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Newsletter - The Solberg Government makes small adjustments in the proposal on new rules limiting deduction of net interest expenses paid to related parties

The newly elected Solberg Government today announced their amendments to the National Budget 2014, formerly presented by the previous Stoltenberg II Government on October 14 2013. The proposal mainly maintains the former government’s proposal on new rules limiting tax deductions in the corporate tax base for interest expenses to related parties.

According to the proposal, deductions for intra-group interest expenses will be disallowed if total net interest expenses exceed 30 pct. of an adjusted taxable income. Only net intra-group interest expenses will be disallowed. However, interest paid to unrelated lenders is included when calculating the interest deduction limit.

The new Government do adjusts the proposal somewhat, by proposing to increase the threshold for the limitation to be applicable from interest expenses of NOK 3 million to NOK 5 million.

The new rules limiting interest deductions on intra group loans is proposed to take effect from 1. January 2014.

For a more detailed résumé of the proposal we refer to our comments on the original draft proposal released on 11. April this year, available here.

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