Denmark: Simplified transfer pricing rules and reduced documentation burden
The new transfer pricing rules under the Act will apply for the income year 2025.
The Danish Parliament on June 3, 2025, passed legislation amending Sections 39 and 40 of the Danish Tax Control Act to ease transfer pricing compliance for Danish taxpayers.
The Act is expected to exempt at least 1,500 companies that submitted documentation for fiscal year 2022. The new transfer pricing rules will apply for the income year 2025.
New thresholds and exemptions
The introduction of thresholds would exempt taxpayers from documentation requirements if controlled transactions are below DKK 5 million and intra-group receivables and debts are below DKK 50 million. For those still subject to documentation requirements, the new law exempts certain controlled transactions, including:
- Dividends
- Capital contributions
- Minor passive investments
- Other insignificant transactions
Transactions under Section 40 of the Danish Depreciation Act and transactions with non-EU/EEA countries without a double taxation agreement with Denmark also remain subject to documentation.
The new rules raise the group thresholds for when limited documentation can be prepared. Specifically, the annual total balance threshold is increased from DKK 125 million to DKK 195 million and the turnover threshold is increased from DKK 250 million to DKK 391 million. The full-time equivalent (FTE) threshold of 250 remains unchanged.
The new rules also remove the Danish tax agency's authority to request auditor statements. Consequently, the Danish tax agency cannot make discretionary assessments or impose penalties for failing to submit an auditor statement.
Finally, the law includes an automatic deadline extension for submitting the transfer pricing documentation (the 60-day deadline) if an extension is granted for the corporate tax return. As a result, there will no longer be a need to apply separately for extensions of both the corporate tax return and the transfer pricing deadlines.
For more information, contact a KPMG tax professional in Denmark:
Simon Schaadt | simon.schaadt@kpmg.com
Michael Villinger | michael.villinger@kpmg.com
Anne-Mette Bergelius Hvii | anne-mette.hvii@kpmg.com