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November 29, 2021

Denmark adopts new rules relaxing transfer pricing documentation requirements for domestic controlled transactions and addressing application of benchmarking

On 25 November 2021, the Danish Parliament adopted bill No. L7 which to a large extent abolishes the requirement to include domestic controlled transactions in transfer pricing (TP) documentation.

The bill also specifies the requirement to apply appropriate benchmarking in the comparability analysis.

The bill will be effective for income years starting 1 January 2021 or later.

The Bill

Domestic controlled transactions

According to the bill, TP documentation is no longer required for transactions between Danish group entities subject to ordinary company taxation. The bill includes a comprehensive list of exceptions which essentially limits the application of the new bill to domestic controlled transactions in which there is no risk of tax speculation.


The bill includes an amendment which specifies the Danish requirements to support intercompany transactions by benchmarking. When documenting intercompany transactions for income years starting 1 January 2021 or later, a benchmark is required to support the transaction regardless of materiality.

If an appropriate benchmarking is not included in the comparability analysis there is a potential risk of being challenged with a reversed burden of proof and a potential risk of being fined.


For additional information with respect to this Alert, please contact the following:

EY Godkendt Revisionspartnerselskab, Copenhagen

EY Godkendt Revisionspartnerselskab, Aarhus