De danske regler omkring transfer pricingdokumentation

Maria Løvendal Andersen

Student thesis: Diploma thesis

Abstract

The purpose of this thesis has been to lay out the rules concerning the Danish transfer pricing documentation requirements. The taxpayers must prepare and keep written documentation of the prices and terms set for controlled transactions. This written documentation must be submitted at SKATs request and provide a suitable basis for assessing whether the transaction is conducted at arm's length. Concerning the content of the documentation, this requirement is fulfilled by pointing out the relationships corresponding to the parties mentioned in SKL 3 B, stk. 1 in the in-come tax return, and by attaching appendix 05.021. SKL § 3 B, stk. 5, says that the taxpayers must prepare and retain written documentation of how the prices and conditions are set for the controlled transactions. The requirements concerning the content of the documentation are complemented by BEK nr. 42 of 24.01.2006 and the tax authorities’ guideline for documentation. The scope of the documentation depends on the scope and complexity of the enterprise and the controlled transactions. The documentation is used to compare the controlled transactions to the marked set price or value. The documentation must contain the following (BEK nr. 42 §§ 4-8):  Information on the group and its commercial activities  Information on the controlled transactions  A comparability analysis  Information on implementation of the pricing principles  A list of any written agreements Small enterprises must only prepare transfer pricing documentation for special transactions. If the taxpayer fails to fulfil the information- and documentation requirements in SKL § 3 B sanctions may be issued, for instance in the form of fines. In case the tax payer fails to provide adequate documentation the tax authorities can make an estimated tax assessment Base erosion and profit shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profits ‘disappear’ for tax purposes or to shift profits to locations where there is little or no real activity but the taxes are low. On 19 July 2013 the OECD published an Action Plan on Base Erosion and Profit Shifting (“BEPS Action Plan”). Action 13 in the BEPS Action Plan states that the OECD will “develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE’s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries, according to a common template.” In connection with action 13, OECD published a White Paper and a Discussion Draft. These reports investigate the current state of affairs regarding transfer pricing documentation, and makes suggestions as to how transfer pricing documentation rules might be modified. Action 13 may result in changes in OECD Transfer Pricing Guidelines, which will be directly effective. However the question is if Denmark will be implementing the new guidelines in their domestic law and they probably will, since the Danish law is close connected to the OECD Transfer Pricing Guidelines. The impact will be in form of the master file, the local file and the country-by-country reporting. But the final conclusion is yet to come.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages207