Transfer Pricing rules in Denmark for 2026
Transfer Pricing rules in Denmark have changed many times over the last couple of years. It is mandatory for larger companies in Denmark to submit Transfer Pricing documentation each year. It was required to prepare the Transfer Pricing documentation in the past, but it was only submitted within 60 days upon request from the Danish Tax Agency. Transfer Pricing should now always be submitted 60 days after the Corporate Income Tax return deadline when exceeding certain thresholds.
Transfer Pricing rules in Denmark for 2026
This blog will outline the current Transfer Pricing rules in 2026 for Danish limited liability companies and majority shareholders, who are physical persons and tax residents of Denmark.
Transfer Pricing regulates the price for controlled transactions between a buyer and a seller controlled by the same owner or physical person.
The general rule is that all companies in Denmark should submit Transfer Pricing documentation each year.
However, smaller and medium-sized companies are often exempt from the requirement.
Since 1 January 2025, Denmark has implemented new regulations that exempt a broader range of companies from the mandatory submission of Transfer Pricing documentation. The Danish Ministry of Taxation estimates that at least 1.500 companies are exempted from the annual requirement to prepare and submit Transfer Pricing documentation as a result of these changes.
However, even companies that qualify for this exemption must still prepare internal documentation demonstrating how their arm’s length pricing was determined.
These newly exempt entities are not required to follow the OECD Transfer Pricing documentation format and do not need to submit a Local File or a Master File.
It is important to note the difference between being required to prepare Transfer Pricing documentation and being required to submit the Transfer Pricing documentation.
When you are only required to prepare the Transfer Pricing documentation, the formalities are more relaxed. Here you just need to be able to document that your pricing follows the arm’s length principle. There are no specific guidelines that need to be followed in this situation.
When you are required to submit the Transfer Pricing documentation, the formalities are much more strict, involving the drafting of a Master File and a Local File, which must include a benchmark. Here you need to observe OECD guidelines and local Danish rules.
Transfer Pricing documentation in Denmark should be submitted 60 days after the Corporate Income Tax return deadline.
It is worth noticing that it is not required to prepare Transfer Pricing documentation for controlled transactions between two Danish companies, or between a majority shareholder who is a tax resident of Denmark and a controlled Danish company.
Over the last couple of years, the Corporate Income Tax return for companies and the Personal Income Tax return for majority shareholders who are tax residents of Denmark have been extended to include a detailed questionnaire relating to controlled transactions.
Why is Transfer Pricing documentation relevant?
When discussing Transfer Pricing rules in Denmark for 2026, it is important to understand why the rules were put in place.
Traditionally, companies have used intercompany pricing to reduce their tax burden.
Companies would often charge a higher price to other controlled companies in high-tax countries (which reduced the profit in the high-taxed country) while charging a lower price for controlled companies in low-tax countries (which increased the profit in the low-taxed country).
The Danish Tax Agency has dramatically increased Transfer Pricing requirements for controlled transactions to combat this, and continues to increase its enforcement and audit activity on Transfer Pricing documentation, even as the documentation requirements themselves have been relaxed for smaller entities.
In A Hurry?
Transfer Pricing (also called “TP” in short) refers to intercompany pricing when providing, for example, products, services, loans, or similar between companies controlled by the same owner, or between a company and a majority shareholder who is a physical person.
A company or a majority shareholder has control over a company when owning more than 50% of the shares in the other company.
The fine in Denmark for not submitting Transfer Pricing documentation on time is 250.000 DKK per year per company, which can often be lowered to 125.000 DKK per year per company if Transfer Pricing documentation is later submitted.
Another consequence for not submitting Transfer Pricing documentation on time, in addition to the fine, is that the Danish Tax Agency can estimate the Transfer Pricing and not respect the pricing you have used for the controlled transactions.
A penalty of 10% of any increase in income due to changes in Transfer Pricing should be expected in addition to the fine.
