Brev til EFTA Surveillance Authority

Dear Mr. Jónsson

Tax deduction by way of AMS (aksjesparing med skattefradrag)

Reference is made to your letter of 16 July 2001 concerning the compatibility of the Norwegian rules regarding AMS with the free movement of capital and the freedom to provide services.

First we would like to inform you that The Norwegian Government this autumn will put forward a bill to the Norwegian Parliament for repeal of the remaining Paragraph 5, 7 and 8 of section 16-11 of the Norwegian General Tax Art. If the bill is passed, the repeal of section 16-11 will enter into force from 1 January 2002. This implies that the rules will be eliminated as from the income year 2002.

By repealing the remaining paragraphs of section 16-11, there will no longer exist requirements regarding the investment of the Ucits. This implies that the shareholders will be allowed to sell the AMS Ucits prior to the expiration of the originally lock-in period of 4 years without claims that they must pay back the tax deduction.

You will be informed about the decision when the bill has passed the Parliament.

Please send us a message if you want a copy of the bill. In that case we will also send you the relevant text translated to English.

To your request for information, the Norwegian Government submits the following observations:

1. The current legal framework relating to AMS in Norway:

The access to AMS (aksjesparing med skattefradrag) is repealed as of the income year 2000. The statutory rules concerning realisation/redemption within 4 years after trade are still in force (remaining rules).

When a shareholder realises AMS unit, share or primary capital certificate, ordinary profit and loss calculation is made according to the legislation on realisation of shares etc. Profit is subject to taxation and loss is subject to deduction both within and after the expiration of the lock-in period. At redemption, the trust company of the AMS fund is obliged to notify the taxation authorities.

Realisation/redemption within 4 years after trade:

As a main rule, the shareholder must pay an tax addition by 15 % if AMS unit, share or primary capital certificate (that have been subject to tax deduction)

- is realised

- or voluntary pledged

by the shareholder within 4 years from trade. The time limit of 4 years is estimated from date of payment or date of trade of share etc. to date for realisation or pledging.

The tax addition of 15 % is made the same year that an AMS Unit, share or primary capital certificate is realised or pledged. The addition is estimated of the deposit or the investment that is realised, exclusive purchase price and costs The actual price by the redemption is of no consequence in this matter.

The tax addition is calculated mechanically based on reports from the Norwegian Central Securities Depository to the Directorate of Taxes.

b) The reasons for the investment requirements in Paragraph 5 of Section 16-11 was that AMS was established to stimulate the access of share capital and reserves to the Norwegian business life. However as mentioned above, the Norwegian Government will soon put forward a bill which implies that the remaining rules will be repealed.

c) and d): The total current amount kept in AMS Ucits in 1999 is 2 931 062 906 NOK.

e) How many people own units in those AMS Ucits: In 1999, there were 507 879 AMS-subscriptions distributed on 476.313 persons.

f) Would an Ucits (Investment funds), established in another EEA State than Norway, be eligible (berettiget) to receive AMS payments if it followed Paragraph 5 of Section 16-11? If affirmative, on what legal grounds would that be based?

No. AMS was established on condition that AMS funds should be administrated by Norwegian companies who had permission to operate trust management. This was due to tax control considerations.

Yours sincerely,

Thorbjørn Gjølstad

Director General

Jon Tingvold

Deputy Director General