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Oslo City Court repeals decision on exit taxation

On the 9th of October 2013 Oslo City Court passed a judgment in the case between Extra Film AS and the State. Extra Film AS is a company within the Spector Photo Group Corporation.

The judgment reviewed the decision passed by the Norwegian tribunal for tax appeals, which had determined that the company had emigrated from Norway to Sweden in 2002. The Tax Authority had levied exit tax on Extra Film AS as if the company’s assets and goodwill were sold, in addition to a penalty tax of 60 % of the increase of income.    

The decision from the Norwegian tribunal for tax appeals based the assessment on the general rules in the General Tax Act §§ 5-1 and 5-30, cf. § 9-2. The Court held that these rules did not give sufficient authorization and there were no legal basis for the assessment. The Court did in particular emphasize that a Statement from the Ministry of Finance (Utv. 1998 s. 848) did not qualify as an authority. 

The Oslo City Court review further whether the decision could be upheld based on the unwritten general-anti-avoidance-rule. The Norwegian tribunal for tax appeals had decided that the company was in breach with an obligation to liquidate, and therefore subject to tax. The Court stated that Extra Film AS did not have any obligation to liquidate the company, and that the tribunal had based their decision on an incorrect understanding of the law. 

Based on the above, the Court did not need to review if the levied tax were a restriction on the right of free establishment within the EEA-area.   

The case was litigated by the lawyers Rune Tjomsås Andersen and Atle E. Lunder. 

Competence

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