Contents

This section concerns the possibility to allow the outcome of the APA to have retroactive effect.
The section contains the following:

• APA with retroactive effect (roll back);
• Audit of earlier years in connection with the APA.

APA with retroactive effect (roll-back)

In some cases, an enterprise and/or the tax authorities may desire that the transfer pricing model in the APA regarding future years should also apply for income assessments of earlier years (roll-back).

An essential condition for allowing such a reopening/extraordinary assessment is that the competent authority or the competent authorities of the other states approve of this roll- back for the period and the amounts concerned. For how many years such an adjustment could be made retroactively depends on the national legislation of each state, and what the competent authorities might agree.

Audit of earlier years in connection with the APA

If, during the process of gathering information to be used for an APA, the Danish competent authority becomes aware that the arm’s length principle has not been adhered to in previous years’ self-assessments, the tax assessments of earlier years may be adjusted in accordance with the ordinary rules for tax assessments.