The Danish Ministry of Taxation has announced draft bill L 28, which strengthens the Tax Administration in the fight against international tax evasion and aggressive tax planning. The first reading of the draft bill was completed in parliament on 30 October 2020.
One of the main measures of the draft bill provides for a new definition of permanent establishment based on OECD recommendations so that the Danish rules are brought in line with international standards. The draft bill also includes measures to allow Danish companies to take deductions for final (definitive) losses of foreign subsidiaries and permanent establishments and in relation to real estate, which is required to comply with EU law. And lastly, measures are included to ensure that the Tax Administration may make adjustments based on estimated assessment when transfer pricing documentation is not available and that transfer pricing documentation must be submitted no later than 60 days after the deadline for submitting the information form.
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