The Danish tax rules require that affiliated companies transact with each other on the same terms and conditions that they apply to unrelated parties. This is known as the “arm’s-length principle”. In order to comply with this requirement, it is therefore necessary to have established internal rules for settlements etc. - transfer pricing - between the companies.
Just as in many other countries, there are rules in Denmark which require enterprises to furnish information about intragroup transactions to the tax authorities. In many cases they must also produce written documentation that such transactions are carried out in accordance with the arm’s-length principle.
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