Discriminatory taxation of lottery
prizes in Norway contrary to the EEA agreement
Reference is made to the Reasoned
Opinion of 5 August 2002, in which the ESA concluded that Norway’s
legislation concerning taxation of lottery prizes is in breach of
the EEA fundamental freedom on provision of services.
The Norwegian Government would like
to emphasize that it is in principle of the opinion that the
Norwegian legislation concerning taxation of lottery prizes is not
in breach of the EEA Agreement, and to point to the fact that the
ECJ is trying a similar case concerning taxation of lottery prizes
according to Finnish tax legislation
(case C-42/02 Diana Elisabeth Lindman). As the ESA knows,
Norway has submitted a written observation in support of
Finland.
However, after having considered
the intentions underlying the provisions on taxation of lottery
prizes, the Norwegian Government hereby signals its intention to
amend these provisions in a way that meets the concerns of the ESA
as voiced in the reasoned opinion of 5 August 2002.
The Norwegian Government finds that
section 5-50 of the Norwegian Tax Act should be amended so that
prizes from lotteries in other EEA states are exempted from
taxation in the same way as prizes from similar Norwegian
lotteries. The criteria to be used when determining whether a
foreign lottery is “similar” to the tax exempted Norwegian
lotteries has not yet been decided, and this will need further
consideration.
Due to the formal procedure for
amendment bills, the Norwegian Government will not be able to amend
the Norwegian legislation concerning taxation of lottery prizes
within the time-limit set by ESA in the reasoned opinion. However,
it is expected that new tax legislation can be implemented early
enough to take effect for lottery prizes received during 2003.
For the sake of clarity, we wish to
point out that the legislative process regarding the intended
amendments to the tax legislation could be affected by the decision
of the ECJ in case
C-42/02 Diana Elisabeth Lindman, which concerns similar
Finnish legislation.
Yours sincerely,
Jon Tingvold
Deputy Director General
Stian Wessel Fredriksen
Higher Executive Officer