The deadline to submit Transfer Pricing documentation is 60 days after the deadline for submitting the Corporate Income Tax return.
What is Transfer Pricing?
Transfer Pricing rules in Denmark follow a set of OECD guidelines which help determine the price a company should charge another controlled company for products, services, loans, or similar.
A company is controlled when another company or physical person owns more than 50% of the shares in the company.
A transaction between a parent company and an operating company is controlled.
A transaction between a majority shareholder and his/her company is also controlled.
Transfer Pricing allows a company to establish pricing for products and services (and other transactions) between the company and a majority shareholder or controlled subsidiaries.
Transfer Pricing is based on what price an uncontrolled transaction would be valued at.
Who should prepare Transfer Pricing documentation in Denmark?
All Danish companies that have controlled transactions with a controlled company or a majority shareholder should prepare Transfer Pricing documentation for the controlled transactions.
Also, a majority shareholder who is a physical person (and a tax resident of Denmark) who has controlled transactions with a company should prepare Transfer Pricing documentation for the controlled transactions.
Even though it is required to prepare Transfer Pricing documentation, it does not always need to be submitted to the Danish Tax Agency.
In the past, it was also required to prepare Transfer Pricing documentation for controlled transactions between two Danish companies, but this rule has been cancelled since 2021.
Who should submit Transfer Pricing documentation each year to the Danish Tax Agency?
In general, all companies registered for Corporate Income Tax in Denmark that have controlled transactions with other group entities need to submit Transfer Pricing documentation.
However, some companies will be exempt from the Transfer Pricing documentation requirements:
If the controlled companies have less than 250 employees.
AND
If the group of controlled companies has a balance sum less than 195 million DKK.
OR
If the group of controlled companies has a revenue less than 391 million DKK.
Note that this size-based exemption only applies to controlled transactions with entities in EU/EEA countries, or countries with which Denmark has a double taxation treaty. If your company has controlled transactions with entities outside the EU/EEA in a country without a double taxation treaty with Denmark, this exemption does not apply to those transactions, regardless of the size thresholds above.
If the company cannot use this exemption rule, the company must submit Transfer Pricing documentation at the latest 60 days after the Corporate Income Tax return deadline.
These thresholds are global and consolidated for the whole organisation, so not just for the local Danish company.
You should include the parent company and all subsidiaries controlled globally when determining if you exceed the thresholds.
If you are exempt, you do not need to prepare or submit the Transfer Pricing documentation, but you still need to prepare documentation for how your pricing was set.
The requirements here are much less extensive than the normal Transfer Pricing documentation.
Upon request from the Danish Tax Agency, you will have 60 days to submit the documentation in this case.
Please note that if your company has had controlled transactions with a company in a country that does not have a double taxation treaty with Denmark and is outside the EU, your company must always submit Transfer Pricing documentation regardless of the abovementioned exemption.
What should the Transfer Pricing documentation include?
The Transfer Pricing documentation should contain a Master file (which includes information about the whole organisation) and a Local file (which only provides information about the local entity).
Furthermore, it is essential to include an analysis called a “benchmark”.
A benchmark is a mandatory analysis which substantiates that the controlled transactions are carried out following the arm’s length principle.
Usually, the benchmark is made by comparing the simplest of all the entities involved in the controlled transactions with other comparable (non-controlled) companies, using an approach called the Transactional Net Margin Method (TNMM) and/or Comparable Uncontrolled Pricing (CUP) data.
How does a company submit Transfer Pricing documentation?
When a company submits the Corporate Income Tax return, it must declare information regarding controlled transactions in the fiscal year.
Depending on your situation, should you be required to submit the Transfer Pricing documentation, a new Transfer Pricing menu will appear on the left side of the Danish Tax Agency’s website after submitting the Corporate Income Tax return.
In this Transfer Pricing menu, you can upload your Master file and Local file together with relevant documents.
