Danish tax update: Transfer pricing legislative changes and implications in 2025
Overview
On June 3, 2025, the Danish parliament passed significant amendments to the Danish Tax Control Act, reshaping Denmark’s transfer pricing landscape. The aim of these changes is to ease compliance for smaller businesses while enhancing the oversight of high-risk transactions.
The new '''De Minimis'' thresholds
The reform introduces the ‘’De minimis thresholds’’ for transfer pricing documentation, which exempts companies with total controlled transactions under DKK 5 million per year from preparing formal documentation. In addition, intra-group receivables and payables below DKK 50 million can also benefit from this exemption. The measure significantly reduces compliance burdens for businesses with limited intra-group activities. The exemption does not apply to transactions involving intangible assets (e.g., royalties or intellectual property) and dealings with related parties in non-EEA countries that lack a double tax treaty with Denmark. In these cases, full documentation is required regardless of transaction size.
Higher ''small group'' thresholds:
To provide broader eligibility for relief and allow more groups of companies to qualify for exemptions, the financial thresholds that define a ‘small group’ have been increased.
- Turnover thresholds increased from DKK 250 million to DKK 391 million
- Balance sheet total increased from DKK 125 million to DKK 195 million
- Employee threshold will remain at fewer than 250 full-time employees
Simplified compliance process
The reform also simplifies compliance by eliminating the requirement for auditor statements in connection with transfer pricing documentation, which reduces the administrative burden. Additionally, the transfer pricing documentation deadlines will now automatically align with the extensions granted for corporate income tax returns, meaning companies no longer need to apply for these separately.
Business implications
Around 1.500 companies, primarily SMEs with limited intra-group dealings, will benefit from the simplified compliance. However, it is advisable to maintain internal records that demonstrate arms-length pricing as a precaution and as a defence in audits. For larger companies with complex or high-risk transactions, the documentation requirements will remain unchanged for now. To assess whether your business can take advantage of these new thresholds, it's recommended to:
- Assess eligibility based on the new limits
- Review the intragroup transaction for transactions that will still require documentation
- Update the compliance calendars to reflect the automatic deadline alignment
- Review and strengthen the internal policies and procedures for arm’s length pricing
Final remarks
We work with many ambitious SMEs, and it's common to hear CEOs and CFOs frustrated by the high cost of full transfer pricing compliance. This reform is a welcome step toward a more proportional approach, easing the burden on low-risk businesses and reflecting broader international trends focused on substance over form. That said, even if your company qualifies for the exemption, keeping internal records (such as pricing rationale or benchmarks) remains a smart precaution — especially in audit-prone industries. It's also worth noting that these simplifications apply only in Denmark, meaning that local transfer pricing rules in other jurisdictions may still "bite".
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