This section deals with the validity period of an APA.

The section contains the following:

  • Duration of the arrangement;
  • What happens when the period expires;
  • Tax return if the agreement is still pending.

Duration of the arrangement

There are no general guidelines for the duration of bilateral and multilateral APAs. Practically, however, they typically cover five years.

What happens when the period expires?

The Danish Tax Agency expects the applicant to contact the competent authorities a reasonable time before the expiration of the initial arrangement in order to discuss whether the APA can and should be extended. If facts and circumstances have not changed significantly, the length of the administrative processing will typically be much shorter than the length of the processing of the initial application.

Tax return if the agreement is still pending

For various reasons, the situation may arise that a bilateral or multilateral APA relating to multiannual current transactions will only be completed when the enterprise has had to file a tax return at least once within the period covered by the APA.

The question might therefore arise as to how to file a tax return at that time. That must be clarified during the ongoing contact between the competent authorities. It must also be clarified how both/all states will treat those years if the form of the final APA differs from what has already been filed for those years.