Danish Tax Board Holds Nature of Employee's Activities and Not the Authority to Conclude Contracts is Decisive Factor in Existence of a PE

On 22 May 2018, the Danish tax authority (SKAT) published a binding ruling from the tax board concerning the existence of a permanent establishment (PE) under the 1996 tax treaty between Nordic Countries. The binding ruling was requested by an unnamed foreign company (covered by the Nordic treaty) that supplies products to restaurants, cafes, and grocery stores. Because of profitability issues, the foreign company decided to close its wholly-owned Danish company and engage a third-party dist…