Tax Treaty Case Law around the Globe 2022

S. 339Chapter 29: Norway: Whether the Norwegian/Domestic Tax Credit Rules Were in Conflict with Article 23 of the Tax Treaty – Case No: 19-083263TVI-THOD/1

Eivind Furuseth

29.1. Facts

Mowi ASA, formerly Marine Harvest ASA (hereinafter also referred to as taxpayer), claimed a foreign tax credit for withholding tax on interest income from Korea, Poland, Chile and Singapore for the fiscal year 2013. The tax authorities, however, denied the foreign tax credit. The question for the court was the calculation of maximum foreign tax credit in relation to the withholding taxes paid in these four countries.

Taxpayer had borrowed NOK 7.5 billion. NOK 1.5 billion of this had been on lent to subsidiaries outside Norway. The lending of NOK 1.5 billion to foreign subsidiaries generated interest income of NOK 91 million. The interest income from the foreign subsidiaries resulted in a total of NOK 12 million in withholding tax in the countries of the subsidiaries (Korea, Poland, Chile and Singapore).

Under section 16-20 et seq. of the Norwegian Tax Act (NTA), ordinary foreign tax credit rules apply. Hence, the Norwegian taxpayer may claim the foreign tax credit for the lower of (i) the withholding taxes act...