Tax Treaty Case Law around the Globe 2015

S. 163Norway: Dividend; Article 10 of the Nordic tax treaty

Eivind Furuseth

I. S. 164Introduction

The Transocean case (case nr 12-135791TVI-OTIR/08) gives rise to several issues. From an international tax point of view, the case is interesting in at least two respects. Firstly, the issue arises whether the tax treaty prohibits the application of the Norwegian general anti-avoidance rule (GAAR). Secondly, the question arises whether the recipient of a dividend is to be considered as the beneficial owner under Article 10(3) second sentence of the Nordic tax treaty.

II. Facts

The case concerns the tax assessment of Transocean Offshore International Ventures Ltd. (TOIVL) and Transocean Offshore Ltd. (TOL), both registered in the Cayman Islands. Up until 2000, Transhav AS (Transhav), a Cayman Island Company held a Norwegian limited liability company. After a reorganization of the group structure in January 2000, Transhav was held by Transocean Offshore Holding ApS (TOHA), a tax resident company in Denmark. The reorganization of the group structure is an example of a classical treaty shopping structure where an intermediate holding company (the Danish Company TOHA) was implemented between the Norwegian C...