Norwegian tax authorities win overhead recharges case
May 28, 2010
The Norwegian tax authorities recently won its overhead costs case against Enterprise Oil Norway (EO) in the Norwegian courts, because EO could not provide sufficient documentation to show that it had received the services that it had paid for.
The decision, which is final and cannot be appealed, resulted in EO being denied corporate income tax deductions of NKr141 million ($21.5 million) over four accounting periods. The case provides useful guidance as to how the Norwegian tax authorities are likely to approach the regulations concerning centralised services on a continuous basis. It also highlights the transfer pricing issues that can arise when a group introduces complex internal systems that it is not able to follow.
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