April 2025

25th annual, U.S. and Europe Tax Practice Trends Conference
The conference will focus on practical tax practice trends for multinational corporations and their international advisors, as well as provide insight into how government tax officials may view the international tax landscape in light of important international developments that impact corporate taxpayers. Panelists will include industry leaders, senior government and OECD officials, and leading tax practitioners from the United States and Europe.
Nikolaj Bjørnholm will speak in the panel Transfer Pricing Update co-chaired by Sahel A. Assar and Joseph Duffy. The conference is organised by American Bar Association, in cooperation with the IBA and the US IFA branch. For more information see here.

January 2025

Danish Supreme Court Unanimously Rules in Favor of Accenture in Transfer Pricing Dispute
Bjørnholm Law is extremely pleased to announce that, on 9 January 2025, the Danish Supreme Court overturned the High Court’s ruling in its entirety and ruled in favor of Accenture.
This is a very clear ruling from the Supreme Court and marks the first time it has unanimously ruled in favor of a taxpayer in a transfer pricing matter.
Due to its clarity, this judgment is expected to play a significant role in future disputes.
It has been a pleasure for Bodil Tolstrup and me to represent Accenture.

The Dispute and Ruling from the Supreme Court:
The dispute concerned royalties paid for the use of the Group’s intellectual property (IP) assets and the cross-border borrowing and lending of employees among Accenture’s client-facing entities.

• In the royalty case (licensing of intangible assets):
  The Accenture Group set royalties at 7% of turnover with external clients. This royalty rate was confirmed by a benchmark study comparing the earnings of similar consultancy firms, which showed a range between 5% and 11%. Accenture argued that the royalty rate appropriately reflected the intangible assets of Accenture A/S, including qualified employees and local customers. Additionally, it was argued that the Group’s IP company had appropriately performed DEMPE (Development, Enhancement, Maintenance, Protection, and Exploitation) functions. The Ministry of Taxation, however, contended that the Group’s IP company should be disregarded, and that Accenture A/S should, in principle, not pay any royalties at all.
• In the IAA case (employee hiring-in and -out):
  The Accenture Group set the pricing based on an hourly rate for each employee category at the leasing entity. The hourly rate included two components: a base price primarily based on the employee’s local salary (cost of services), and a 30% mark-up determined by a benchmark study of approximately 50 comparable consultancy firms. Accenture argued that the mark-up covered both additional costs (SG&A costs) and ensured a profit. The Ministry of Taxation, on the other hand, argued that the leasing should not be profitable and that the mark-up should not cover SG&A costs, as these were not relevant for employee leasing.

In both cases, the parties disagreed on whether the transfer pricing documentation was materially deficient.

Supreme Court’s Ruling:
The Supreme Court ruled that the transfer pricing documentation was sufficient, even though the parties disagreed on several points. The Court upheld the precedent that it is for the Ministry of Taxation to prove that the documentation is insufficient. To do so, the Ministry must demonstrate that the documentation is so deficient that it can be equated with a complete lack of documentation. On this basis, it is the Ministry’s responsibility to demonstrate that the pricing applied is not at arm’s length.
When assessing the actual pricing for both IAA and royalties, the Supreme Court noted that the Ministry of Taxation’s arguments had not convinced the Court that the arm’s length principle had been violated.

• Royalty Case:
  Notably, the Supreme Court rejected the Ministry of Taxation’s arguments that the entire IP holding company structure and ownership of the intangibles should be disregarded as fictional. Referring to the evidence presented, the Court concluded that the IP company should be recognized as the legal and economic owner. The Court also found that Accenture’s benchmark study of other listed IT and consultancy firms, using the Residual Profit Split Method (RSPM), appropriately accounted for the intangibles held by the local operating companies. As a result, the 7% royalty rate was deemed acceptable.
• IAA Case:
  In the IAA case, the Supreme Court ruled that the Cost Plus method could be applied and that it was not unreasonable to benchmark against consultancy companies rather than temp agencies.

