Notification of the depreciation rules of the Petroleum Tax Act Section 3b

Notification of the depreciation rules of the Petroleum Tax Act Section 3 b, as amended, relating to large scale LNG facilities located in Finnmark County or the municipalities of Kåfjord, Skjervøy, Nordreisa or Kvænangen in Troms County

We refer to previous correspondence with the EFTA Surveillance Authority (the Authority) relating to Complaint on “Særskilt avskrivningssats for produksjonsinnretninger og rørledningsanlegg for gass tilknyttet storskala nedkjølingsanlegg (LNG)”

The correspondence consist of the following letters:

• letter of 20 December 2001 from the Authority – “Request for information”
• letter of 8 February 2002 from the Ministry of Finance to the Authority, in response to the said letter
• letter of 18 March 2002 from the Authority – Preliminary assessment/Request for further information
• letter of 19 April 2002 from the Ministry of Trade and Industry to the Authority, in response to the said letter, and
• letter 30 April 2002 from the Ministry of Trade and Industry to the Authority, containing additional information in particular regarding aspects of the investment stream and compatibility with Article 61 (3) © of the EEA Agreement.

The Government has today put forth a proposal to the Storting to amend the geographical scope of the Petroleum Tax Act Section 3 b, third sentence, to the effect that the rules on depreciation contained therein will be applicable only in cases where the large scale LNG- facility be located within the geographical areas of Finnmark County or the municipalities of Kåfjord, Skjervøy, Nordreisa or Kvænangen in Troms County. These areas are within the Priority A area of the map of assisted areas for Norway, which was approved by the Authority on 16 December 1999 (ESA Decision 327/99) under the EEA Agreement Article 61 (3)©.

A copy of the Ot.prp. no 84 (2001-2002) containing the proposal is enclosed with this letter.

The Ministry of Finance further enclose a letter of today to the Authority setting out in greater detail the economic consequences of the amendment to the Petroleum Tax Act, as deemed relevant to show that the depreciation rules of PTA Section 3 b, third sentence as amended will be compatible with the limits and requirements of article 61 (3)© of the EEA Agreement.

On this background the Ministry of Finance requests that the measure be notified to the EFTA Surveillance Authority for approval under the said provisions and guidelines on regional assistance.

Yours sincerely,

Enclosure