Controlled transactions with entities in countries without a double taxation treaty
If you have controlled transactions with entities in countries without a double taxation treaty with Denmark, located outside of the EU, you always need to submit Transfer Pricing documentation, even if you are below the thresholds mentioned before.
De minimis threshold
The rules from 2025 include a “de minimis threshold”.
Companies whose total controlled transactions in the year are less than 5 million DKK, and whose intra-group receivables and debt at year-end are less than 50 million DKK, may be exempt from the requirement to prepare full Transfer Pricing documentation (though exceptions apply, for certain intangible asset transactions covered by section 40 of the Danish Depreciation Act, or transactions with non-treaty jurisdictions outside the EU/EEA).
Controlled transactions that are explicitly exempt from Denmark’s documentation requirements are not included when calculating the 5 million DKK and 50 million DKK thresholds.
In addition to the volume-based exemptions, the rules also provide specific exemptions for certain equity-related transactions, such as cash dividend distributions, cash capital increases, and minor investments regarded as passive capital placements.
Implementation of Amount B
The OECD finalised its “Amount B” guidance in 2024. Denmark has not implemented Amount B as a general, mandatory framework for all distribution activities.
Instead, Denmark respects the political agreement and recognises the outcome of the Amount B guidance only for covered distribution activities carried out in a specific, limited list of around 23 “covered jurisdictions” that have themselves adopted Amount B, and only if that country also has a double taxation treaty with Denmark. Countries on this list include Mexico, Brazil, and Thailand.
Even within these covered jurisdictions, Amount B only applies to wholesale distribution of tangible goods carried out by low-risk distributors, and does not cover commodities, non-tangible transactions (such as royalties, services, or financing), distributors performing significant marketing or R&D functions, commissionaires, agents, or service providers.
So, for most Danish subsidiaries or importers trading with countries outside this specific list, Amount B does not currently change anything in how Transfer Pricing is determined.
Shall a majority shareholder, who is a physical person, submit Transfer Pricing documentation?
Transfer Pricing rules in Denmark are also relevant for majority shareholders.
If you are a majority shareholder and a tax resident of Denmark, and you have controlled transactions which exceed the thresholds mentioned before, or with a controlled company located in a country without a double taxation treaty with Denmark that is outside of the EU, then you also need to submit Transfer Pricing documentation for your controlled transactions as a separate Local file and a Master file.
In this case, you must mail the documentation to the Danish Tax Agency since you cannot upload Transfer Pricing documents on SKAT Borger.
Transactions between the majority shareholder (a tax resident of Denmark) and a Danish company do not require the majority shareholder to submit Transfer Pricing documentation.
Also, remember that you always need to declare controlled transactions on your tax return regardless of being required to submit the Transfer Pricing documentation or not.
How does the Danish Tax Agency check Transfer Pricing?
In general, the Danish Tax Agency uses a system called Orbis.
This system enables the Danish Tax Agency to search in a database of companies in Denmark and abroad.
Naturally, checking Transfer Pricing is a challenging and complex task.
But to give you an idea, here is a simplified description of how it is checked:
The most common approach is to select comparable companies, which are adjusted to match your company as much as possible.
Depending on the type of controlled transactions, the Danish Tax Agency will make a report from Orbis that shows how much revenue and profit these companies made in the fiscal year.
By dividing the profit by the revenue, you can see how much percent of the revenue ends as profit.
The Danish Tax Agency then checks if you made the same profit in your company.
This is called the “Transactional Net Margin Method”, or “TNMM” for short.
TNMM is the preferred method to benchmark Transfer Pricing when CUP data is unavailable (Comparable Uncontrolled Pricing).
Preparing compliant Transfer Pricing documentation and performing a benchmark analysis is a complex and specialised task, most often prepared by your accountant or auditor.
What cost should you expect for Transfer Pricing documents?
