CJEU – Recent Developments in Direct Taxation 2023

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 (the right of establishment) of the Agreement on the European Economic Area (“EEA Agreement” or “EEA”), read in conjunction with Article 34. 1 July 2021. Oslo District Court (a first instance court) sent a request for an Advisory Opinion from the EFTA Court regarding whether the Norwegian rules on limitation of deductibility of interests, in combination with the group contribution rules, are compatible with Articles 31 and 34 of the EEA Agreement. On 1 June 2022, the EFTA S. 48Court delivered a judgement where the EFTA Court answered the questions referred by Oslo District Court.

On 15 December 2022, the Oslo district court delivered its judgement in the case in favour of the tax authorities. The taxpayer appealed the case to the appeal court where the taxpayer won. The decision from the app...