Denmark – SKM2025.590.LSR Transfer Pricing Decision

Comprehensive Legal Analysis of SKM2025.590.LSR Transfer Pricing Decision

Executive Summary

This Danish Tax Appeals Board (Landsskatteretten) decision SKM2025.590.LSR, dated 16 May 2025, concerns H1 A/S’s transfer of shares in a foreign company through creation of a loan agreement that was not recognised for tax purposes, resulting in H1 A/S’s taxable income for 2014 being reduced by disallowed interest income of DKK 6,462,734, with the Tax Appeals Board upholding the Tax Authority’s (Skattestyrelsens) decision. This case provides critical guidance on the application of substance-over-form principles in related-party transactions and the limits of tax-motivated restructurings within family-controlled corporate groups.

I. Factual Background

A. Corporate Structure and Ownership

Initial Ownership Framework

H1 A/S was wholly owned by H2 A/S, which served as the parent company of the H-group and was substantially owned by the H-family consisting of A with 19.5% and his two sons B and C and their related parties with 35.5% each.

2011 Restructuring

In the second half of 2011, A and his two sons and their immediate families each established a company that they each wholly owned, with all three companies having the purpose of owning shares and interests in other companies: A established H3 ApS, B and his immediate family established H4 ApS, whilst C and his immediate family established H5 ApS.

2014 Further Restructuring

In the second half of 2014, H3 ApS and H4 ApS established H6 ApS, and C established H7 ApS, which subsequently established H8 ApS with 55.56% owned by H6 ApS and 44.44% owned by H5 ApS, resulting in H3 ApS’s ownership share of H8 ApS being 11.12%, whilst H4 ApS’s and H7 ApS’s ownership shares in H8 ApS each amounted to 44.44%.

B. Background to the Joint Venture

H1 A/S previously operated a production business in Denmark and moved production from the former factory to a foreign location, and in connection with this, H1 A/S entered into a joint venture agreement in April 2009 with a foreign company, G1 A.S., whereby it sold 50% of the share capital in G2 A.S. to H1 A/S. According to sections 5.1 and 5.2 of the agreement, G2 A.S. was to increase its share capital to an amount equivalent to EUR 28.4 million, and H1 A/S and G1 A.S. were each to pay for the shares within 3 years.

H1 A/S contributed in 2010 by providing security for a loan to G2 A.S. granted by F1-Bank pursuant to a loan agreement dated 28 July 2010, and as security for the loan, F1-Bank received a pledge in H1 A/S’s shares in G2 A.S. pursuant to an agreement dated 16 August 2010.

C. First Share Transfer (20 December 2013)

Transaction Structure

On 20 December 2013, H1 A/S sold its 50% shareholding in G2 A.S. to H5 ApS, H4 ApS, and H3 ApS for a price of DKK 100 million, which was paid by entering into a loan agreement attached as Appendix A to the share transfer agreement.

According to section 1.1 of the agreement, the buyers were aware that the shares in G2 A.S. were pledged to F1-Bank, and according to section 3.2 of the agreement, the purchase price of DKK 100 million was determined taking into account that H1 A/S remained obligated under the guarantee obligation issued to F1-Bank for the bank’s loan to G2 A.S.

Loan Agreement Terms

According to the attached loan agreement dated 20 December 2013, H1 A/S granted loans to H5 ApS, H4 ApS, and H3 ApS to finance these companies’ purchase of shares in G2 A.S., and the loan bore interest according to section 2.1 of the loan agreement at an interest rate of 3-month CIBOR plus 6% p.a.

Section 3 of the loan agreement contained provisions for an “upside payment” in addition to interest, which was triggered in the event of an “Exit” (defined as G2 A.S. being listed on a stock exchange or if G2 A.S. or the company’s activities were sold to a third party), calculated based on a positive difference between the value of the loan as of 31 December 2013 and the value of the loan at the time the payment was triggered, with the payment amount decreasing by 10 percentage points per year, ranging from 50% to 0%.

Regarding loan repayment, section 4 stated that the loan including interest fell due for payment in full 30 calendar days after the date of an “Exit” or no later than 17 January 2017, with the repayment provision subsequently amended by Amendment 1 from December 2016 to 1 January 2020, and by Amendment 2 from December 2019 to 1 January 2024.

