ECJ-Recent Developments in Direct Taxation 2013

S. 178I. Introduction

The Fred. Olsen case is a request for an advisory opinion from the EFTA Court regarding the compatibility of the Norwegian CFC legislation and wealth taxation with the European Economic Area Agreement (EEA Agreement).

The case concerns CFC and wealth taxation in Norway of the beneficiaries of a trust in Liechtenstein. In relation to the CFC taxation, the first main question for the EFTA Court to answer is whether a trust as a form of establishment either falls within the scope of the freedom of establishment in Article 31 EEA or the right to free movement of capital in Article 40 EEA. Provided that this is answered in the affirmative, the next question will be whether the Norwegian CFC legislation involves one or more restrictions on the freedom of establishment or the free movement of capital. And to the extent that this is answered in the affirmative, whether such restriction can be justified and is proportional.

The second main question for the EFTA Court is to determine whether the continuous wealth taxation of the beneficiaries for the trust’s assets and taxation at a rate of 1.1% constitutes a restriction pursuant to Article 31 EEA and/or Article 40 EEA. And to t...