Denmark Tax Agency Explains Deduction of Losses From PE in Norway

The Danish Customs and Tax Administration Jan. 12 posted online Tax Council Binding Answer No. SKM2023.17.SR, explaining the deduction of losses from a permanent establishment (PE) in Norway. The taxpayer, a group company, established a branch in Norway that constituted a PE and didn’t opt for international joint taxation. Upon creating the wholly-owned Norwegian subsidiary, the branch activity was sold and transferred to the subsidiary resulting in the branch being deregistered. The taxpayer sought to clarify the deduction of losses from the branch activity. The tax council clarified that the taxpayer can’t deduct losses because: 1) the group didn’t exhaust …