Just Eat describes itself as a ‘global hybrid marketplace for online food delivery’. Inevitably, that means tax disputes arise and the firm’s H1 2019 results show a provision of £20.8m for uncertain tax items. Within that provision is a sum held in relation to an ongoing transfer pricing audit in Denmark. The Danish tax authorities are making a tax claim against the company totalling £126m. Needless to say, Just Eat ‘strongly disagree with the claim made by the Danish Tax Authorities and have appealed the assessment through a Mutual Agreement Procedure (MAP) between the UK and Danish Competent Authorities’.

In 2012, Just Eat’s transfer pricing arrangements were updated, in-line with the OECD Transfer Pricing Guidelines. An Advanced Pricing Agreement (APA) 20 was submitted to the Danish and UK Competent Authorities to obtain certainty over the position taken. The Danish Tax Authorities subsequently opened a local transfer pricing audit into the periods covered by the APA and in January 2018 issued a formal notice of assessment from their findings, making a claim that the taxable income for financial year 2013 should be increased, equalling an additional tax payment of £126 million, including interest and surcharges. The case was formally accepted into the MAP in April 2018.

The firm expects the potential double taxation to be eliminated but with a reallocation of income between the UK and Denmark with different tax rates applying over different time periods and net interest charges.

The company’s future tax charge will be affected by various factors including: The timing of the recognition of tax losses; changes in the mix of business profits; local or international tax reform (for example any arising from the implementation of the OECD’s BEPS actions and European Union state aid investigations); new challenges by the tax authorities or the resolution of ongoing enquiries raised by tax authorities; and the impact of any acquisitions, disposals or restructurings.

That latter point has specific bearing – on 5 August 2019, Just Eat announced it had reached agreement on terms of a recommended all-share combination with Dutch group Takeaway.com NV.

Just Eat Shareholders will be entitled to receive 0.09744 New Takeaway.com shares in exchange for each Just Eat share. Immediately following completion of the Combination, Just Eat Shareholders will own approximately 52.15% and Takeaway.com Shareholders will own approximately 47.85% of the share capital of the combined group.