THE NORWEGIAN TAX APPEAL BOARD'S APPLICATION OF THE CAIANO RULING: FOUR NEW DECISIONS ON OBVIOUS ARITHMETIC OR CLERICAL ERRORS

As described in our earlier articles on the topic (here and here) the Norwegian Supreme Court held in HR-2026-921-A (Caiano) that an inadvertent selection of the wrong dropdown-menu option in the annual accounting software – causing a dividend of approximately NOK 155.6 million to be deducted twice – qualified as a "clerical error" exempting the taxpayer from penalty tax under Section 14-4 (b) of the Tax Administration Act. A 3–2 majority found the error to be both a clerical error and obvious.

The Court held that the exemption applies to errors made during completion of a tax return that result in an unintended discrepancy between the filer’s intention and what is expressed, including misunderstanding of software functionality, ticking wrong answer boxes, and selecting the wrong option in a dropdown menu. Misunderstanding of the substantive information to be entered and omissions of income that should have been entered fall outside the exemption. As to the "obvious" threshold, the error must be so conspicuous that the tax authorities cannot fail to notice it during a normal careful review, though they need not understand the nature of the error or be able to determine the correct figure.

Following the Caiano ruling, the Tax Appeal Board has issued four decisions applying the obvious arithmetic or clerical errors exemption to different digital filing scenarios. In each case, the Tax Appeal Board waived the penalty tax, departing from the Secretariat’s recommendation.

Case 1 – SKNS1-2026-33: Loss carry-forward not corrected following change of accounting software
The taxpayer overstated a tax loss carry-forward by NOK 4,339,527 (penalty tax: NOK 190,939) after failing to update the figure following a transition to new accounting software. The Secretariat recommended rejecting the complaint on the grounds that identifying the error required comparison with the prior year’s return. The Tax Appeal Board unanimously disagreed, relying inter alia on the Caiano ruling, and held that the Tax Administration’s SMIA system – which displays side-by-side "Assessed" (Nw: Fastsatt) and "Basis" (Nw: Grunnlag) columns – would have immediately revealed the discrepancy. The appeal was thus upheld.

Case 2 – SKNS1-2026-32: Incorrect carry-forward loss carried over from a copied client template
A carry-forward loss was overstated by NOK 1,846,969 (penalty tax: NOK 81,267) because the accountant had created the client’s filing template by copying one from another client without correcting the loss figure. The Secretariat did not consider the error "obvious", reasoning that the company’s low activity gave the tax authorities little basis for detecting the discrepancy. A majority of the Tax Appeal Board, again invoking inter alia the Caiano ruling, found that the SMIA system’s comparison of current and prior-year loss figures would have revealed the discrepancy, for which there was no plausible explanation. The appeal was thus upheld.

Case 3 – SKNS1-2026-34: Broken link between accounts programs after a switch of accounting software
A broken link between two accounting programs caused the accounting value of a receivable to be recorded as zero while the corresponding tax value remained unchanged, resulting in a tax-reducing temporary difference of NOK 2,010,000 (penalty tax: NOK 88,440). The Secretariat accepted that a clerical error existed but did not find it "obvious". The Tax Appeal Board unanimously overturned this conclusion, reasoning that because the receivable represented 97% of the balance sheet, a reconciliation of the difference schedule against the balance sheet would have made the error immediately apparent. The appeal was thus upheld.

Case 4 – SKNS1-2026-35: Pre-filled income information dropped from the submitted tax return
An individual taxpayer's return, submitted through an accountant, omitted pre-filled income totaling NOK 995,507, including pension income. The Secretariat found it not clearly probable that a clerical error existed. The Tax Appeal Board unanimously disagreed. Applying the evidentiary principle established in the Caiano ruling, it concluded that a technical error must have occurred during submission. As to the "obvious" threshold, the Tax Appeal Board held that a return entirely lacking personal income, pension income, bank deposits and other pre-filled items for a taxpayer of advanced age was self-evidently wrong, irrespective of whether the precise cause of the error could be identified. The appeal was thus upheld.

In all four cases the Secretariat recommended rejecting the appeal, in three cases because the error was considered not "obvious", and in the last case because it was not clearly probable that a clerical error existed. The Tax Appeal Board reached the opposite conclusion each time, drawing directly on the Supreme Court’s Caiano ruling and the previous Supreme Court rulings on which it was built (Gezina, Eksportfinans, Slørdahl). In reaching these conclusions, the Tax Appeal Board cited these rulings as the basis for treating unintended technical discrepancies as clerical errors and relied on the Caiano ruling for the evidentiary standard.

These four decisions show the Tax Appeal Board applying the Caiano ruling broadly – covering not only dropdown-menu misclicks but also incorrect carry-forward losses, broken software links and dropped pre-filled data. The "obvious" threshold was met through structural or cross-referencing inconsistencies within the tax administration’s own systems or the taxpayer’s accounts, without requiring the authorities to identify the precise nature of the error. Taken together, the decisions point to a more taxpayer-friendly approach to the obvious arithmetic or clerical errors exemption. 

It is also worth noting that the dissenting minority in the Caiano ruling warned that treating such errors as "clerical errors" would create difficult borderline questions for the tax authorities' control activities. So far, however, the Tax Appeal Board appears to have navigated this well. It is also reasonable that greater demands be placed on the tax authorities' review in the assessment of what is "obvious", in light of the digital development and the means now available to them. As the likelihood of detecting errors increases, a fair balance in the cooperative relationship between taxpayers and the tax authorities to ensure correct taxation suggests that the exemption should be applied to a greater extent.