Norway Consults On Interest Limitation Rules
Norway’s Ministry of Finance has released a consultation on a proposal to further strengthen the nation’s restrictions on interest deductions within groups.
The regime, introduced in 2014, is intended to prevent groups from establishing subsidiaries in lower tax territories from which to lend capital to companies in a higher tax state, such as Norway, and thereby generate interest deductions to mitigate tax liability.
The latest change is intended to extend the rules that limit interest deductibility where an independent lender is engaged to act as an intermediary. It also doubles the threshold for the application of the rules.
Under the regime, deductions for interest paid between related parties is capped at 25 percent of earnings before interest, tax, depreciation, and amortization.