Financial Position of Buyers

According to the available annual reports for 2013 and 2014 for H5 ApS, H4 ApS, and H3 ApS, the companies had equity as of 31 December 2013 of DKK 378,830, DKK 375,990, and DKK 72,533 respectively, and equity as of 31 December 2014 of DKK 370,580, DKK 367,740, and DKK 64,272 respectively.

D. F1-Bank Consent

A consent letter dated 21 May 2014 from F1-Bank was submitted, which stated that the letter agreement and the consents contained therein were subject to fulfilment to F1-Bank’s satisfaction of certain terms and conditions, including that the New Shareholder shall be wholly owned (either directly or indirectly) by the H Family and the Borrower and Guarantors procure to furnish to F1-Bank the full details of the New Shareholder following its incorporation.

E. Second Share Transfer (20 December 2014)

On 20 December 2014, H5 ApS, H4 ApS, and H3 ApS entered into a share transfer agreement with H8 ApS for the transfer of shares in G2 A.S., whereby the three companies transferred 50% of the share capital in G2 A.S. for a price of DKK 106,462,735, which corresponded to the original loan taken out by H4 ApS, H5 ApS, and H3 ApS with accrued interest.

The purchase price was paid by transfer of the loan agreement dated 20 December 2013, pursuant to a loan transfer agreement dated 20 December 2014, whereby H5 ApS, H4 ApS, and H3 ApS transferred all rights and obligations under the loan agreement to H8 ApS, and H1 A/S accepted the change of debtor.

According to the available annual report for 2014/2015 for H8 ApS, the company had negative equity as of 31 December 2015 of DKK 4,795,644.

F. Subsequent Developments

In October 2015, G2 A.S. refinanced the loan with F1-Bank to a loan with F2-Bank for EUR 20 million, which H2 A/S guaranteed, and it was stated that the pledge of the shares and F1-Bank’s condition and approval of share sales requiring ownership directly or indirectly by the H family were no longer applicable.

According to the management report in the published annual report for 2023 for H8 ApS, H8 ApS sold a portion of the shares in G2 A.S. in 2023, after which H8 ApS owns 29.90% of the shares in G2 A.S., with the company’s income statement for 2023 showing a profit of DKK 54,460,470, and equity of DKK 111,248,842.

II. Tax Authority’s Position and Analysis

A. Assessment Adjustments

The Tax Authority increased the company’s taxable income by DKK 6,462,734 for the 2014 income year, as H1 A/S’s transfer of shares in G2 A.S. in exchange for creation of a loan agreement was not recognised for tax purposes, and consequently the balance of loss carryforwards at the end of income years 2014, 2015, and 2016 was assessed at DKK 44,891,483, DKK 15,375,014, and DKK 9,092,526 respectively.

B. Tax Consequences Analysis

The actual tax consequences of the companies’ internal loan arrangement were that H1 A/S included interest income of DKK 6,462,734, which could be offset against previous years’ losses, whilst H4 ApS and H5 ApS each claimed an interest deduction of DKK 2,843,603 and H3 ApS claimed an interest deduction of DKK 775,528, with the resulting tax losses being carried forward for use in later income years.

C. Lack of Business Rationale

The Tax Authority noted that H2 A/S had activities similar to or closely aligned with the activities conducted in H1 A/S, making it difficult to characterise the group’s specific core business, so the company’s justification for separation to streamline the group appeared questionable, and the sale from H1 A/S to H4 ApS, H5 ApS, and H3 ApS actually meant that the activity was separated to companies owned by the same group of people who own H1 A/S.

D. Change in Ownership Structure

After the “relocation/separation” of the shares in G2, two members of the H family owned a larger share of the shares through H4 ApS and H5 ApS, and the H Foundation’s indirect ownership share no longer existed, and there was thus a change/shift in ownership, and the company stated that the decision to sell the shares in G2 was made at the shareholder level with no record of the decision, which was not found to be common for a decision of a magnitude of DKK 100 million.

E. Inadequate Financial Capacity of Buyers

The Tax Authority found that the purchasing companies were not seen to have their own funds that could ensure flexibility to invest in development, whereas H1 A/S had equity of over DKK 220 million in both income years and could therefore itself contribute financially to G2, so H1 A/S’s plan to ensure the necessary flexibility for G2 to invest in development did not appear to be sufficiently justified.

