Arm’s Length Capital Structure in Intra-Group Financing Companies – Disregarding of Equity Financing

This article describes how the Norwegian tax authorities have approached intra-group financing structures. This has given rise to a question of whether the arm’s length principle provides a basis for recharacterizing equity as debt in order to establish an arm’s length profit. The issue is still disputed in Norway, as there is still no final decision from either the appeal body or the legal system.