Ørsted Receives Final Tax Ruling on Walney Extension and Hornsea 1

Ørsted has been notified by the Danish Tax Agency and UK HM Revenue & Customs that an advisory commission established under the EU Arbitration Convention has issued a final opinion in a taxation rights dispute between Denmark and the UK concerning the Walney Extension and Hornsea 1 offshore wind farms. The opinion finds both projects have a genuine legal and economic purpose and are therefore primarily taxable in the UK, where they are located, over the projects' operating lifetime as they generate power and revenue.

 

The case dates back to 2015, when Ørsted asked the Danish Tax Agency and HMRC to clarify taxation rights between the two countries to avoid double taxation of its offshore wind farms. After the two tax authorities failed to reach agreement, the case was referred to the advisory commission in 2023. Ørsted said it is satisfied with the outcome, describing it as consistent with the company's understanding of international tax regulations as applied to the offshore wind industry.

 

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The opinion entails a minor upward adjustment to Ørsted's overall tax position in Denmark, along with related interest, though the company said this adjustment is fully contained within its existing provisions for uncertain tax positions and will, over time, be largely offset by tax reductions in the UK.

 

Based on the opinion, Ørsted will enter into dialogue with the Danish Tax Agency to resolve other projects where similar administrative decisions or draft assessments have been made, and expects any resolution to follow the same legal principles established in this opinion. The company will similarly engage with HMRC regarding the opinion's application.

 

Source: Ørsted