Reasoned opinion concerning deductions from taxable income for donations to non-profit organisations with a seat of administration in Norway

Reference is made to the EFTA Surveillance Authority (hereinafter “Authority”) reasoned opinion dated 16 December 2009 (Event No: 290603), regarding the provisions laid down in Section 6-50 of the Norwegian Tax Act concerning deductions from taxable income for donations to non-profit organisations. The Authority concludes in the letter that these rules are in breach of Article 40 of the EEA Agreement because the provisions only allow deductions from taxable income for donations to non-profit organisations with a seat of administration in Norway.  By letter of 11 February 2010 the Ministry requested the Authority for an extension of the time limit to 30 March 2010. The Authority did not approve the Ministry’s request for extension by letter of 11 February 2010. Reference is also made to the Ministry’s letter of 16 February 2010.

In light of the arguments put forward by the Authority and the judgement by the ECJ in C-318/07 Hein Persche v Finanzamt Lüdenscheid, the Norwegian Government has decided to propose an amendment to the Norwegian Tax, introducing equal rules regarding deductions for donations to organisations with a seat of administration in Norway and organisations with a seat of administration within the EEA-states. The Government intends to present this proposal to the Parliament later this year. The
 
Ministry will provide the Authority with a more detailed description of the amendment when the proposal is presented.

Yours Sincerely
Stig Sollund  e.f.
Director General
                                                  Bjørn Berre
                                                  Deputy Director General

Copy: The Norwegian Directorate of Taxes