Norway - Budget proposals to comply with BEPS action plan 

October 25: Norway's 2014 budget (presented earlier this month) would limit intra-group interest expense deductions to an amount that is 30% of taxable ordinary income, as adjusted for the value of tax depreciation and net interest expenses for tax purposes—i.e., a value that would approximate earnings before interest, taxes, depreciation and amortization (EBITDA).

Hence, the calculation of the maximum deduction would be 30% of the taxable EBITDA (increased from the 25% limitation contained in the initial proposal in April 2013).

Read TaxNewsFlash-Transfer Pricing: Norway - Limiting interest deductions on intra-group loans, guarantees

In addition, the Norwegian 2014 budget proposes to increase the carryforward period to 10 years (from the five-year period contained in the Finance Minister’s initial proposal (April 2013)). The proposal would also apply for interest expense costs on certain short-term loans (such as cash-pool arrangements).

These measures are proposed to be effective 1 January 2014, and would implement certain action steps contained in the OECD base erosion and profit shifting (BEPS) initiative.

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