One reason for the very sharp increases, is the fact that SKAT, often based on very shallow foundations, disregards TP documentation. The result of this is that SKAT makes estimated tax assessment, and that the appeal and court system is not yet sufficiently geared up for handling TP cases. Moreover, MAP (mutual agreement procedure) does not guarantee that double taxation will not take place, and the Arbitration Convention only applies within the EU.
This being the case, a great need exists for TP cases to receive strategic advisory services and process experience as early as during the tax assessment process.
Plesner lends assistance in TP cases involving total increases in excess of DKK 25 billion.
Normally, we become involved during the tax assessment process, including in negotiations with SKAT, and most often in collaboration with the business's daily tax consultant.
Plesner does not draw up TP documentation or make valuations. We do what we do best – that is provide strategic advisory services and conduct TP cases. In that connection, we also have extensive experience in closing TP cases through settlement.
In 2014 as well as in 2015, Plesner received the "Transfer Pricing Firm of the Year" prize for Denmark, which is awarded by the International Tax Review.
In 2002, Plesner won a case before the Danish National Tax Tribunal, which is regarded as the first actual transfer pricing case, and which involved a pharmaceutical company’s assignment of rights to a (yet to be completed) pharmaceutical product to its foreign parent company.
Since then, no material decisions have been rendered by the Danish National Tax Tribunal on transfer pricing, and no landmark decisions based on the current rules on TP documentation have been made by the Danish National Tax Tribunal or the courts.
Therefore, authoritative clarification is called for in a series of key transfer pricing issues, and this fuels the pronounced uncertainty regarding legal protection in the area.
The vast majority of cases in which Plesner provides assistance are either pending before SKAT or the Danish National Tax Tribunal. The cases involve significant problems such as the following: