Tax Treaty Case Law around the Globe 2012

Norway: Agency Permanent Establishment

8.1. Introduction

The Norwegian Supreme Court’s decision in the Dell Products case has been long awaited, not only in Norway but also internationally. This is because many structures used internationally are similar to that at issue in this case. In essence, the Supreme Court concluded that a commissionaire acting as such is not a permanent establishment for the principal under the 2000 Ireland-Norway income tax treaty. As the wording of the English version of this treaty is identical to the OECD Model Convention (OECD Model), the decision has an impact on almost all tax treaties to which Norway is a party. The extent to which it will also have an impact on other tax treaties remains to be seen.

8.2. Facts of the case

Dell Products is a limited company established under Dutch law but resident for tax purposes in Ireland. This company sells Dell equipment to customers in Europe, the Middle East and Africa. The company buys equipment mainly from its parent company, Dell Products (Europe) BV, which is also a limited company established under Dutch law but a tax resident of Ireland.

Dell Products sells the equipment through commissionaires in each coun...