The 2015 report (Danish) [PDF 362 KB], released 2 May 2016, reveals a steady high number of tax audits and taxable income adjustments—but one that is significantly lower than previous years’ results. For 2015, the total income adjustments amounted to DKK 5.9 billion (approximately € 0.79 billion). The SKAT report for 2015 reveals:
SKAT announced that for 2016 (as in 2015), its efforts would focus on transfer pricing cases involving: (1) goods and services; (2) intangibles; and (3) financial transactions. The selection process for an audit overall would be prioritized based on criteria of materiality and risk.
To allow for faster resolution of the tax audit process and thereby reduce uncertainty for taxpayers with transfer pricing issues, the Danish Ministry of Taxation announced a trial project allowing alternative dispute resolution (ADR) and mediation, in part following a practice of the UK tax authority. Mediation is an alternative way to deal with conflicts between the tax authority and taxpayers without the use of courts, by using a third party to assist the parties to reach a settlement of the conflict. In the pilot project, an internal mediator may be assigned to the case, on a request by the taxpayer.
Transfer pricing professionals in Denmark have observed that there had been a high number of audits and large amount of adjustments in the previous three years. The income adjustments in 2015 continue this trend, and the high number of cases and large amounts of adjustments may be viewed primarily to reflect continued political pressure for audits of Danish multinational companies and for enhanced revenue collection for the Danish government. Based on the historical trends and the political interest for transfer pricing in Denmark, combined with implementation of the OECD action plans on base erosion and profit shifting (BEPS), it does not seem that the current level of tax audits or adjustments would likely decline in the near future.
For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services group in Denmark, with the KPMG member firm in Denmark, KPMG Acor Tax:
Simon K. Schaadt | +45 5374 7044 | email@example.com
Martin Nielsen | +45 5374 7055 | firstname.lastname@example.org
Henrik Lund | +45 5374 7066 | email@example.com
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.