Tax Treaty Case Law around the Globe 2021

S. 67Denmark: Taxation of Income from Independent Personal Services? – Article 14 of the Denmark/China Tax Treaty

Søren Friis Hansen

S. 68I. Introduction

There were no reported tax treaty cases from the Danish Supreme Court or the two Danish High Courts in 2020. There are, however, a number of reported binding rulings from the Tax Assessment Council (Skatterådet, abbreviated in Danish to SR, here as TAC). The binding ruling, reported as SKM2020.382.SR, deals with the question of whether profits from independent personal services provided in China are taxable in Denmark because the taxpayer’s stay in Denmark was prolonged beyond 90 days due to Covid 19 restrictions. The ruling is based upon § 1, stk. 1, nr. 1 of the Act on Taxation at Source (kildeskatteloven, or ‘TSA’) and Article 14 of the Denmark-China tax treaty.

II. Facts of the Case

The taxpayer who had previously been a resident of Denmark had been a resident of China for 20 years. There, she had established an independent business as a consultant. She had four employees working in China.

In 2020, the taxpayer was scheduled to go to Denmark for hospital treatment. The hospital treatment was scheduled for 17 March 2020, and the taxpayer lande...