Ørsted has lost a long-running tax case in the UK, where the energy company has otherwise fought to be successful in its claim for tax deductions. The company also states that the ruling is not expected to have a significant impact on its financial statements. This is reported by MarketWire.
The case concerns deductions for expenses for surveys in connection with several British offshore wind projects, including Gunfleet Sand 1 and 2 as well as Walney and West of Duddon Sands. After a number of decisions in various instances, which have been in favor of both Ørsted and the British tax authorities, the British Supreme Court has now finally ruled in favor of the tax authorities.
However, the British Supreme Court assesses that the expenses do not have a sufficiently close connection to the actual construction of the facilities to give the right to tax deductions. The court emphasizes a narrow interpretation of the rules, which requires a direct link between the expense and the specific facility, according to a announcement from the British Supreme Court.
"We respect the decision of the British Supreme Court and will now do what is necessary to reach a final agreement with the British authorities for the projects covered by the decision," writes Ørsted's press department in an email response to the company's reaction to the ruling.
Ørsted estimates that the financial impact will be limited, but at the same time points out that the ruling may have broader consequences for the industry.
According to Ørsted, energy companies may find it more difficult to obtain tax deductions in the future as a result of the ruling, which may make new offshore wind projects more expensive to build. The company therefore states that it will enter into a dialogue with the British authorities on how the decision will be implemented in practice before the full consequences can be assessed. It also calls on the British government to review tax legislation in this area.
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