Denmark Tax Agency Clarifies Permanent Establishment, Place of Management Rules for Nonresident Company Income Taxation

The Danish Customs and Tax Administration Sept. 16 posted online Tax Council Binding Answer No. SKM2025.525.SR, clarifying corporate tax liability and permanent establishment (PE) rules for a nonresident company with management activities in Denmark. The taxpayer, a nonresident company, had its commercial director working partly from Denmark while overseeing group commercial activities. The company made sales to Denmark exclusively through external distributors, with no direct sales or permanent employees in Denmark. The taxpayer sought clarification regarding tax liability and PE rules. The Tax Council found that: 1) the taxpayer wasn’t fully liable for tax in Denmark, because daily management was ...