https://www.domstol.dk/hoejesteret/aktuelt/2025/1/transfer-pricing/

December 2024

Binding Ruling on Refund of Litigation Costs from an Employer
Bjørnholm Law assisted a professor at a Danish university in obtaining a binding ruling confirming that the refund of litigation costs from the employer is tax-exempt. From 2021 to 2023, the professor and the university were involved in a lawsuit filed by a former employee, who claimed not to have been included as an author in a scientific article published in a recognized journal. The case was resolved when the former employee withdrew and settled.
Following the settlement, the university agreed to refund the professor’s litigation costs. However, the university initially believed the refund would be taxable.
After assessing the situation, we concluded that the refund should indeed be tax-exempt. We then secured a binding ruling from the Danish tax authorities, confirming this position. The ruling can be found here: Arbejdsgivers refusion af advokatudgifter var skattefri for medarbejder – info.skat.dk

September 2024

Advisor Liability Case
An American moved to Denmark and, many years later, inherited an American trust established by his parents. The inheritance was tax-free, but the taxpayer was not advised that the returns from the trust were taxable. In a tax audit and appeal case before the National Tax Tribunal concerning the trust’s returns, the taxpayer was assisted by a tax law specialist. The lawyer overlooked that part of the trust consisted of an IRA pension scheme, the returns of which were tax-free under the Pension Taxation Act and the double taxation treaty.
The taxpayer was thus taxed for several years on income that should not have been taxed. The taxpayer claimed the lawyer should be liable for the overpaid taxes – both for the years covered by the National Tax Tribunal case and subsequent years. The lawyer’s liability insurance company refused to pay compensation. After submitting a response, a settlement was reached, where our client received compensation amounting to two-thirds of the claims raised, along with costs awarded.

September 2024

Criminal Proceedings
An American moved to Denmark and later inherited an American trust established by his parents. The inheritance was tax-free, but the taxpayer was not advised that the return from the trust was taxable, which resulted in an incorrect tax return. A tax criminal case for the years 2011–2014 was dismissed in 2022. Despite being aware since 2015 that the authorities considered the trust to be transparent, the taxpayer continued not to self-declare the return from the trust.
As a result, the taxpayer’s income for 2015–2020 was adjusted after another tax audit, and new charges were filed. With the assistance of Bjørnholm Law, it was established that there was no basis for taxing the portion of income derived from an American IRA pension scheme, which reduced the amount evaded. The charge was dropped, taking into account the taxpayer’s use of both American and Danish accountants to assist with tax returns in the United States and Denmark.

June 2024

Deduction of Interest on Family Loans
A taxpayer had received a loan from a family foundation based in a tax haven and sought to deduct the interest. The Danish Tax Agency denied this, citing a lack of documentation to prove the existence of the debt and the payment of interest.
We assisted the taxpayer by appealing the decision to the Tax Appeals Agency, which, in record time, upheld the taxpayer’s claim based on the presented documentation.

May 2024

Significant Reduction in Transfer Pricing Case Following Restructuring
Our client, a Danish subsidiary of a major foreign-listed IT company, underwent a business restructuring. As part of this restructuring, a portion of the Danish business was transformed from a fully-fledged entity to a limited-risk service provider, consistent with other entities in the group. Under the new structure, a non-Danish entity would assume all risks and rewards, while the Danish entity would receive compensation based on total costs plus a 5% markup. The restructuring was only fully effective once all existing service contracts held by the Danish entity expired.
Despite these changes, day-to-day operations remained unchanged, with the Danish entity’s employees continuing to handle activities such as marketing, securing client contracts, and providing delivery and maintenance services.
The Danish tax authorities contended that the restructuring involved transferring intangibles, specifically goodwill, from the Danish entity to the foreign entity, assigning it a value of one billion DKK.
In May 2024, the Tax Tribunal reduced the valuation by almost 90%, which was considered a significant victory. However, in August 2024, the tax authorities appealed the ruling to the courts, where the case is currently pending.

April 2024

24th annual, U.S. and Europe Tax Practice Trends Conference
Nikolaj Bjørnholm spoke in the panel on Multi-Jurisdictional Audits / MAP-APA Issues co-chaired by Annette Keller and Josh Odintz. The conference is organised by American Bar Association, in cooperation with the IBA and the US IFA branch.

