Tax Treaty Case Law around the Globe 2015

S. 51Norway: GE Healthcare Case – Hybrid Entity

Eivind Furuseth

I. S. 52Introduction

The GE Healthcare case concerns the question of whether Norway is bound by the classification of an Irish company under Irish domestic law when it comes to the application of the tax treaty between Ireland and Norway. A Norwegian limited liability company (GE Healthcare AS (GE Norway)) held an Irish company (a 99 % holding) (GE Ireland) which under Irish tax law was considered as a taxable entity while under Norwegian domestic law, the Irish company was considered as a transparent entity. Consequently, the profit of GE Ireland was taxed in the hands of GE Norway.

II. Facts

The case concerns the tax assessment of GE Norway for the fiscal years 2003 to 2006. GE Norway owned GE Healthcare Ireland (GE Ireland), an Irish limited liability company established in Ireland in 1990. In 1995, GE Ireland was transformed into an "unlimited company having a share capital" where members have unlimited liability for the obligations of the company. The unlimited liability however arises when the company is liquidated. The reason for the conversion from a limited liability company to an unlimited company having a share capital was...