Content area
Full text
Norway
COPENHAGEN- A March 2 ruling from Norway's Bogarting Court of Appeal disallowing a tax exemption for a domestic arm of the computer manufacturer Dell could have consequences for other multinationals using similar models, a practitioner in Oslo told BNA April 12.
Thor Leegard of KPMG added that other companies should take note of the court's "cursory" acceptance of the tax authority's estimate of Dell's taxable profits.
The case concerned the tax arrangements made by Dell AS, a Norwegian arm of the computer giant, in the years 2003-06 when, the company argued, it was acting as an independent agent and thus did not constitute a permanent establishment for tax purposes under the terms of the Norway-Ireland tax treaty.
Commissionaire Company. During this time, Dell AS argued, it was operating as a so-called commissionaire company, under which sales were made on a commission basis for Dell AS's principal company, Dell Products Ltd. The parent company was located in Ireland, where manufacturing operations were based and business taxes were significantly lower. Dell Products was itself owned by Dell Products (Europe) BV, which also was resident in Ireland. Sales made by Dell AS in Norway were made on the account of Dell Products Ltd.
Contracts it entered into in Norway were not legally binding on its Irish principal, Dell AS argued, as it was acting as an agent of its parent. Thus tax liability for Norwegian sales should be confined to Ireland. It therefore reported its...