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Internal Market: Norway must change rules on tax deduction rights on mortgage loans



Norway is in breach of the EEA Agreement by excluding deduction rights on mortgage loans in Germany, Belgium, Italy, Malta, Bulgaria and Portugal. This is the conclusion of a reasoned opinion delivered by the EFTA Surveillance Authority today.

According to Norwegian tax rules, it is only possible to deduct interest expenses on mortgage loans if the property is located in Norway or in an EEA State where Norway has the right to tax the property. The Authority considers those rules to be a restriction on the free movement of capital since it makes investment in real estate less attractive in the six EEA States excluded from the tax advantage.

Norway has claimed that the restriction can be justified by the need to ensure the coherence of the Norwegian tax system and the allocation between the EEA States of taxing powers. The Authority disagrees with Norway on this point since there is no direct link between the deduction right and the actual taxing of the real estate. 

The Authority is also of the opinion that the risk of double deductions or tax evasion can be addressed by making use of other less restrictive measures. Norway has concluded tax agreements with all the EEA States providing for an administrative assistance on the exchange of information.

A reasoned opinion is the second stage of the infringement procedure. The Authority can bring the matter before the EFTA Court if the State fails to comply with the reasoned opinion within two months.


For further information, please contact:

Mr. Trygve Mellvang-Berg
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187






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