New Tax Rules on Cross-Border Mergers and Demergers in Norway and Their Compatibility with the EEA Agreement

Abstract

In this article the author provides an overview of the new Norwegian tax rules for cross-border restructurings and comments on the compatibility of the new rules with the fundamental freedoms in the agreement of the European Economic Area. It is submitted that certain aspects of the new rules may create an unjustified restriction on the right of establishment and the free movement of capital. In particular this may apply to the exclusion of triangular mergers and demergers from the scope of application of the new rules, the termination of the right to utilize previous tax losses after the merger or demerger (in certain situations), the tax treatment applicable to inventory and intangibles taken out of the Norwegian tax jurisdiction and the introduction of the wholly artificial requirement as a measure to prevent tax abuse for cross-border mergers and demergers.