Tax Treaty Case Law around the Globe 2015
1. Aufl. 2016
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S. 159Denmark: Capital Gains; Permanent Establishment; Article 7 of the Denmark-Germany Tax Treaty
Søren Friis Hansen
I. S. 160Introduction
The Danish Tax Treaty case of 2014 is the case reported as SKM2014.347.HR, decided by the Supreme Court (Højesteret) on 14 February 2014. The case deals with a taxable loss on shares allocated to a Permanent Establishment located in Denmark belonging to an Aktiengesellschaft (AG) resident in Germany.
II. Facts of the case
A. The factual background and the legal base
The case began with a decision of the National Tax Tribunal (Landskatteretten) dated 6 July 2009. Two German banks organized as Aktiengesellschaften (AG 1 and AG 2), which were resident in Germany for tax purposes, had each set up a permanent establishment located in Denmark. AG 1 had, in 1998, acquired 100 % of the shares of a Danish public limited company (A/S) operating a bank in Denmark. The shares of the Danish A/S were for tax purposes allocated to the Permanent Establishment of AG 1, located in Denmark.
On 2 June 2003 the two German Aktiengesellschaften were merged. The merger was carried out without tax relief. The merger resulted in the termination of the permanent establishment of AG 1 in De...