Redegørelse for bevisbyrden i Transfer Pricing sager

Rasmus Madsen

Student thesis: Diploma thesis


Transfer Pricing is an interesting topic and constantly on the news with focus from the media, Danish politicians, experts within the area etc. The purpose with this thesis is to process and discuss the laws which regulate Transfer Pricing in Denmark, process and discuss the whole proof-burden issue. However, to understand the main objectives of this thesis and Transfer Pricing in general, we need a proper introduction to Transfer Pricing, the laws which regulate according to the arm’s length principle and the other two ground elements, documentation and information requirements as the law applies. During the process of this thesis is has come to my attention that the Danish Tax authority (SKAT) has focus on Transfer Pricing and has been for several years now. The numbers of completed Transfer Pricing cases have risen from 32 in 2009 and 77 in 2013, an increase of 240 %. This is therefore a very interesting and hot topic and the moment for companies, but also for the Danish Tax Authorities. The OECD Transfer Pricing Guidelines for Multination Enterprises and Tax Administrations are the international set of guidelines, on which the Danish Law within Transfer Pricing is based. Therefore, it is essential to understand these guidelines and during the process of this summary, the Danish legislation will be compared, where relevant, to the OECD Guidelines. The Danish Tax Authority regulates by Danish Law and the Danish Law regulating Transfer Pricing starts at; LL, article 21 and is a quite thorough description of who is covered by the legislation to be taxed in Denmark and a description of the arms’ length principle is also included in this article 2 mentioned above. Regarding the informational requirements and the documentation requirements, these are described in; Danish Tax Control Act, article 3B2 and in addition to this article, some more thorough guides have been prepared, and are to be found for each section, Documentation, Information and Valuation3. In relation to Transfer Pricing in Denmark it is essential to investigate when it can be expected, that the Danish Tax Authorities is entitled to perform a correction of a company’s Tax Income. It will without doubt be more difficult to perform a correction of a transaction that has occurred between two completely independent parties compared to companies within the same segment of industry. Furthermore a description and discussion of the Danish Law according to the burden of proof, where it is according to Danish Law, the Tax Authorities that lies with the proof burden. However the company has the obligation to prepare such information for the Tax Authorities and forward, upon request. So fort the company has not prepared any documentation, the Danish Tax Authorities has an opinion that the arm’s length principle has not been applied or the prepared documentation is evaluated and not found adequate, an evaluation of relevant transactions is made and how they would be valuated so fort the transactions happened between two independent parties. According to Danish Legislation, the taxpaying company cannot carry the burden of proof even though the documentation not has been prepared – then however the risk of Income Fixation occurs and if the company wishes to bypass the Income Fixation concluded by Tax Authorities the company now carries the burden of proof, which often can turn out to be difficult.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2014
Number of pages69