Tax Treaty Case Law around the Globe 2018
1. Aufl. 2019
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S. 141Chapter 14 Denmark: Classification of Foreign Income – Article 26(2) of the Nordic Tax Treaty
Søren Friis Hansen
14.1. Introduction
The most important Danish tax treaty-related case reported in 2017 was the case decided by the Supreme Court (Højesteret) on . The case, reported as SKM2017.506.HR, deals with the qualification for tax purposes of tort compensation received by a company that was resident in Denmark and related to real estate situated in Norway, and the subsidiary taxing right of the residence state under article 26(2) of the Nordic Tax Treaty. The case thus deals with the same tax treaty provision that was the subject of an earlier Supreme Court decision, SKM2015.24.HR.
14.2. Facts of the case
The case began with a decision by the Danish National Tax Tribunal (Landsskatteretten) dated 9 December 2014 (unreported). The facts of the case are relatively simple and were undisputed.
A limited liability company resident in Denmark (A) was for tax purposes subject to compulsory consolidation with another Danish company (B). In 2006, A acquired a portfolio of real estate as part of a sale and leaseback arrangement. A part of this portfolio was situated in Denmark, and ...