In a judgment delivered last week by the Borgarting Court of Appeal (Borgarting lagmannsrett), it overturned a judgment of the Oslo District Court (Oslo tingrett) which had not correctly applied the test given to it by the EFTA Court.
This judgment of the Court of Appeal in Case 23-034315ASD-BORG/02, PRA Group Europe AS v Norway, delivered on 30 August 2023, found that the restriction on the freedom of establishment was not justified by the state.
The opposite conclusion was reached by the Oslo District Court, which found in favour of the state, notwithstanding the fact that that court had made a request for an advisory opinion of the EFTA Court. That came to be Case E-3/21, PRA Group Europe AS v Norway, concerning the freedom of establishment under Article 31 EEA and Article 34 EEA, where it ruled that a non-Norwegian-based company in a group of companies, but established in the EEA, is in a comparable situation to a Norwegian-based company in a group with another Norwegian-based company. It found that the national measures imposing the restriction could be justified in limited circumstances, such as ‘where it serves the legitimate objective of preventing wholly artificial arrangements leading to tax avoidance’.
The Oslo District Court thus ruled for the state on this exception. The Borgarting Court of Appeal disagreed, and said it was not justified. It thus proceeded to invalidate the decision of the Norwegian Tax Administration (Skatteklagenemnda).
The judgment of the Borgarting Court of Appeal is available here.