Mutual Agreement Procedure - (company X)

Finandepartementet har i brev av 10 desember 1998 til Finansdepartementet i Nederland uttalt:

"I refer to your letter of 7 July 1998, in which you question Norway's right, under the Double Taxation Convention of 1990 between our countries, to tax (company X) for the hiring out of labour on the Norwegian continental shelf.

In our view the hiring out of labour consists of two separate activities: The acquiring of personnel and the actual hiring out of labour. If both these activities are carried out on the continental shelf, we will consider the activity to fall within the scope of paragraph 2 of Article 24.

As regards the case of (company X), we agree with you that the company's activities consist merely of the hiring out of labour, and therefore does not meet the requirement "... carries on activities offshore in the other State ..." in paragraph 2 of Article 24. Consequently, the tax assessment of the company for the income years 1991-1996 has been withdrawn. For your information, please find enclosed a copy of a letter of 18 November 1998 from the Central Office - Foreign Tax Affairs to (company X).

Further, I would like to point out that the so-called explanatory note to the tax assessment for 1994 by the "Commission for tax assessments", referred to on page 2 paragraph 2 of your letter of 7 July 1998, is the Assessment Board's decision in the case of (company X) for the income year 1994, and does not represent the general Norwegian view on the interpretation of tax treaties as regards to the hiring out of labour."