March 2024

Criminal Case Withdrawn
An entrepreneur with significant investments filed an incorrect tax return, with assistance from an auditor, failing to report interest income in the million-figure range from an affiliate. The entrepreneur was charged with tax fraud.
With our assistance, we convinced the tax authorities to withdraw the charge, arguing and documenting that the tax affairs were complex. All tax reporting had been handled by the accountant, who simply made an error, as the affiliate’s corresponding interest deduction had been reported correctly.

January 2024

13th Annual IBA Finance & Capital Markets Tax Conference
Bodil Tolstrup spoke on the tax litigation panel alongside formidable colleagues: Jonathan Schwarz (Temple Tax Chambers, London), Liesl Frida Fichardt (Quinn Emanuel Urquhart & Sullivan, London); Christopher Slade (Aird Berlis, Toronto, Ontario); and Stefano Petrecca (CBA Studio Legale e Tributario, Rome).

September 2023

Court Case Concerning VAT Exemption on Vacation Home Rentals
The rental of vacation homes is exempt from VAT, whereas the rental of hotel rooms is subject to VAT. This distinction often leads to significant uncertainties regarding whether vacation housing should be treated like vacation homes or hotel rooms.
In this case, our client had converted a former farmhouse into 10 separate apartments, rented on a temporary basis. These leases fell into two categories: long-term leases (typically for mobile workers, lasting more than one month) and short-term leases (typically for vacation purposes, lasting less than one month). The tax authorities denied VAT exemptions for the short-term leases, arguing that the rental was akin to hotel activity.
Unfortunately, the case was lost. We believe this outcome contradicts a 2012 ruling by the Danish Supreme Court, which held that 36 newly built terrace houses, designated exclusively for vacation use, should be exempt from VAT. In that case, the Ministry of Taxation had brought the case to court, seeking VAT exemption, while the taxpayer argued that VAT should apply, allowing for VAT deductions. The Supreme Court ruled in favor of the Ministry of Taxation.
Since then, the Danish tax authorities have sought to minimize the relevance of the Supreme Court ruling.

May 2023

Bjørnholm Law successfully completed a MAP between Denmark and the UK resulting in full elimination of double taxation. The MAP under the EU Arbitration Convention was a result of a successfully negotiated settlement with the Danish tax authorities.

May 2023

Bodil Tolstrup and Nikolaj Bjørnholm (correspondent to European Taxation) have written a note on the final Danish decision from the Supreme Court on beneficial ownership with respect to dividends following the ECJ Decision in the “Danish Cases” For more information, please see European Taxation Journal, vol 63, issue 5 (2023). Link to note

March 2023

Substantial victory in court case. Our client, an IT provider offered new customers introduction discounts aimed at eliminating or mitigating the penalties to be paid by the new customer to its previous service provider for early termination. The discount was however granted by a cash contribution to the customer paid upfront to mitigate the financial impact of the penalties to the former provider. The Danish tax authorities ruled that the upfront cash discounts were not deductible as operating expenses as they related to the expansion of the business. The oral hearing before the court was scheduled in August 2023. However the Ministry of Taxation gave in before the hearing and accepted in full the substantial claims made by the taxpayer.

March 2023

23rd annual, U.S. and Europe Tax Practice Trends Conference
Nikolaj Bjørnholm has been member of the conference planning board and will speak in the panel “Managing Uncertainty in Transfer Pricing: Evolving Methods and Current State of APA Play” co-chaired by Joe Duffy, Matheson, Dublin. The co-panelist are Markus Baur, Tax Director, Transfer Pricing, IBM, Vienna, Mark van Casteren, Huygens Quantitative Tax Consulting B.V., Amsterdam, Nils Harbeke, Pestalozzi Attorneys at Law Ltd, Zurich, Lisandra Ortiz, Miller & Chevalier Chartered, Washington, DC and Marco Valdonio, Maisto, Milan. The conference is organised by American Bar Association, in cooperation with the IBA and the US IFA branch. For more information, see here.

