Ørsted has received the final outcome of a tax case concerning its Walney Extension and Hornsea 1 offshore wind farms in the UK.

The Danish Tax Agency (DTA) and UK HM Revenue & Customs (HMRC) informed Ørsted of the conclusion reached by a commission convened under the EU Arbitration Convention.

The commission found that Walney Extension and Hornsea 1 have a genuine legal and economic basis. Its opinion places the main taxation rights with the UK, where the offshore wind farms are located and generate electricity and revenue during their operating lives.

Ørsted first raised the taxation issue with the DTA and HMRC in 2015 to clarify how taxing rights should be divided between Denmark and the UK and to address potential double taxation.

The two authorities were unable to agree on the matter. The case was therefore referred to the advisory commission in 2023.

The opinion will slightly increase Ørsted’s tax position in Denmark and result in related interest. The company said the amount is covered by provisions already made for uncertain tax positions.

Over time, tax reductions in the UK will largely offset the additional Danish tax charge.

Ørsted will now discuss other projects with the DTA where similar administrative decisions or draft assessments have been issued. The company expects those cases to be handled according to the same legal principles applied in the commission’s opinion.

The company also plans to discuss with HMRC how the opinion will be implemented.