Denmark: Timely preparation of documentation not enough
A draft bill was announced in mid-September 2019 by the Danish Ministry of Taxation that would require the submission of transfer pricing documentation with taxpayers’ annual tax returns, for tax years beginning on or after 1 January 2020.
Under the provisions of the draft bill, if the transfer pricing documentation is not submitted by the relevant deadline, the tax authority would have the ability to determine taxable income – i.e., a “discretionary assessment” – as well as apply potential penalties.
Although the requirement for preparation of contemporaneous transfer pricing documentation was made clear in December 2017’s newly introduced legislative provision to this effect, the requirement under the draft bill to submit the documentation on a contemporaneous basis, makes the intentions of the tax authority to have timely prepared information very clear.
We expect other jurisdictions to introduce transfer pricing documentation submission requirements over time.