Denmark v. Maersk Oil and Gas
Denmark v. Maersk Oil and Gas
Jurisdiction
Denmark, Danish Tax Agency (SKAT)
Summary of Facts
Maersk Oil and Gas faced allegations of using an aggressive transfer pricing arrangement to report losses despite high profitability. The dispute involved a know-how license agreement with subsidiaries in Algeria and Qatar, where the parent company received a 1.7% royalty rate.
Key Issues
The main issue was whether the transactions were at arm’s length, as the Danish courts initially ruled against Maersk’s pricing arrangement.
Decision and Reasoning
The Danish courts required the case to be reconsidered by the tax administration, emphasizing that the transactions did not reflect the price independent parties would set.
Importance and Implications
The case highlights the aggressive stance of Danish tax authorities on transfer pricing and the importance of ensuring that intra-group transactions comply with the arm’s length principle.
