In September 2017 SKAT published its report on transfer pricing regulations for 2016. The report contains, inter alia, key figures for regulations undertaken by SKAT with regard to transfer pricing throughout the year. Particular interest should be attached to the fact that, in 2016, the total transfer pricing reductions carried out by SKAT are higher than in any previous year.
SKAT’s 2016 report on transfer pricing Since 2006, SKAT has submitted a yearly report on transfer pricing to the Danish Parliament and 2016 is no exception. The 2016 report confirms the increasing trend in transfer pricing activities over the past decade. Thus, the number of transfer pricing increases is at its highest ever, and, likewise, the amounts involved are higher than they were in 2015.
The situation is unprecedented, however, as the 2016 reductions exceed total increases. SKAT has reduced the taxable income of Danish companies by a total of DKK 11.5bn compared with an increase totalling DKK 7.3bn. According to SKAT, the large reductions are a result of the correspondingly high increases made in the years 2012-2014, when SKAT increased the taxable income by roughly DKK 20bn each year, as compared with an average of approximately DKK 8.3bn per year since 2008, not including 2012-2014. Thereby, SKAT is now experiencing an adverse reaction to its former hard-line policy with vast increases; a policy which is now, to some extent, being softened through MAP negotiations.