Tax Treaty Case Law around the Globe 2021

S. 64I. Introduction

There were no reported tax treaty cases from the Danish Supreme Court or the two Danish High Courts in 2020. There were, however, a number of binding rulings from the Tax Assessment Council (skatterådet, abbreviated in Danish as SR and here as TAC) reported in 2020. The binding ruling, reported as SKM2020.208.SR, deals with the question of whether the home office of a key employee constituted a permanent establishment for the company that was the employer. The employee was resident in Denmark while the employer was a company resident in Germany. The ruling is therefore based upon Article 5(1) and 5(2) of the Denmark-Germany tax treaty.

II. Facts of the Case

An employee was resident in Denmark. He was employed as a country manager by a German company, X GmbH, that was resident in Germany. The country manager had responsibility for the Danish market. The activities of the company included the sale of equipment.

The employment contract of the country manager was limited to a period of six months. The country manager was scheduled to work three days per month in Germany. For personal reasons, the country manager had to return to his home in Denmark. He was therefore schedul...