Jana Johnsen
Partner
Bergen
Newsletter
Published:
The shareholders in A AS started a process where the aim was to ensure growth and maintenance of subsidiary's market position. A dual track process was initiated trough IPO and auction sale of A AS. During the process, A AS acquired K AS, since it was suggested as an alternative to list K AS, which was a newly formed company, to facilitate the IPO process if the sale process was not completed.
The IPO process was put on hold when A AS was sold. A AS had incurred substatial costs in relation to the IPO process and claimed deduction for the costs.
The tax office argued that K AS was the correct subject that could claim deduction, as K AS was the final candidate for the IPO before the IPO was cancelled. The Secretariat did not share the tax office's view, that only the final intended company to be listed may claim deduction for these costs. The Secretariat found it proven that A AS was a candidate for IPO four out of the five months that the process was ongoing and during which the costs were incurred. The Secretariat did not find it decisive for the right to deduct the costs that a new final candidate was appointed for listing, as long as the IPO process for A AS had been real. Nor did it matter that the IPO was canceled by A AS.
The tax office claimed that there was insufficient connection between the costs and A AS' future earnings, as the company was also in a sales process. In reference to the Kverva judgment, Rt. 2015 p. 1068 (64) the Secretariat underlined that since it is permitted to deduct listing costs, the stated purpose of the listing cannot be disregarded. The Secretariat agreed with A AS on the grounds that the IPO process should ensure, and increase earnings and growth for the group, which would also result in increased dividends in A AS's subsidiaries.
The Secretariat did not find it decisive that some of the assignment agreements had been entered into by another group company. The Secretariat concluded that A AS could deduct the costs even if the group enter agreements on its behalf, provided the costs relates to the canceled IPO process where the company was a candidate and had covered the costs.
The tax Appeals Committee unanimously supported the Secretariats recommendation with respect to the issue described above.