On 10 September 2026, Danish offshore wind giant Ørsted received a long-awaited notice: the Advisory Commission established under the EU Arbitration Convention has issued its final opinion on the tax jurisdiction dispute between Denmark and the UK over the Walney Extension and Hornsea 1 offshore wind farms.

The ruling aligns with Ørsted’s long-standing position: the two wind farms serve genuine legal and economic purposes, and therefore should primarily be taxed in the UK – the country where the projects are located – with tax payable as electricity is generated and revenue is earned over the projects’ full lifecycle.

The dispute dates back to 2015, when Ørsted voluntarily approached the Danish Tax Agency (DTA) and HM Revenue & Customs (HMRC) to seek clarification on cross-border tax jurisdiction, with a clear objective: to avoid double taxation of its offshore wind farms.

However, the Danish and UK tax authorities never reached an agreement. The case was referred to the Advisory Commission under the EU Arbitration Convention in 2023, and after three years of proceedings, the final opinion was delivered in September 2026.

The two wind farms in question are both landmark UK offshore wind projects: the 660 MW Walney Extension, located in the Irish Sea, and the 1.2 GW Hornsea 1, which was once the world’s largest offshore wind farm.

The significance of the ruling extends far beyond the Walney Extension and Hornsea 1 projects themselves.

For Ørsted, first and foremost, it removes years of lingering tax uncertainty. The company has stated clearly that it will enter into dialogue with the DTA based on the legal principles set out in this ruling, seeking resolutions for other projects subject to similar administrative decisions or draft assessments. Ørsted expects these projects to be handled in line with the same legal principles, and will also discuss the application of the ruling with HMRC.

For the wider offshore wind industry, the ruling establishes an important legal principle: cross-border offshore wind projects with genuine legal and economic purposes should primarily be taxed in the country where the projects are located. This principle provides a reference point for tax certainty for other developers with offshore wind assets across multiple countries, helping to reduce the risk of double taxation in cross-border investments.

Taking a broader view, the offshore wind sector is shifting from a scale expansion phase of rapid asset build-out to a stock management phase of refined operation. In this stage, tax structure design, cross-border tax coordination and policy compliance capabilities are becoming key variables that determine the final rate of return on projects.