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PR(02)09: The EFTA Surveillance Authority clears the ”Snøhvit” (“Snow White”) case

16.9.2002

By decision today the Authority has decided not to raise objections to a special tax regime introduced for certain natural gas developments in the north of Norway and to be applied to the so-called Snøhvit project. The Snøhvit gas field is located off the very northernmost part of the Norwegian coast. Gas is to be landed onshore via pipeline, cooled down and liquefied for further transportation by ship to international markets.

Petroleum exploration in Norway is subject to a special tax regime. The applicable tax rate is 78 per cent compared to a normal corporate rate of 28 per cent. Under the Petroleum Tax Act normal depreciation period for tax deductible capital expenditures is six years. The Norwegian Government has proposed in a bill to Parliament that capital expenses for production facilities linked to large-scale plants for gas liquefaction and located in a specified region in the north of Norway, shall be able to benefit from a depreciation period of three years. Such a rule implies a deferral of tax payments and confer thus a benefit upon involved enterprises. The Snøhvit licensees will benefit from this tax provision.

The Norwegian Government has notified the arrangements to the Authority, which has concluded that the tax  advantages resulting from the accelerated depreciation regime is State aid in the meaning of the EEA Agreement. It has also concluded that the aid is compatible with the Agreement. The eligible area, where also Snøhvit is located, corresponds to a zone eligible for regional aid according to a Decision of the Authority in December 1999 to establish a regional aid map for Norway. The amount of aid relative to capital investments is well below maximal allowed aid ceilings. Against this background, the Authority has decided not to raise objections to the notified arrangements

For further information, please contact Mr. Amund Utne (tel.: 286.18.50) or Mr. Rolf Egil Tønnessen (tel.: 286.18.56).




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