Danish National Tax Tribunal publishes its first decision regarding a cash pool arrangement

Tax Insights ()
In early 2014,the National Tax Tribunal (“Landsskatteretten”) published its first transfer pricing decision regarding a cash pool arrangement. The decision concerns the determination of intercompany interest rates on deposits and borrowings in the cash pool.
The National Tax Tribunal found that the Danish tax authorities were allowed to disregard the transfer pricing applied by the company due to inadequate transfer pricing documentation. Furthermore, the National Tax Tribunal concluded that the Danish company’s deposits in the cash pool arrangement should be considered as loans to the cash pool administrator, and that the interest rate would have to be set accordingly.