CJEU – Recent Developments in Direct Taxation 2022

1. Introduction

Under the Norwegian Tax Act (NTA), there is an interest limitation deduction rule in section 6-41 and a group contribution rule in section 10-2 et seq. The core question in E-3/21 PRA Group Europe AS is whether the limitation on interest deductibility under section 6-41 in combination with the Norwegian group contribution rules in NTA section 10-2 et sec is compatible with Article 31 of the Agreement on the European Economic Area (“EEA Agreement” or “EEA”), read in conjunction with Article 34. On 1 June 2022, the EFTA Court issued a recent opinion on the issue (Case E-3/21). On 15 December 2022, the Oslo district court (first instance court) delivered its judgement in the case in which the state won. The decision has been appealed .

2. Facts

PRA Group is a global group engaged in the acquisition of financial assets and service of debt. The group has several companies in Europe, which are owned by the holding company PRA Group Europe Holding S.à.r.l. That company is subject to taxation in Luxembourg. PRA Group Europe Subholding AS (a tax resident limited liability company in Norway) was a wholly owned subsidiary of the holding company PRA Group Europe Holding S.à.r.l. P...