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Dell wins landmark case on permanent establishment in the Norwegian Supreme Court

March 2012 - Corporate & Commercial. Legal Developments by Advokatfirmaet Thommessen AS.

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The Norwegian Supreme Court issued its ruling in the so-called “Dell-case” on 2 December 2011. The main issue if the case was whether the Irish company Dell Products could be considered to have a taxable presence in Norway under article 5 (5) of the Tax Treaty between Ireland and Norway (permanent establishment), as a consequence of the activities of the Norwegian company Dell AS.

Dell AS acted as a commissionaire in Norway and sold products to Norwegian customers in its own name but for the account and risk of Dell Products. The commissionaire arrangement was in accordance with the provisions in the Norwegian Commissionaire Act. The Supreme Court concluded that a foreign principal acting through a representative in Norway can only be considered to have a permanent establishment in Norway if the local representative enters into contracts that are legally binding for the principal directly towards the Norwegian customers. A principal is not bound towards the commissionaire`s customers under the provisions of the Norwegian Commissionaire Act. Thus, Dell Products could not be considered to have a permanent establishment in Norway. The Supreme Court thereby set aside the ruling from the Norwegian Appeal Court which, in the same manner as the City Court, had reached the opposite conclusion. Advokat StĂĄle R Kristiansen represented Dell Products in the Supreme Court proceedings.


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