The Danish Tax Administration has published updated guidance on transfer pricing documentation, which is dated 31 January 2022. This includes two key updates.
The first update concerns the changes introduced by Law no. 2194 of 30 November 2021, including that controlled transactions between Danish companies are generally exempt from the documentation requirements unless one party is subject to different taxation, such as the special tax rules under the Tonnage Tax Act or the Hydrocarbon Tax Act. This applies for income years beginning on or after 1 January 2021
The Second update concerns the new requirement to submit transfer pricing documentation within 60 days after the deadline for submitting the information form (tax return) unless an extension is granted, which also applies for income years beginning on or after 1 January 2021. In regard to the master file (joint documentation) requirement, it is provided that if the master file for the relevant year is not yet ready by the deadline for submission, the master file for the prior income year can be submitted as a preliminary master file as long as it is less than one year old. Further, the taxpayer must state when the master file for the relevant year will be submitted and also briefly describe any significant changes concerning the taxpayers that are not covered in the local file (country-specific documentation). If a master file less than a year old is not available, an extension of the deadline must be requested. An extension must also be requested if the taxpayer will not be able to submit the master file for the relevant year before the preliminary master file becomes one year old. It is also noted that in any case, an extension of the deadline may be requested.