New legislation regarding Danish transfer pricing-documentation was passed on June 3, 2025, and will apply for income year 2025 and onwards. The changes revise the thresholds that determine which entities are required to submit transfer pricing documentation in Denmark. These changes include the introduction of new thresholds for revenue and balance sheet total, as well as a submission exemption based on a minimum threshold for controlled transactions.
Danish companies that are part of a multinational enterprise are subject to submitting mandatory transfer pricing documentation if the multinational enterprise exceeds either of the following applicable thresholds.
The new thresholds, measured on a consolidated level, are as follows:
Furthermore, the obligation to comply with the arm’s length principle applies to all controlled transactions regardless of whether the company is required to submit transfer pricing documentation. As such, for the out-of-scope companies necessary transfer pricing documentation must be prepared and submitted upon specific request from the tax authorities.
The new legislation includes an exemption from the mandatory submission of transfer pricing documentation for Danish entities -- regardless of whether they exceed the above threshold -- if the total sum of controlled transactions is below DKK 5 million, and the controlled receivables and debt at the end of the income year amount to less than DKK 50 million.
The following transactions are excluded from the minimum threshold and need not be documented:
Thresholds for Mandatory Submission of Documentation
Danish companies that are part of a multinational enterprise are subject to submitting mandatory transfer pricing documentation if the multinational enterprise exceeds either of the following applicable thresholds.The new thresholds, measured on a consolidated level, are as follows:
- Employees: 250 FTEs (unchanged)
- Revenue and Balance sheet:
- Revenue: DKK 391 million (previously DKK 250 million)
- Balance sheet: DKK 195 million (previously DKK 125 million)
Furthermore, the obligation to comply with the arm’s length principle applies to all controlled transactions regardless of whether the company is required to submit transfer pricing documentation. As such, for the out-of-scope companies necessary transfer pricing documentation must be prepared and submitted upon specific request from the tax authorities.
Exemption From Submission Requirement
The new legislation includes an exemption from the mandatory submission of transfer pricing documentation for Danish entities -- regardless of whether they exceed the above threshold -- if the total sum of controlled transactions is below DKK 5 million, and the controlled receivables and debt at the end of the income year amount to less than DKK 50 million.The following transactions are excluded from the minimum threshold and need not be documented:
- Dividends or capital contributions paid in cash
- Controlled transactions that are insignificant in scope and frequency
- Controlled transactions between Danish entities (certain domestic transactions)
- Controlled transactions related to intangible assets/IP, including royalty payments
- Controlled transactions with countries with which Denmark does not have an information exchange agreement.
Example of Calculation of Thresholds for Exemption
The example below illustrates how the thresholds for controlled transactions and controlled receivables and debt, respectively at DKK 5 million and DKK 50 million, are calculated, as well as how specific types of transactions are treated in this context.DK company X |
Controlled transaction DKK ‘000 | Comment |
Transactions threshold DKK ‘000 | Receivables and debt threshold DKK ‘000 |
| T1: Group services from HQ in Denmark | 350 | Cross border – Included in the threshold | 350 | 0 |
| T2: Sale of finished goods to affiliated entities in Sweden | 2,000 | Cross border – Included in the threshold | 2,000 | 0 |
| T3: Purchase of finished goods of affiliated entities in Denmark | 2,000 |
Domestic Danish trans- action – Not subject to documentation and not included in the thresh- old |
0 |
0 |
| T4: Sale of finished goods to affiliated entities in Norway | 1,000 |
Cross border – Included in the threshold | 1,000 |
0 |
| T5: Sale of finished goods to affiliated entities in Hong Kong | 1,000 |
Cross border – Included in threshold because Denmark has an information exchange agreement with Hong Kong | 1,000 |
0 |
| T6: One-time sale of furniture to affiliated entities in Denmark | 200 |
Insignificant in scope and frequency – Not included in the threshold |
0 |
0 |
| T7: Royalty payment to HQ in Denmark | 200 |
Cross border – Not included in threshold BUT must always be documented | 0 |
0 |
T8: Sale of finished goods to AE in Iran |
750 |
Cross border – Not included in threshold BUT remains subject to documentation requirements | 0 |
0 |
| T9: Cash dividend payment to HQ in Denmark | 4,000 |
Dividend is not included in the threshold | 0 |
0 |
T10: I/C debt at year-end |
10,000 |
Cross border – Included in the threshold | 0 |
10,000 |
| T11: Interest payment to HQ in Denmark | 500 |
Cross border – Included in the threshold | 500 |
0 |
| Total controlled transactions | 22,000 |
Controlled transactions included in threshold | 4,850 |
10,000 |
Danish company X must submit a master file and a local file, including a transfer pricing analysis of T7 and T8, to the Danish Tax Agency.
Peter Rønhof Sloth
BDO in Denmark