Denmark: local rules

The arm's length rule is in section 2 of the Ligningslov (LL § 2). It covers taxpayers that are controlled by, control, or are in the same group as another person, and taxpayers with a foreign permanent establishment. It also lets a taxpayer avoid secondary adjustments by committing to payment on arm's length terms if the other country taxes the same way (LL § 2(5)). A simplified approach for baseline distribution (OECD Chapter IV annex) applies to listed countries (LL § 2 B, from income year 2025). Documentation and reporting duties are in the Skattekontrolloven (SKL) §§ 37-52 and the TP documentation order (BEK 883 of 24 June 2025). The tax agency applies the OECD Transfer Pricing Guidelines, in their latest version, when it reads LL § 2.

Every taxpayer with controlled transactions must report them in the tax return (oplysningsskema, SKL § 38). A taxpayer with cross-border controlled transactions must also prepare and file a master file (fællesdokumentation) and a country-specific file (landespecifik dokumentation), and file them no later than 60 days after the tax return deadline (SKL § 39(3)). For a December year end that is 29 August of the next year (60 days after 30 June). From income year 2025, an extension of the tax return also extends the documentation deadline. No documentation is needed if total controlled transactions (excluding receivables and debt) in the year are under DKK 5m and controlled receivables and debt at year end are under DKK 50m (SKL § 39(2)), with exceptions for intangibles and for counterparties in non-EU/EEA countries without an information exchange agreement. Small groups (under 250 employees and either balance sheet under DKK 195m or turnover under DKK 391m) only document transactions with counterparties in non-EU/EEA countries that have no tax treaty with Denmark (SKL § 40). Documentation can be in Danish, Norwegian, Swedish or English. On audit, the agency can ask for more material and for database searches (60 to 90 days).

The order requires the most appropriate method to be named and explained for each category of transactions, with the tested party, comparables and any adjustments (BEK 883 § 5). The methods in the OECD Guidelines are accepted. The Danish courts have said that profits outside the interquartile range are not enough by themselves to prove a non-arm's-length price (Supreme Court, SKM2025.295.HR).

Late or missing documentation can lead to a fine under SKL § 84(1) no. 5 if the failure is intentional or grossly negligent. Under the tax agency's practice (Juridisk Vejledning) the base fine is DKK 250,000, cut to half if proper documentation is prepared later, plus 10% of any income increase. The agency can also impose daily coercive fines (SKL § 72) and make a discretionary assessment of the controlled transactions (SKL § 46). Filing the tax return late, including the controlled transactions information, carries a surcharge of DKK 400 a day, up to DKK 10,000 (SKL § 73, rates raised by Act 16 of 14 January 2025). A late CbC report or CbC notification can be fined (SKL § 84(1) no. 5). The DKK 250,000 base fine comes from the Juridisk Vejledning, not from the statute text.

The Minimumsbeskatningsloven (Act 1535 of 12 December 2023, consolidated as LBK 1089 of 2 September 2025) applies the IIR and the QDMTT to financial years starting on or after 31 December 2023, and the UTPR to financial years starting on or after 31 December 2024 (earlier if the parent is in an EU state that used the Article 50 delay). It covers groups with revenue of at least EUR 750m in two of the four prior years. Each Danish group entity must notify the tax agency within 6 months after the reporting year (MBL § 55), and file the standard GIR form 15 months after the reporting year, or 18 months for the first (transition) year, never before 30 June 2026 (MBL § 53(4)). The top-up tax is due 2 months after the GIR deadline (17 or 20 months after year end, never before 30 August 2026). There is no separate top-up tax return. If the GIR is filed in another country under an exchange agreement, the Danish entity only gives a notice of who files it.

The tax return (oplysningsskema) for companies is due 6 months after the year end, so 30 June for a December year end (SKL § 12). SKL § 13 lets a taxpayer file on time by 9.00 on the next working day if the deadline falls on a weekend or public holiday, or on the day before one. This is the legal basis for rollWeekends, and it covers only the tax return (and the controlled transactions answers in it). Documentation, CbC and Pillar Two dates do not move. The tax agency can extend the return deadline on request if there are special circumstances (SKL § 14(1)). The CbC report is due 12 months after the year end for Danish ultimate parents of groups with revenue of at least DKK 5.6bn (SKL § 48). Danish statutes, orders and similar official texts are free of copyright (ophavsretsloven § 9(1)).