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February 3, 2022
2022-0193

Danish Tax Administration publishes new guidance on submission deadline for Master Files covering income years as of 1 January 2021

The Danish Tax Administration recently strengthened the Danish transfer pricing rules by introducing a requirement to submit transfer pricing documentation (Master and Local files). The deadline for submission is 60 days after the due date for the filing of the annual corporate income tax return. For income years starting on 1 January 2021, the deadline will be 29 August 2022.

The introduction of the new rules however gave rise to questions in relation to the timing of the Master File, as foreign groups owning Danish subsidiaries in certain situations would not be able to finalize the Master File in time to meet the deadline.

On 31 January 2022, the Danish Tax Administration published new guidance to address this timing issue.

Based on the new guidance, the Master File for the previous income year may be submitted as a temporary document if certain cumulative requirements are met as follows:

  1. The temporary Master File submitted is less than a year old at the time of the submission deadline.
  2. It must be stated when the final Master File for the income year in question will be submitted.
  3. Significant changes affecting the Danish taxpayer for the income year in question, not already disclosed in the local file, must be briefly described.

In the abovementioned situation, the taxpayer will not have to request an extension of the submission deadline.

If the taxpayer is not able to submit a temporary Master File meeting the requirements above, an extension of the submission deadline must be requested with the Danish Tax Authorities. This is also the case if the Master File is not anticipated to be finalized less than a year after the temporary Master File was finalized.

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

EY Godkendt Revisionspartnerselskab, Copenhagen

 

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