29 September 2016 Danish Tax Board rules datacenter does not create PE for nonresident taxpayer The Danish Tax Board has ruled that a datacenter in Denmark, operated under a hosting agreement by the Danish subsidiary of a nonresident taxpayer, does not constitute a permanent establishment (PE) of the nonresident taxpayer. The ruling of the Tax Board is in line with the general position of the OECD Model that a subsidiary does not create a PE for its parent company even though the only business of the subsidiary is to carry out services for the parent company assuming that the premises of the subsidiary is not at the disposal of the parent company. The most interesting feature of the decision is the fact that remote control to the datacenter did not mean that the nonresident parent company was held to operate the servers. Document ID: 2016-1649 |