Transfer Pricing documents consist of the following:
1: Master file
2: Local file
In general, a Local file is the most costly one to prepare.
Larger audit firms typically charge 90.000-135.000 DKK + VAT for a Local file.
The Master file typically costs 60.000-85.000 DKK + VAT when done by a larger audit firm.
These are the typical prices we see for a smaller organisation.
The work needed for preparing Transfer Pricing documentation is extensive.
So always make sure to allocate sufficient resources to answer questions.
Can the deadline to submit Transfer Pricing documentation be extended?
Since income year 2025, if you apply for and receive an extended deadline for the Corporate Income Tax return, the deadline for submitting the Transfer Pricing documentation, including the Local file, is now automatically extended correspondingly. You no longer need to apply separately for an extension of the Local file deadline in this situation.
If the Master file is delayed, it is generally possible to submit the Master file from the previous year and inform the Danish Tax Agency when the Master file for the new year will be submitted, together with an overview of the most important changes since last year.
It is also possible to apply for an extension of the deadline to submit the Master file for up to 12 months.
So the extension options for the Master file remain more flexible than for the Local file, even though the Local file deadline now follows the tax return deadline automatically.
Controlled transactions between two Danish entities, which are both tax residents of Denmark
If the controlled transactions are between two Danish entities, both tax residents of Denmark, there is no requirement to prepare Transfer Pricing documentation for these transactions.
Country-by-Country-Reporting (“CbCR”)
International organisations with a consolidated revenue of more than 5,6 billion DKK (750 million EUR) will need to follow Country-by-Country-Reporting (“CbCR”) requirements following OECD guidelines.
The deadline to report CbCR in Denmark is generally 12 months after the end of the fiscal year.
You can read about Controlled Foreign Companies (CFC) here
(This blog is updated last time: 22.7.2026)
FAQ
What is Transfer Pricing?
Transfer Pricing involves setting prices for transactions between companies controlled by the same owner or between a company and its majority shareholder. It's governed by OECD guidelines to ensure prices match those of uncontrolled, market-based transactions.
Why have Transfer Pricing rules in Denmark changed?
To combat tax avoidance strategies where companies manipulate intercompany pricing to reduce overall tax burdens, Denmark has tightened Transfer Pricing documentation requirements.
Who must submit Transfer Pricing documentation annually in Denmark?
Larger companies exceeding specific thresholds must submit Transfer Pricing documentation yearly, 60 days after the Corporate Income Tax return deadline.
What are the key thresholds for submitting Transfer Pricing documentation?
Companies must submit Transfer Pricing documentation if they have 250 employees or more AND either a balance sheet total of 195 million DKK or more OR revenue of 391 million DKK or more.
What does Transfer Pricing documentation include?
It should contain a Master file about the entire organisation, a Local file about the local entity, and a benchmark analysis demonstrating adherence to the arm's length principle.
What are the consequences of not submitting Transfer Pricing documentation on time in Denmark?
There's a fine of 250.000 DKK per year per company, which may be reduced to 125.000 DKK, and the Danish Tax Agency may estimate Transfer Pricing and apply additional penalties.
Can the deadline for submitting Transfer Pricing documentation be extended?
Deadline extensions are possible under specific conditions, particularly for the Master file, which has more flexible extension options compared to the Local file.
What is the fine for not submitting Transfer Pricing documentation on time in Denmark?
The initial fine is 250.000 DKK per year per company, potentially reducible to 125.000 DKK.
How does the Danish Tax Agency verify Transfer Pricing compliance?
Through a database system called Orbis, comparing your company's profit margin with similar uncontrolled transactions using methods like TNMM.
What should you expect to pay for an auditor preparing Transfer Pricing documentation?
A Local file will typically cost between 90.000 DKK and 135.000 DKK + VAT, while a Master file typically will cost between 60.000 DKK and 85.000 DKK + VAT. But it naturally will depend on complexity, auditor and so on.