In April 2025, the Norwegian Court of Appeal issued a significant ruling in the case Norway v. DHL Global Forwarding (Norway) AS (Case No. LB-2024-100530), focusing on the tax deductibility of payments for intra-group services.
Background to the case
DHL Global Forwarding (Norway) AS, a Norwegian subsidiary of the multinational logistics company DHL, made payments to other entities within the group for administrative and management services. The Norwegian Tax Authority questioned the deductibility of these payments, arguing that it had not been adequately demonstrated that the services had been provided and that the costs corresponded to market prices.
Court’s decision
The Court of Appeal held that, for payments for intra-group services to be deductible, the company must provide clear evidence of:
- The actual provision of the services.
- The business necessity of those services.
- The costs being in line with the arm’s length principle.
In this case, the court found that DHL had not met these requirements, and therefore the payments were not tax deductible.
Implications for multinational companies
This ruling highlights the importance of:
- Documenting intragroup services in detail.
- Justifying the business necessity and benefit of such services.
- Ensuring that costs are aligned with the arm’s length principle.
Multinational companies should review and strengthen their transfer pricing policies and documentation to avoid adverse tax adjustments.
Do you need advice on transfer pricing?
At TPC Group, we have experts who can help you evaluate and improve your transfer pricing policies.
Source: TPCases