January 2023

Deduction of Disgorgement
For almost a decade, our client, a Danish subsidiary of a US-listed group, was involved in FCPA violations (bribery). The bribery was discovered by the US parent company, and self-reporting was made to the Danish authorities, the DOJ, and the SEC. The parent company agreed to pay disgorgement to the SEC.
The case concerned whether the Danish subsidiary could deduct the disgorgement. The case involved three key questions:
A comparative study of the US vs. Danish concept of disgorgement (the Danish tax authorities consider disgorgement to be a fine);
Whether the parent company had the right to claim settlement of the amount from the subsidiary; and
Whether the disgorged amount had been subject to tax.
The case was lost at first instance in court, and the client – the Danish subsidiary, which has since been sold to a new parent company – decided not to appeal.

January 2023

12th Annual IBA Finance & Capital Markets Tax Conference
Bodil Tolstrup spoke on the tax litigation panel alongside formidable colleagues: Liesl Frida Fichardt (Quinn Emanuel Urquhart & Sullivan, London); Caroline Ciraolo (Kostelanetz, Washington, DC); Angel Garcia Ruiz (Garrigues, Madrid); Andrea Silvestri (Bonelli Erede Lombardi Pappalardo Studio Legale, Milan); Christopher Slade (Aird Berlis, Toronto, Ontario); and Benjamin Twardosz (Cerha Hempel Rechtsanwälte Gmbh, Vienna).

August 2022

Bodil Tolstrup and Nikolaj Bjørnholm (correspondent to European Taxation) have written a note on another High Court Decision on the EU Arbitration whether or not the taxpayer’s MAP request had been rightly denied by the Danish tax authorities. The note discussed the decision and its ramifications. For more information, please see European Taxation Journal 2022, volume 29 : here

April 2022

Nikolaj Bjørnholm co-chaired together with Sarah Paul of Evershed Sutherland, New York an ethics panel on the impact of GAARs on client advice at the 22nd Annual U.S. and Europe Tax Practice Trends Conference held virtually on April 1, 2022. The panelist were Thierry Boitelle, Geneva, Rachel Fox, Dublin and Eloise Walker, London. GAARs, whether developed as economic substance doctrines over decades of precedence, or formulated in tax laws, have always been important to consider. The recent OECD and EU trends of written GAARs/PPTs, combined with increased taxpayer transparency and public demand for payment of fair taxes, have changed the landscape. The panel discussed GAARs and their ethical implications, including: Ways in which tax opinion practice is changing and how practitioners can protect themselves from clients seeking to rely on loopholes and glitches that might be impacted by GAARs; Disclaimers and questions to clients re: non-tax purposes, along with these ways in which these disclaimers and questions have changed over time (e.g., from 2000 to 2022); Ethical issues if a specific anti abuse provision is not applicable but a GAAR could be; Ethical rules that bind, or should bind, regulators and tax authorities with respect to GAARs; Whether there are limitations on a law firm’s ability to take on certain matters involving GAARs, and what ramifications should be considered from a regulatory perspective; Whether there is a tendency to encourage the use of binding tax rulings due to uncertainty created by the GAARs.. The conference was organised by the ABA, the IBA and the US IFA Branch.

March 2022

Nikolaj Bjørnholm appointed temporary judge with the Court of Appeal of Eastern Denmark from 1 August 2022 through 31 October 2022.

The Court of Appeal of Eastern Denmark acts as court of appeal for the decisions rendered by the district courts and hears both civil and criminal cases but may also act as first instance court in civil cases concerning matters of principle. Cases brought before the Courts of Appeal are heard by a panel of 3 High Court judges and are in ordinary criminal cases supplemented by 3 lay judges and in jury trials supplemented by 9 jurors.

The temporary appointment as appeal court judge prevents Nikolaj from practicing law. Thus, in the period 1 August 2022 through 31 October 2022 all matters will be handled by partner Bodil Tolstrup, whom have worked with Nikolaj since 2005 and since 2016 as partner of the firm.

