Tag: Conclude contracts on behalf of

Norge vs. Dell Norge. December 2011, HRD saknr 2011-755

The Irish company Dell Products was taxable in Norway for years 2003-2006. The issue was whether Dell Products had a permenent establishment in Norway, cf. Article 5. 5 in the tax treaty between Ireland and Norway from 2000. Dell Products sold PC’s and equipment by a commission agreement in which the Irish company was Principal and the Norwegian company Dell AS was commissioner. Both the companies are part of the Dell group. Dell AS sold to customers who were large enterprises and the public sector. It was not disputed that the agreement was not legally binding on Dell Products in relation to customers. Dell Products would have a permanent establishment in Norway and may be taxable Norway, if Dell Norway had acted “on behalf of” and had the “authority to conclude contracts on behalf of the” Dell, ref. Tax Treaty Article 5. 5. Unlike the District Court and the Court of Appeal the Supreme Court did not wote in favor of the tax authorities. The wording of the article strongly support that the commissioner must bind the principal in relation to the customer. The article is identical to the OECD Model Convention, and it had the same weight that also the commentary for this support a requirement for judicial bond. Also other legal sources pointed in the same conclusion. When both the wording and other legal sources support this condition, Article 5. 5 cannot lead to an anna result. The Supreme Court came to the conclusion that Dell Products did not have a permanent establishment in Norway. Click here for translation Norway Dell-Norge-2011-december-HRD-saknr2011-755 ...