlled transactions - Appendix to the income tax return.

Form 05.022 contains information about the nature and extent of the group’s controlled transactions. 

Please see our legal guide (in Danish) for further legal information.