Tax treaty exemption from Norwegian CFC rules

Resource Information

The work Tax treaty exemption from Norwegian CFC rules represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Tax treaty exemption from Norwegian CFC rules

Creator

• Kuźniacki, B

Subject

• EEA
• double taxation relief
• exemption
• CFC
• passive income
• tax treaty
• fundamental freedoms

Language

eng

Summary

The Norwegian controlled foreign company (CFC) rules allow taxing income of the controlled foreign companies on ongoing basis in the hands of their Norwegian participants - unlike the ordinary taxation of interests in companies. This constitutes a disadvantage for companies resident in Norway which have a controlled company located in a low tax jurisdiction within or outside the European Economic Area (EEA). Such disadvantage hinders the exercise of the freedom of establishment by the Norwegian resident companies, dissuading them from establishing, acquiring or maintaining a subsidiary in a Member State in which the latter is subject to a lower level of taxation. It may also lead to infringement of other fundamental freedoms, such as the freedom to provide services and the free movement of capital. Furthermore, one of the fundamental principles in tax treaties is based on the OECD MTC, as these signed by Norway, is that each taxable company according to the tax laws of the Contracting State is treated as a separate taxpayer. The application of the CFC rules may intrigue this principle. In order to avoid that the CFC rules become inconsistent with the EEA law and tax treaties, the Norwegian legislator has introduced two exemptions from the application of the CFC rules in a tax treaty and EEA law situation. This article analyses the tax treaty exemption

Citation source

In: Skatterett. - Oslo. - (2014),

Geographic coverage

Europe

Language note

English