Denmark Tax Agency Clarifies Establishment of PE Under DTA With Germany

The Danish Customs and Tax Administration Dec. 20 posted online National Tax Court Decision No. SKM2023.623.LSR, clarifying permanent establishment (PE) rules under the 1995 DTA and 2020 protocol with Germany. A German company planned to reorganize and convert a Danish subsidiary, a distribution company, into a sales agency that would conduct commission-based sales subject to review and approval. The taxpayer sought a binding answer regarding whether such a change would establish a PE in Denmark for VAT purposes. The Tax Agency found that the change would not establish a PE for the German company, but the Tax Council was unable ...