Allokering af omkostninger i relation til koncerninterne tjenesteydelser i et transfer pricing perspektiv

Anne-Mette Hvii Parsbæk & Lene Sørensen

Student thesis: Master thesis


The focus on transfer pricing has been increasing over the last 10 years and is still subject of attention from legislators, authorities and companies. It is estimated that intercompany transactions accounts for 2/3 of the world trade, as a result the authorities try to prevent the companies from speculating in moving income to low tax countries. Many countries have tightened their legislation and increased the control made by the tax authorities. In Denmark intra-group services are the most reviewed type of transactions, and they are therefore the primary subject for this paper. The scope of our thesis is to determine how to remunerate intra-group services in accordance with the arm’s length principle to avoid adjustments by the Danish tax authorities. This analysis will address a number of issues to determine the arm’s length remuneration of intra-group services and legal position. OECD is a major player in finding solutions to the transfer pricing issues. Their Transfer Pricing Guidelines is based on article 9 in the Model Tax Convention, which states the arm’s length principle in intercompany transactions. The guidelines provide guidance to authorities and companies on how to solve transfer pricing issues, and on determining the arm’s length remuneration. Even though the Transfer Pricing Guidelines are not legally binding, the principles are still broadly accepted by the tax authorities and courts. Most of the Danish tax convention are based on the Model Tax Convention and includes the arm’s length principle from article 9. One of the main issues of the thesis is to determine when an intra-group service actually has been provided, since some centralised functions are similar to the services, but not deductable as the intra-group services are. When it is determined, whether an intra-group services have been provided, the issue of how to allocate the cost for the services to the business units occurs, since not all of the cost can be allocated directly. Furthermore, this thesis addresses the economic reasons why companies allocate indirect cost among the business units. Based on the above issues, our thesis provides a method for determining how to treat the intragroup services to reduce the risk of adjustments by the tax authorities. Our thesis also includes an analysis of the future initiatives on the transfer pricing area, both nationally and internationally.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2011
Number of pages124