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New temporary tax regulation allowing companies to carry back losses against profits


As a step to improve the situation for Norwegian companies as a result of the current financial crisis, the Norwegian authorities have passed tax regulations admitting companies to carry back losses in 2008 and 2009 against profits from the proceeding two years - 2006 and 2007.

These regulations apply for losses up to MNOK 20 for each year, presupposing the profits in 2006 and 2007 correspond with the loss carried back each year. The company will receive the tax value 28 % of the loss, with a maximum of MNOK 5,6 and 1,3 % interest of the actual amount in the companys favour, with a maximum NOK 72 800, each year.

Companies in a group for tax purposes in Norway (company holding at least 90 % of the shares and votes in a subsidiary), should consider an adjustment of contributions for tax purposes from other group companies, in order to utilize the loss carry back regulation, and benefit from the interest allowance on the tax value of the loss carried back each year.
Further, in such groups, correct allocation of deductable costs to the respective companies is necessary in order to carry losses back in profits from each company.

The regulations apply to all Norwegian limited companies, and between companies in a group domiciled in Norway. However the regulations do not apply for group contribution between a Norwegian company and companies domiciled in foreign countries.

A request has been made to the Norwegian authorities on the appliance of the regulations as far as Norwegian subsidiaries with foreign parent companies with diverging financial year are concerned. Restructuring of a company during the permanence of these regulations can have impacts on the amount of the loss that can be carried back. The temporary permission to carry losses back is a considerably technical contrivance.

For further information, your Taxand contact details are:
T. + 47 23 11 65 00
E. or

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