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Advance pricing agreements

Availability and eligibility

Are advance pricing agreements with the tax authorities in your jurisdiction possible? If so, what form do they typically take (eg, unilateral, bilateral or multilateral) and what enterprises and transactions can they cover?

Unilateral (ie, binding rulings issued by the tax authorities), bilateral and multilateral advance pricing agreements (APAs) are possible.

In principle, an APA may cover all types of future controlled transaction between related parties.

Rules and procedures

What rules and procedures apply to advance pricing agreements?

As the Danish tax authorities have no specific application procedure for obtaining an APA, the process is relatively flexible. That said, an application will likely include the following steps:

  • informal contact with the Danish tax authorities;
  • pre-filing meeting;
  • formal application;
  • tax authorities' assessment;
  • negotiations with foreign tax authorities; and
  • formal agreement between the Danish and foreign tax authorities.

Timeframes

How long does it typically take to conclude an advance pricing agreement?

Two to three years. Additions to an existing APA can be made much sooner.

What is the typical duration of an advance pricing agreement?

An APA is usually valid for five years and, in certain cases, may have retrospective effect for previous tax years (roll-back).

Fees

What fees apply to requests for advance pricing agreements?

No fees apply when filing for an APA with the Danish tax authorities.

Special considerations

Are there any special considerations or issues specific to your jurisdiction that parties should bear in mind when seeking to conclude an advance pricing agreement (including any particular advantages and disadvantages)?

N/A.

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