Denmark Cracks Down on Tax Evaders: Additional Resources and New Centre to Target Multinationals’ Alleged Evasion

Denmark is stepping up its efforts to combat tax evasion, particularly among multinational companies. As part of a broader tax control reform, the Danish Tax Authority (DTA) will be assigning an additional 100 officers to focus on measures against tax havens and international tax evasion.

New Centre for International Corporate Tax

One of the key initiatives is the establishment of a new centre for international corporate tax, which will tackle the challenges posed by globalization in calculating and settling corporate tax. The centre will also play a crucial role in identifying and analyzing the greatest risks within the area of transfer pricing.

Transfer Pricing Unit

A specialized unit will be set up to focus specifically on transfer pricing, working to identify and analyze the most significant risks in this area. This unit will contribute to targeted controls of transfer pricing and keep the DTA informed about international trends and risks related to transfer pricing.

Strengthening International Cooperation

The Danish Government is also strengthening international cooperation to combat tax evasion and aggressive tax planning. The European Union has agreed on a series of initiatives designed to facilitate information sharing and reporting across member states, including a proposal for an EU-wide alarm center to report cross-border tax fraud.

Analysis to Identify Areas for Improvement

Additionally, the Government has initiated an analysis to identify areas where tax control can be further strengthened by 2023 and determine whether additional resources are needed to combat international tax evasion.

Success in Scrutinizing Multinationals’ Transfer Pricing Policies

The DTA has already had significant success in scrutinizing multinationals’ transfer pricing policies, resulting in additional Danish taxable income of over DKK 80 billion (approximately EUR 10.7 billion) from 2010-2019. On average, the DTA makes around 170 transfer pricing adjustments annually, with more than 75% of these cases involving increases of over DKK 100 million (approximately EUR 13.5 million).