F. Tax Avoidance Purpose

Based on the above, the Tax Authority concluded that the transfer of shares in G2 had no real business justification and purpose, and for the acquiring companies, the shares in the 2014 income year were subject to such significant restrictions on disposal that they realistically had no forms of ownership powers over the shares in G2, and the purpose was assessed to be a tax arrangement where the possibility of deducting interest expenses could be utilised in later taxable income years without corresponding taxation.

G. Supporting Factors for Tax Avoidance Finding

The buyers’ financing of H1 A/S’s shares in G2 occurred by H1 A/S granting the buyers a loan, meaning that H1 A/S did not receive any form of payment from the buyers, and the loan agreement stated that no payment of interest should occur, but that accrued interest should only be added to the principal, and as of 31 December 2016, no repayment of either interest or the loan appeared to have occurred, meaning the arrangement was completely without liquidity impact/risk for the buyers.

The arrangement only came about as a result of the family ties in the group of people behind the H2 A/S group, and this applied to both the first transfer of shares in G2 to H4 ApS, H5 ApS, and H3 ApS, and these companies’ subsequent transfer to H8 ApS, as the shares were pledged to F1-Bank and could not be sold outside the H family.

H. Application of Supreme Court Precedent

The Tax Authority argued that due to the mutual connection of the agreement complex and the acquirers’ lack of ability to sell the shares in G2 in income year 2014, the loans are effectively non-callable, and the Supreme Court in SKM2009.168.HR stated that based on the temporal and substantive mutual connection between the transactions, it was a pre-determined, closed agreement complex, whose course and settlement were agreed between parties who did not have conflicting tax interests.

The Tax Authority found that the arrangement, which was without risks for the parties involved, was not commercially justified but was established solely with a view to implementing tax exploitation, applying the same premises as in SKM2010.123.HR.

The Supreme Court in SKM2014.422.HR addressed commercial justification and economic risk, stating that currency forward transactions without significant economic risk and commercial justification, whose sole purpose was to create a deductible loss, could not be considered real losses but must be considered losses constructed solely with a view to obtaining a deductible loss.

I. Tax Authority’s Conclusion

After an overall comprehensive assessment, the Tax Authority found that the interest payment does not cover any economic reality, but is instead merely an expression of accounting constructions, and thus lacks reality in tax terms, and therefore decided that the transfer of shares in G2 is not given any tax effect, and consequently H1 A/S should not include the interest from the loan as income, as the interest amount should not be recognised as income under Section 4, letter e of the State Tax Act.

III. Taxpayer’s Position and Arguments

A. Main Claim

The company’s representative submitted a claim that the share transfer with associated loan agreement should be recognised for tax purposes, as the transfer is justified by ordinary commercial considerations and not by the desire to obtain any tax advantage.

B. Challenge to Tax Advantage Claim

Symmetry in Tax Treatment

The taxpayer argued that with the addition of interest on the loan, tax losses are used in H1 A/S, and correspondingly the interest expenses can be deducted in the three debtor companies, but this is in no way an expression of tax exploitation, as there is full symmetry in taxation and deduction, and the transaction does not involve obtaining tax advantages through the creation of deductible expenses that are not taxed.

No Liquidity Advantage

The taxpayer noted that the interest expenses have not been deducted in positive income in the debtor companies, but in these companies have only resulted in an increase in tax losses, and thus no tax-liquidity advantages have been obtained by the transaction.

Future Loss Utilisation

The taxpayer argued that there is nothing to suggest that it should be easier and more likely in the future that the tax losses can be used by the debtor companies rather than by H1 A/S, as the latter company has significantly higher equity and a larger tax result than the purchasing companies, and the tax loss in H1 A/S was fully used in income year 2017, after which H1 A/S is effectively tax-paying, whilst tax losses continue to accumulate in the three debtor companies.

No Proven Tax Advantage

Overall, the taxpayer argued that it is not proven that any tax advantage has been obtained, as tax losses at the creditor company are used to offset interest income and increased tax losses arise at the debtor companies, and the Supreme Court practice cited by the Tax Authority is entirely irrelevant to this case, as no demonstrable tax advantage is obtained.

C. Business Justifications

Media Attention Reduction

The taxpayer argued that H1 A/S was previously part of a group which owned various trademarks, and after the sale of the trademarks there has been relatively significant media attention on H1 A/S, which after the sale continued production, and various media in Denmark have had focus on the development in the joint venture company, resulting in considerable negative coverage of the H group and H1 A/S, and the transfer to more anonymous companies should be seen in light of a desire for reduced media attention.

