On 7 December 2017, the Danish parliament adopted a new Tax Control Act (skattekontrolloven) as well as a new Reporting Act (skatteindberetningsloven) as part of the implementation of Legal Rights Package III (retssikkerhedspakke III). The purpose of the Legal Rights Package III is to improve legal rights in the tax area and to restore confidence in the Danish tax authorities, SKAT.
The acts will enter into force on 1 January 2019 and have been adopted to modernise the existing Tax Control Act which will be replaced by the new Tax Control Act. Accordingly, the adopted acts constitute a complete revision of the current Tax Control Act, although they may certainly be considered a continuation of the existing legislation.
Transfer pricing perspectives
The adoption of the new Tax Control act entails a replacement of s. 3B of the existing Tax Control Act regulating the taxpayers’ transfer pricing reporting and documentation obligations by ss 37 to 52 of the new Tax Control Act. The rules are generally unchanged.
However, of particular interest is s. 39(3) of the new Tax Control Act which states that the written transfer pricing documentation must be prepared on a continuous basis and be completed no later than at the deadline for submission of information regarding transfer pricing transactions. This amendment is in line with the view presented by the Danish tax authorities in various cases.
Authored by Anders Havelund