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Norway to tax Google, Starbucks, multinationals

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Staff writer ▼ | April 9, 2013
Norwegian finance minister Sigbjorn Johnsen said that the government wants to shut a tax loophole exploited by multinational companies doing business in Norway.
Sigbjorn Johnsen
Sigbjorn JohnsenNorwegian finance minister Sigbjorn Johnsen said that the government wants to shut a tax loophole exploited by multinational companies doing business in Norway.


The government intends to limit the possibilities they have to move profits among various units to avoid tax liability.

Using creative accounting and differences in tax laws between countries where they arere operating, highly profitable companies from Google to Starbucks can ease their tax burden in highly-taxed locations, writes newsinenglish.no. Of course, companies have recognized the advantage of having high costs and seemingly low profits in the Norway and they are moving profits to its units in countries where tax rates are lower.

Mr. Johnsen said to Norwegian media that the government is considering limiting multinationals' ability to deduct interest expenses on debt.

"This is being done in several other countries to take care of the tax base and ensure that taxes are paid in the countries where the value is created," said Mr. Johnsen and added that his ministry's proposal could generate billions for the state budget. Under the proposal, there will no longer be an incentive for multinationals to finance major purchases by placing their debt in Norwegian subsidiaries to reduce taxable income.


 

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