Denmark: Transfer pricing adjustments on intercompany transactions upheld (Supreme Court decision)

Intercompany transactions between the taxpayer, an oil and gas company, and two of its subsidiaries

Intercompany transactions between an oil and gas company and two of its subsidiaries

The Danish Supreme Court on 6 September 2023 overturned a decision of the High Court, and upheld the tax authority’s transfer pricing adjustments with respect to intercompany transactions between the taxpayer, an oil and gas company, and two of its subsidiaries.

The case revolved around the question of whether the taxpayer’s preliminary surveys aimed at discovering new oil fields, the performance guarantees extended to the newly established subsidiaries, and the alleged associated know-how required ongoing compensation from the subsidiaries in the form of profit-sharing, royalties, or comparable arrangements.

In addition, the case addressed the issue of whether technical and administrative support could be invoiced to the subsidiaries at cost. 

Read a September 2023 report [PDF 224 KB] prepared by the KPMG member firm in Denmark

 

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.