October 2021

Bodil Tolstrup and Nikolaj Bjørnholm (correspondent to European Taxation) have written a note on first Danish decisions on beneficial ownership following the ECJ Decisions in the “Danish Cases”. The note describes the Danish High Court’s decisions in the first beneficial ownership case decided since the ECJ decisions in Skatteministeriet v. T Danmark (Case C-116/16) and Skatteministeriet v. Y Denmark (Case C-117/16). For more information, please see European Taxation Journal 2021 Issue 10 : Denmark – First Danish Decisions on Beneficial Ownership following the ECJ Decisions in the “Danish Cases” here

September 2021

ITR (International Tax Review) has recently published the 2022 editions of the guides; World Tax and World TP. Notably, Bjørnholm Law is ranked tier 1 in Tax Controversy and one of out of two law firms with a highly regarded transfer pricing individual. Both Bodil Tolstrup and Nikolaj Bjørnholm are individually ranked as leaders and highly regarded. Find more information for World Tax (firm ranking) here and World Tax (ranking of individuals) here. For more information on World TP look here.

September 2021

Bodil Tolstrup has become member of the Tax Committee of the General Council of the Danish Bar and Law Society. The Danish Bar and Law Society is governed by the General Council which has three permanent advisory committees one of which is the Tax Committee.

September 2021

We are pleased to be shortlisted by ITR EMEA Tax Award in three categories (Denmark Tax Firm of the Year, Denmark Transfer Pricing Firm of the year, Denmark Tax Disputes Firm of the Year).

May 2021

In the spring of 2021 Bjørnholm Law prevailed in a High Court transfer pricing case with respect to a loss making company. The taxpayer prevailed in 2018 before the National Tax Tribunal, which inter alia ruled that the mere presence on the Danish market did not generate benefits for the wider group, that warranted a compensation to the Danish subsidiary. The Ministry of Taxation brought the matter before the ordinary courts requesting first instance proceedings before the High Court due to the principal nature of the dispute. The oral hearings were scheduled in the Spring of 2021 but shortly before the Ministry of Taxation decided to withdraw the appeal.

March 2021

Nikolaj Bjørnholm will co-chair together with Kat Saunders Gregor of Ropes & Gray a transfer pricing panel at the 21st Annual U.S. and Europe Tax Practice Trends Conference to be held virtually on March 22-25 2021. The panelist are in-house experts and an OECD representative: Sven Bremer, Head of Transfer Pricing, Siemens, Munich, Stuart Chessman, Vivendi S.A., New York, NY, Francesca Fracassi, Q8 Kuwait Petroleum Italia S.p.A., Rome and Mayra Lucas, Senior Advisor, Transfer Pricing, OECD, Paris. The panel will focus on the impact of the pandemic on transfer pricing policies and operations, including OECD guidance. Panelists will look at the interplay between these dynamics and other developments, including the Coke case in the US, the Apple state aid decision and the Adecco decision in Denmark. In addition, the panel will feature the perspectives of tax executives on navigating changing TP laws and substantiation requirements during this turbulent economic period. The conference is organised by American Bar Association, in cooperation with the IBA and the US IFA branch. For more information, see here

March 2021

In the Chambers 2021 ranking of Bjørnholm Law both Nikolaj Bjørnholm and Bodil Tolstrup are ranked. Find more information see here

December 2020

Nikolaj Bjørnholm has as correspondent to European Taxation published by the IBFD written an article highlighting the aspects of Denmark’s legislative programme for 2020/21 that would be of interest to an international audience. The article discussed, inter alia, COVID-19 tax measures, measures in response to OECD and EU initiatives (including amendments to the loss utilization rules, PE definition and CFC rules), the green tax reform, transfer pricing measures and R&D incentives. For more information, please see European Taxation Journal 2021 Issue 1 : Denmark – The Legislative Programme for 2020/2021 – IBFD here

Nikolaj Bjørnholm has written the Denmark chapter to the commentary on the EU Council Directive 2017/1852 on tax dispute resolution. The commentary which is edited by Raul-Angelo Papotti and published by Wolters Kluwer currently covers 11 EU countries. For more information, see here

November 2020

Bodil Tolstrup and Nikolaj Bjørnholm have written an article published by the International Transfer Pricing Journal discussing the Danish Supreme Court ruling in the Adecco, where the Supreme Court overturned the High Court ruling. The dispute concerned the arm’s length nature of trademark royalties. Find more information here