Accounting Principles Applied

The taxpayer explained that in the H2 A/S group, the “equity method” was used in 2014 as the valuation principle for subsidiary shares, whilst in the purchasing companies and in H8 ApS, “cost” is used as the principle for valuation of subsidiaries, and thus under the new ownership structure, significant annual value adjustments are avoided, for example as a result of fluctuations in exchange rates.

Business Focus

The taxpayer argued that in the H group, there are two “legs”, one under H2 A/S where large investments have been placed, and another under directly owned companies where other more marginal investments are placed, and in the H2 A/S “leg,” there was significant focus on H11 A/S in 2013, and it was therefore found inappropriate in this part of the group to also have to focus on G2.

D. Reasons for Appeal

The taxpayer considered it very inconvenient going forward that the ownership of the shares in G2 in Denmark for tax purposes is considered to be placed with H1 A/S and not with H8 ApS, as this will deviate from the civil law ownership, and in the event of a distribution of dividends or a sale, it could give rise to complications, and could also give rise to problems if ownership differs from what is recognised by the foreign tax authorities.

The taxpayer did not consider it “proper” and acceptable that the Tax Authority should be able to disregard a commercially justified and civilly valid transfer with reference to the existence of a tax exploitation transaction, which cannot be identified in any way.

E. Additional Arguments on Tax Impact

The taxpayer emphasised that the transactions have actually resulted in increased tax payment, as they have resulted in a tax payment of DKK 9,738,989 by the end of 2023, corresponding to an increased tax base of DKK 44,268,132, compared to if the transactions had not been carried out.

The taxpayer emphasised that in view of the capital and income conditions in the H4 ApS taxation group, it is significantly more difficult to utilise the loss in that group, and it will take a number of years, e.g., 10 to 20 years, before the loss of approximately DKK 77 million is utilised, and the transactions have resulted in a huge periodic shift, and it is a disadvantage to pay the tax now rather than later, so overall the transactions have resulted in a tax disadvantage for the group.

IV. Tax Appeals Board’s Decision

A. Legal Framework

The Tax Appeals Board stated that when calculating taxable income, interest expenses are deductible pursuant to statsskattelovens § 6, subsection 1, letter e, and as a condition for interest deduction, the debtor must have assumed a real economic risk, according to the Supreme Court judgment of 25 February 2009, published in SKM2009.168.HR, and for the creditor, interest is included in taxable income as part of the creditor’s total annual income, according to statsskattelovens § 4, letter e.

B. Key Findings

Restricted Ownership Rights

The Tax Appeals Board found that both H5 ApS, H4 ApS and H3 ApS in the first transfer and H8 ApS in the second transfer as buyers of the shares in the foreign company had to respect that the shares were pledged to F1-Bank as security for H1 A/S’s obligations to the bank, and the buyer companies thus did not obtain customary ownership powers over the shares that they acquired for a purchase price in the order of DKK 100 million.

Lack of Economic Capacity

According to the available annual reports for the four buyer companies, the Tax Appeals Board found it obvious that none of these had the economy to acquire the shares for such a purchase price settled by a debt obligation, let alone to pay interest on such a debt obligation, and H1 A/S had no third-party security for payment of the significant receivable, which therefore in reality was worthless, and the maturity date was postponed by two supplements, most recently to 1 January 2024, that is more than 10 years after the promissory note’s issuance.

Non-Commercial Character

On this basis, the Tax Appeals Board found that the two transfers of the shares in the foreign company, the issuance of the promissory note and the subsequent change of debtor to H8 ApS undoubtedly did not have the character of customary commercial dispositions, and the dispositions could only be carried out because the companies, as a result of the overlapping ownership circle, did not have opposing economic interests.

Artificial Income Placement

The Tax Appeals Board found that the buyer companies’ assumption of the significant debt obligation was unrealistic and therefore did not entail a real economic risk, but through the calculated interest, which as a result of the tax losses in the company did not come to taxation in H1 A/S, was an expression of the related companies’ desire to place a tax deduction in the buyer companies that could be utilised in later income years, and recognition of the promissory note for tax purposes would be an expression of a clearly arbitrary placement of taxable income in the involved companies.

C. Tax Treatment Decision

Under these circumstances, the Tax Appeals Board concluded that the loan cannot be attributed tax significance, and the amount calculated as interest for the income year 2014 of DKK 6,462,734 cannot therefore be considered as interest income that, pursuant to statsskattelovens § 4, letter e, must be included in H1 A/S’s taxable income.

