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Internal Market: Norwegian rules on interest deductibility are discriminatory

25.10.2016

PR(16)48 

EN  |   NO

The EFTA Surveillance Authority (ESA) concluded today that certain interest cap rules contained in the Norwegian Tax Act breach the EEA Agreement.

ESA is of the opinion that the interest cap rules are indirectly discriminatory because -although they apply to domestic groups and cross-border groups equally - they are unlikely to be applied to loans within a Norwegian group in practice. As a consequence, cross-border groups find themselves at a disadvantage. ESA is of the view that this amounts to an infringement of the freedom of establishment protected by the EEA Agreement.

ESA does not dispute that the Norwegian legislation pursues legitimate objectives aimed at maintaining the balanced allocation of taxing powers between EEA States and the prevention of tax avoidance and abuse. However, the Norwegian rules go beyond what is necessary to achieve this goal, since they are not limited to preventing only artificial arrangements created to avoid tax.

ESA sent a letter of formal notice to Norway on the matter in May 2016, and is today taking the next step in the infringement procedure by adopting a reasoned opinion. Finally, ESA may bring the matter before the EFTA Court if Norway fails to comply within two months.

For further information, please contact:

Anne Vestbakke
Head of Communications
tel. +32 2 286 18 66
mob. +32 490 57 63 59 




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