All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Norway: Interest deductibility changes



Rolf Saastad

Ingrid Anne Kinden

On 8 November, the new Norwegian government presented the final proposal for legislation that would limit the tax deduction of interest on related party debt. The proposed rule is designed to restrict earnings stripping via intercompany debt financing in Norway. The main features of the proposed limit on the deduction of interest on related party debt are as follows:

  • Net interest expense paid to a related party will not be deductible in a year to the extent the expense exceeds 30% of earnings before interest, tax depreciation and amortisation (EBITDA), subject to certain adjustments;

  • The limit will be calculated separately on an entity-by-entity basis, so no consolidated group approach will be available;

  • The threshold for the limitation to apply will be set at NOK 5 million;

  • Net interest expense in excess of the limitation will be available for a 10 year carry-forward, provided the expense falls within the 30% limitation for those years;

  • External debt for which a related party provided security will be considered internal debt and, therefore, will fall within the scope of the rules;

  • Tax losses carried forward and group contributions will not be deductible if the tax base before the limitation for deducting net interest expense is negative or zero. If an interest deduction is disallowed, the taxpayer can thus have a positive tax base and tax payable even though it has tax losses carried forward; and

  • The new legislation will apply from fiscal year 2014.

The proposed legislation is expected to be approved by the parliament without further changes.

Because the measures will apply to both Norwegian and cross-border groups, they may create challenges and require certain groups to undergo reorganisation.

Rolf Saastad ( and Ingrid Anne Kinden (


Tel: +47 23 27 98 36


more across site & bottom lb ros

More from across our site

The Italian government published plans to levy capital gains tax on cryptocurrency transactions, while Brazil and the UK signed a new tax treaty.
Multinational companies fear the scrutiny of aggressive tax audits may be overstepping the mark on transfer pricing methodology.
Standardisation and outsourcing are two possible solutions amid increasing regulations and scrutiny on transfer pricing, say sources.
Inaugural awards announces winners
The UN’s decision to seek a leadership role in global tax policy could be a crucial turning point but won’t be the end of the OECD, say tax experts.
The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.