Tax Treaty Case Law around the Globe 2019

S. 2721. Introduction

The most important Danish Tax Treaty case, which was reported in 2018 was the case decided by the Højesteret (the Supreme Court) on 4 January 2018. The case, reported as SKM2018.60.HR, dealt with the question of whether a Norwegian ship could be classified as being “operated in international traffic” according to article 15(3) of the Nordic Tax Treaty.

2. Facts of the case

The case began with a decision of the Danish National Tax Tribunal (Landsskatteretten) dated 9 March 2015, reported as SKM2015.185LSR. The facts of the case are relatively simple and were undisputed.

During the fiscal year of 2012 the taxpayer, who was resident in Denmark, worked as an officer aboard a Norwegian ship, “Bourbon Oceanteam 101”, which was operated off the cost of Angola. The ship’s tasks included inspection, maintenance and repairs on oil installations in the North Sea. The ship operated in specific areas of the sea (called “Blok 18” and “Blok 31”), located between 24 and 200 nautical miles from the coast of Angola.

The taxpayer had paid to Norway, a social security contribution at the rate of 7.8% on the income which he received as a result of working aboard the ship. Since the vessel wa...