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13.4.4. APAs and Dispute Resolution Mechanisms

Advance Pricing Agreement

Although Denmark still has no formal APA process, requests for APAs are accepted and processed under the MAP clause of Danish tax treaties, and the country has developed a long-standing APA practice. The first APA was concluded in 2002 and Denmark is one of the few countries to date to conclude an APA with China.

In a form of unilateral APAs, The Danish Tax Assessment Committee issues binding rulings on the tax treatment of specific sets of facts and circumstances. The Committee ordinarily issues its binding ruling within 3 months, unless the case is complex or the information submitted by the taxpayer is incomplete. It is not common for the SKAT to process unilateral APAs. However, taxpayers have the possibility of applying for a binding ruling concerning the tax treatment of a given transaction. Binding rulings will be provided by the Danish Tax Assessment Committee, and the response will typically be provided within three months.

Dispute Resolution Mechanisms

Danish tax treaties ordinarily contain a Mutual agreement Procedure clause, allowing the competent authorities of the Contracting States to consult with each other towards resolving cases of (double) taxation not in line with the Convention.

Furthermore, Denmark is signatory to the EU Arbitration Convention which contains (arbitral) dispute resolution mechanisms between the contracting parties.