Danish Supreme Court Rejects Accenture's Transfer Pricing: Emphasis on Documentation and Economic Substance

9 January 2025

The Danish Supreme Court has upheld the Ministry of Taxation’s assessment in a landmark transfer pricing case involving Accenture A/S. The decision clarifies how Danish authorities evaluate the arm’s length principle, with a focus on documentation quality, benchmarking, and the alignment of functional and risk profiles.

If documentation is found insufficient:

• Inadequate Substantiation: The Court may reject the taxpayer’s transfer pricing analysis, citing failure to demonstrate comparability and economic justification.

• Income Adjustment: The Ministry is entitled to adjust taxable income if the taxpayer’s methods and benchmarks are deemed unreliable or inconsistent with OECD standards.

The case centered on whether the functional and risk profiles were accurately reflected and whether the transfer pricing methods were supported by credible benchmarks. The Court noted that the documentation relied heavily on internal data, lacked external comparables, and misrepresented the economic roles of the parties. The ruling reinforces the importance of robust transfer pricing documentation and accurate functional analysis in complying with Danish regulations.

Full Link to English Translation: DK-vs-ACC-Supreme-Court ENG