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



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