Published on 8 October 2018, the 2019 National Budget proposes to amend the Norwegian interest deduction limitation rules. The amended rules apply to companies part of a consolidated group, and limit interest deductions on bank loans, bonds and other debt to unrelated parties. The threshold amount, which determines whether the rules apply, is increased to MNOK 25. Where the threshold amount is exceeded, deductions are limited to 25 % of taxable EBITDA. Further, an equity escape clause is introduced, granting full deductions for interests if the taxpayer is able to demonstrate that the equity ratio in the Norwegian part of the company or the Norwegian part of the group is about the same as in the group as a whole. Companies subjected to the new rules are recommended to identify how the new rules may affect them and whether measures should be taken.
Areas of interest: Corporate tax