D. Rejection of Taxpayer’s Arguments

The Tax Appeals Board stated that what the representative has stated about the background for the transfer being to reduce media attention around H1 A/S, accounting principles and commercial focus – which has not been further illuminated by objective documentation in the form of decision minutes or similar – cannot lead to a different result, and the same applies to the circumstance that the four buyer companies, as a result of the tax losses in the companies, could not utilise the interest deduction for the income year 2014.

E. Final Decision

Accordingly, the Tax Appeals Board upheld the Tax Authority’s decision.

V. Key Transfer Pricing and Tax Issues

A. Substance Over Form Doctrine

This decision represents a robust application of the substance-over-form doctrine in Danish tax law. The Tax Appeals Board looked beyond the legal form of the transactions to examine their economic reality. Despite the existence of formally valid share transfer agreements and loan documentation, the tribunal found that the transactions lacked genuine commercial substance.

Key Principle: The Tax Appeals Board determined that the dispositions could only be carried out because the companies, as a result of the overlapping ownership circle, did not have opposing economic interests, and the buyer companies’ assumption of the significant debt obligation was unrealistic and did not entail a real economic risk.

B. Real Economic Risk Requirement

The decision reinforces the principle established in SKM2009.168.HR that for interest deductions to be recognised, the debtor must have assumed a real economic risk.

Application: The Tax Appeals Board found it obvious that none of the buyer companies had the economy to acquire the shares for a purchase price of DKK 100 million settled by a debt obligation, let alone to pay interest on such a debt obligation, and H1 A/S had no third-party security for payment of the significant receivable, which therefore in reality was worthless.

C. Closed Agreement Complex

The concept of a “closed agreement complex” (lukket aftalesæt) was central to the Tax Authority’s analysis and the Tax Appeals Board’s decision.

Characteristics Identified:

• Temporal and substantive mutual connection between the transactions
• Coincidence in identity between the companies and persons involved
• Pre-determined course and settlement agreed between parties who did not have conflicting tax interests

D. Restrictions on Ownership Rights

The pledge to F1-Bank created significant restrictions on the buyer companies’ ability to exercise normal ownership rights.

Impact: The buyer companies had to respect that the shares were pledged to F1-Bank as security for H1 A/S’s obligations to the bank, and thus did not obtain customary ownership powers over the shares.

E. Arbitrary Income Placement

The Tax Appeals Board identified the arrangement as an attempt to arbitrarily place taxable income and deductions amongst related companies.

Finding: Recognition of the promissory note for tax purposes would be an expression of a clearly arbitrary placement of taxable income in the involved companies for the income year 2014.

F. Rejection of Tax Symmetry Argument

The taxpayer’s argument that there was full symmetry in taxation (interest income taxed at H1 A/S and interest expense deducted at buyer companies) was rejected.

Tribunal’s View: The Tax Appeals Board found that whilst there may be formal symmetry, the arrangement lacked economic reality and was designed to convert special losses (usable only by H1 A/S) into joint taxation losses (usable by the H4 ApS taxation group).

G. Business Purpose Defence Rejected

The taxpayer’s claimed business justifications were found insufficient.

Reasons for Rejection:

• The stated reasons (reducing media attention, accounting principles, commercial focus) were not further illuminated by objective documentation in the form of decision minutes or similar
• The Tax Authority found that given the H family remained the ultimate owners regardless of intermediate companies’ ownership, the argument about reduction of media attention seemed to lack real content

VI. Actionable Insights for Practitioners

1. Document Business Rationale Thoroughly

Lesson: The transfer of shares against establishment of a loan agreement was a shareholder decision that the board was not involved in, and there are no board meeting minutes or other written material that can show what considerations there were around the sales.

Recommendation: Ensure all significant transactions are properly documented with board minutes, business cases, and contemporaneous evidence of commercial rationale. The absence of such documentation will be viewed negatively by tax authorities.

2. Ensure Economic Capacity of Transaction Parties

Lesson: The buyer companies had no income from commercial activities and minimal equity, yet were acquiring shares for DKK 100 million.

Recommendation: When structuring related-party transactions, ensure that the acquiring entities have realistic financial capacity to assume the obligations. Consider whether third-party lenders would provide financing on similar terms.

