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Norway’s Finance Minister sets out BEPS response

Norway’s Finance Minister sets out BEPS response

OSLO: Norwegian Finance Minister Siv Jensen has briefed the country’s Parliament on the steps taken by the Government to address base erosion and profit shifting.

In her letter submitted to the Parliament on May 4, 2016, Jensen said that Norway has been actively participating in the BEPS project. She added that the Government has submitted to Parliament its preliminary assessment of some of the recommendations included in the BEPS Action Plan.

Jensen pointed out in her letter that the measures proposed under BEPS Actions 1, 5, and 8-10 are not particularly relevant in the Norwegian context. She said that Norway’s controlled foreign corporations (NOKUS) regime is comparatively more stringent than those in other countries, but wrote that the Government is seeking to revisit the rules and will soon launch a consultation in this regard.

Jensen highlighted that the Government adopted an anti-hybrid rule in Budget 2016. Further, the Budget tightened the thin capitalization regime to limit interest deductions for interest paid to related parties from 30 percent to 25 percent of earnings before interest, taxes, depreciation, and amortization.

Jensen however wrote that the Government is considering whether to adopt additional measures proposed under BEPS Action 2; and is examining the BEPS Action 4 recommendations on notional interest deductions rules.

So far as the OECD’s recommendations under BEPS Action 13 (transfer pricing documentation and country-by-country reporting) are concerned, Jensen said that the Government will submit before the Parliament this month draft regulations requiring country-by-country reporting by multinational corporations.

According to the Minister, the Government is also considering the relevance for Norway of proposals contained in the European Commission’s Anti Tax Avoidance Package, which was released in January 2016.