Two years after the completion of a pair of bilateral advance pricing agreements (“BAPAs”) for a leading Danish technology company, Danish and Chinese tax authorities have concluded a third BAPA, according to the website of the Danish Tax Authorities (“DTA”).

So far, Denmark remains the only European country to have concluded a bilateral APA with China. However, as Europe develops greater economic ties with China, it is likely that more European countries will be involved in APAs with China.

Peter Loft, Permanent Secretary at the Danish Ministry of Taxation, who signed the agreement on the Danish side, was quoted as stating that the agreement “underlines the close cooperation between Chinese and Danish tax authorities, which are built over time through negotiations such as these. Bilateral tax treaties such as this APA resolve existing and potential transfer pricing disputes. APA agreements not only create fiscal certainty and stability for businesses, but also pave the way for investment and trade between countries.”

According to the article, Denmark has so far concluded 18 APAs, two of which were concluded in 2011, and has an additional seven APAs under negotiation.

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