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State Aid

PR(07)61: The Authority opens the formal investigation procedure with regard to tax deductions for certain cooperative societies in Norway


Today, the Authority has decided to open the formal investigation procedure concerning a Norwegian proposal to introduce a special tax deduction for certain cooperative societies.

According to the proposed scheme, certain cooperatives within the agriculture, forestry and fisheries sectors as well as cooperative building societies and consumer cooperatives will be entitled to deduct allocations to equity capital from their income, thereby reducing the basis for the income tax. According to the Norwegian authorities, the aim of the scheme is to grant a fiscal advantage to the cooperatives on the basis that the cooperatives are considered to have a more difficult access to equity capital than other undertakings. In particular, cooperatives cannot, according to the Norwegian law on cooperatives, issue shares to the public or issue other capital certificates or securities.

The Norwegian authorities claim that the notified measure does not fall under the state aid rules of the EEA Agreement because the fiscal advantage only offsets the disadvantages concerning cooperative societies’ access to equity capital.

The Authority is in doubt whether the proposed scheme does not constitute state aid and if it is aid, the Authority doubts that it would be compatible with the EEA Agreement.

It should be noted that the agriculture and fisheries sectors to a large extent fall outside the scope of the state aid rules of the EEA Agreement. Hence, this Decision does not deal with cooperatives active in the agriculture and fisheries sectors to the extent that the activities of these cooperatives fall outside the scope of the state aid rules of the EEA Agreement.

A decision to open the formal investigation procedure is without prejudice to the final decision to be adopted by the Authority. The opening decision will be published in the EEA Section of the Official Journal of the European Union and the EEA Supplement thereto, inviting interested parties to comment within one month from the date of publication. The Authority will take its final decision after having reviewed comments from the Norwegian Government and from any other interested parties.    

For further information, please contact:

Mr. Per Andreas Bjørgan
Deputy Director, Legal and Executive Affairs
Tel. (+32)(0)2 286 18 36

19 December 2007

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