3. Avoid Restrictions That Negate Ownership Rights

Lesson: The pledge to F1-Bank meant buyer companies did not obtain customary ownership powers over the shares.

Recommendation: If shares are subject to pledges or other restrictions, consider whether the transfer should be delayed until such restrictions are removed, or ensure that the buyer has meaningful ownership rights despite the restrictions.

4. Ensure Real Economic Risk

Lesson: H1 A/S had no third-party security for payment of the significant receivable, which therefore in reality was worthless.

Recommendation: Structure loan arrangements with appropriate security, realistic repayment terms, and evidence that the debtor has assumed genuine economic risk. Consider whether interest should actually be paid rather than capitalised indefinitely.

5. Avoid Artificial Income Placement

Lesson: The arrangement was an expression of the related companies’ desire to place a tax deduction in the buyer companies that could be utilised in later income years.

Recommendation: Ensure that the allocation of income and deductions amongst group companies reflects genuine economic activity and is not driven primarily by tax considerations.

6. Be Cautious with Loss Conversion Strategies

Lesson: The Tax Authority found that the arrangement achieved conversion of special losses (usable only by H1 A/S) into joint taxation losses through the interest income/expense mechanism.

Recommendation: Strategies that appear designed to convert one type of tax attribute into another more favourable type will face heightened scrutiny. Ensure there is genuine commercial substance beyond the tax benefit.

7. Tax Symmetry Alone Is Insufficient

Lesson: The taxpayer’s argument that there was full symmetry between interest deduction and taxation of interest income was rejected.

Recommendation: Do not rely solely on the argument that a transaction is tax-neutral because income and deductions offset. Tax authorities will look at the broader context, including timing differences, loss utilisation, and whether the arrangement has economic substance.

8. Consider Timing and Liquidity Impact

Lesson: The loan agreement stated that no payment of interest should occur, but that accrued interest should only be added to the principal, meaning the arrangement was completely without liquidity impact/risk for the buyers.

Recommendation: Ensure that loan arrangements involve actual cash flows where commercially appropriate. Indefinite capitalisation of interest without any prospect of payment will be viewed as evidence of lack of economic substance.

9. Maturity Extensions Raise Red Flags

Lesson: The maturity date was postponed by two supplements, most recently to 1 January 2024, that is more than 10 years after the promissory note’s issuance.

Recommendation: Multiple extensions of loan maturity dates, particularly when the debtor has no realistic ability to repay, will be viewed as evidence that the loan lacks economic reality.

10. Related Party Context Increases Scrutiny

Lesson: The dispositions could only be carried out because the companies, as a result of the overlapping ownership circle, did not have opposing economic interests.

Recommendation: Transactions amongst related parties will face heightened scrutiny. Ensure that terms are at arm’s length and that there are genuine commercial reasons for the structure adopted.

11. Supreme Court Precedents on Tax Avoidance

The Tax Authority and Tax Appeals Board relied heavily on Supreme Court precedents, particularly:

• 168.HR on closed agreement complexes
• 123.HR on arrangements without commercial justification
• 422.HR on transactions without significant economic risk

Recommendation: Practitioners should be familiar with these precedents and ensure that proposed structures can be distinguished on their facts.

12. Subsequent Events May Not Cure Initial Defects

Lesson: The refinancing in October 2015 that removed the pledge restrictions occurred after the relevant tax year 2014.

Recommendation: Tax treatment is generally determined based on the facts and circumstances at the time of the transaction. Subsequent events that cure defects may not be relevant for earlier tax years.

VII. Conclusion

This decision provides important guidance on the limits of tax planning within family-controlled corporate groups. The Tax Appeals Board’s analysis demonstrates that Danish tax authorities will look beyond legal form to examine economic substance, particularly where:

1. Transaction parties lack economic capacity to fulfil their obligations
2. Ownership rights are significantly restricted
3. Arrangements lack liquidity impact or genuine economic risk
4. The primary purpose appears to be tax-motivated income placement
5. Business justifications are poorly documented or lack credibility

For practitioners, the key takeaway is that related-party restructurings must have genuine commercial substance, be properly documented, and involve parties with realistic economic capacity. Tax symmetry and formal legal validity are insufficient where the overall arrangement lacks economic reality.

The decision reinforces that Danish tax law, through application of substance-over-form principles and the requirement for real economic risk, will disregard arrangements that are primarily tax-motivated, even where they result in symmetrical tax treatment across the group.