Danish Tax Court Decision Clarifies Permanent Establishment Rules for German Company

• Danish Customs and Tax Administration clarifies permanent establishment rules under the 1995 DTA and 2020 protocol with Germany
• A German company planned to convert a Danish subsidiary into a sales agency
• The company sought clarification on whether this change would establish a PE in Denmark for VAT purposes
• The Tax Agency found that the change would not establish a PE for the German company
• The Tax Council was unable to confirm the decision
• On appeal, the National Tax Court confirmed that the German company wouldn’t establish a PE in Denmark under the agent rule
• The German company is not required to register for VAT in Denmark.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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