In the WWL Who’s Who Legal Corporate Tax 2020 both Bodil Tolstrup and Nikolaj Bjørnholm are ranked as leading corporate tax controversy practitioners. Find more information here

August 2020

Nikolaj Bjørnholm has written an article published by the International Transfer Pricing Journal discussing the Danish High Court ruling in the Sandoz Transfer Pricing Matter – TNMM inclusion of Booked Goodwill When Comparing with Benchmarks? The dispute concerned whether under the TNMM, the exclusion by Sandoz of Goodwill amortizations were justified when comparing its EBIT margin with those of a benchmark study. Find more information here

February 2020

Client Choice has ranked Bodil Tolstrup as Client Choise Winner 2020 for Denmark. Find more information here

Nikolaj Bjørnholm has written an article published by the International Transfer Pricing Journal discussing the Danish High Court ruling in the Adecco case. The dispute concerned the arm’s length nature of trademark royalties. Find more information here

January 2020

Nikolaj Bjørnholm was panelist in the panel “Significant International Tax Cases” at the 9th Annual IBA Finance & Capital Market Tax Conference held in London. Find more information here here

August 2019

In the spring of 2019 Bjørnholm Law prevailed in two cases.

In May 2019 the National Tax Tribunal found in favor of our client in a transfer pricing dispute concerning allocation of risk and thus accepted that group related counterparties could bear the risk of the other party’s failure to take delivery / deliver goods without this being separately priced. The decision has not been appealed to the courts. The decision is not published as the factual circumstances could not be sufficiently anonymized.

In March 2019 our client and the tax authorities reached a settlement whereby our client obtained a refund of excess surcharge (“restskattetillæg”) of a significant mDKK amount (equaling +90% of the original claim). The case had been pending at the National Tax Tribunal for more than two years when Bjørnholm Law was retained by the client in December 2018.

May 2019

Bjørnholm Law has contributed to the latest edition of ”Tax Management International Forum” concerning Tax Reporting Units. Read our contribution here Denmark March 2019

April 2019

Nikolaj Bjørnholm will speak at the 19th Annual U.S. and Europe Tax Practice Trends Conference to be held in Paris 3-5th April 2019. The conference is organised by American Bar Association. Find more information here

Once again Nikolaj Bjørnholm will be a panelist and the topic will be “Transfer Pricing Cases and Dispute Resolution Mechanisms”.

Nikolaj Bjørnholm er en af landets mest erfarne skatteprocedører og blandt de meget få skatteadvokater, som siden erhvervelse af møderet for Højesteret i 2000 har ført mere end 15 sager for Højesteret. Nikolaj er ifølge en undersøgelse fra 2014, den næstmest vindende skatteadvokat for Højesteret. Nikolaj er opført som ledende inden for sit felt i alle udenlandske publikationer så som Chambers, Who´s Who Legal; International Tax Review, Best Lawyers og International Law Office, hvor klienterne omtaler Nikolaj som følger: “talented”; “intelligent, creative and responsive”; “fast and goes straight to the issue”; “exceptionally good”; and “particularly strong in international tax and litigation”.

Nikolaj har gennem hele sin karriere ligeledes udgivet bøger om skatteret og en lang række skatteretlige artikler i både danske og udenlandske publikationer. Nikolaj har været korrespondent for Tax Notes International; European Taxation og BNA/Bloomberg.

LÆS MERE

Bodil Tolstrup er specialiseret i førelse af skattesager. Hun har repræsenteret en bred vifte af klienter fra personer og små virksomheder til venture fonde og fagforeninger. Bodil er forfatter til en række artikler udgivet af både danske og udenlandske tidsskrifter, og hun er korrespondent for BNA/Bloomberg.

LÆS MERE

Nikolaj Bjørnholm

Advokat (H), HD(R)
Attorney-at-law, Partner

T. +45 30 93 71 93

nbj@bjornholmlaw.com

Bodil Tolstrup

Advokat (L)
Attorney-at-law, Partner

T. +45 20 12 06 90

bto@bjornholmlaw.com