The Swedish Administrative Court of Appeal in the case of: Gothenburg (Kammarrätten i Göteborg) case number 2276-15, has found a German company to have a permanent establishment (PE) in Sweden due to its annually recurring short-term activities in the winter environment in northern Sweden. Although the six-month threshold was not passed in any of the years in question, the recurring activities were considered sufficient to constitute a fixed place of business.
The conclusions of the Court were that the company regularly conducts business from the same place in Sweden. The Court also stated that the tests in Sweden cannot be considered to be of a preparatory or auxiliary nature, therefore the company had established a fixed place of business in Sweden through which a part of the company’s core business was carried out. The time to appeal expired at the end of December 2016. The decision has not been appealed to the Supreme Administrative Court and the ACA’s decision is consequently final.
This decision confirms the strict interpretation of the Swedish Tax Agency and Swedish Courts when it comes to PE assessments in general and the exemption for preparatory and auxiliary activities in specific. However, this decision distresses many companies carrying on the same or similar activities in northern Sweden.