The principles of fiscal continuity apply to cross-border mergers and demergers in the same way as for purely domestic mergers and demergers.The tax exemption does not apply to other forms of compensation than shares of companies directly involved in the merger or demerger.
#TAX ACT 2011 FOR MAC FREE#
In conformity with the conditions for tax free mergers and demergers involving only Norwegian companies, the compensation given to the shareholders of the transferring company, other than shares of companies directly involved in the merger or demerger, must not exceed 20 percent of the total compensation given to the shareholders of the transferring company.The Companies Act and the Public Companies Act regulates cross border mergers and demergers within the EEA, in line with the Merger directive (Directive 2005/56/EC). The merger or demerger must take place within the regulation of the Companies Act or the Public Companies Act.The amendments are effective as from the income year of 2011.Īs explained in our letter of, the conditions for the tax exemption are as follows: The transferring company may opt for taxation of the merger/demerger, according to wish. Further, the merger or demerger will not entail taxation of unrealised capital gains on shares owned by shareholders of the transferring company. section 9-14 of the Tax Act).įollowing amendments of the Tax Act section 11-11, adopted on 10 June 2011, a cross-border merger or demerger, where the acquiring company is resident in another EEA state, will not entail taxation of unrealised capital gains on the transferring company’s assets or liabilities. Item V below concerns the issue of exit tax on single objects (cf. The issue of mergers between Norwegian AS/ASA and Norwegian SE-companies is not discussed further in this letter. However, in light of the fact that the Norwegian exit taxes for merging, demerging and relocating companies within the EEA have been abolished, it seems that the judgment does not affect the issue of compliance with the Authority’s reasoned opinion of 2 March 2011.Īs mentioned in our letter of, a Norwegian AS/ASA and a Norwegian SE-company may be merged without taxation within the framework of the Tax Act section 11-2 et seq. The judgment may have implications for the compatibility of exit taxes with EEA-agreement in general. On 29 November 2011 the European Court of Justice published its judgment in the case C-371/10 National Grid Indus. The amendments are discussed further under item II-IV below. In the view of the Ministry of Finance, the amendments in the Tax Act sections 10-37, 10-71, 11-11 and 14-48 means that the tax rules concerning companies and shareholders when companies are relocating, as well as the tax rules concerning companies and shareholders in connection with cross-border mergers and demergers, complies with the reasoned opinion of 2 March 2011. All of the proposed amendments were adopted by the Parliament and sanctioned by the Government in June 2011. The amendments concern the taxation of companies and shareholders when companies are relocating, as well as the taxation of companies and shareholders in connection with cross-border mergers and demergers, where the acquiring company is resident in another EEA state.
Reference is made to the EFTA Surveillance Authority’s reasoned opinion of 2 March 2011 (Event No: 566521) concerning the tax treatment of cross-border mergers etc., and to the Authority’s follow-up letter of 2 December 2011 (Event No: 616200/616046).Īs notified in our letter to the Authority of, the Norwegian Government proposed a number of amendments to the tax rules on cross border mergers etc.
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