Denmark Tax Agency Clarifies Dividend Tax Liability, Transfer Pricing Documentation Requirements for Specific Controlled Transactions

The Danish Customs and Tax Administration July 5 posted online Eastern High Court Decision No. SKM2023.316.ØLR, clarifying transfer pricing documentation requirements for controlled transactions. A Danish company entered into a risk hedging agreement with its foreign permanent establishment (PE), but failed to provide sufficient transfer pricing documentation to the tax authority. The tax authority found that the transfers constituted taxable dividends and held the company liable for withholding taxes. On appeal, the Eastern High Court upheld the decision, and found that: 1) substantially deficient transfer pricing documentation that fails to meet the requirements for controlled transactions must be equated with ...