Siem Offshore takes tax dispute to courtNews // June 27, 2014
Siem Offshore in Norway is disputing a fine levied against it with regard to its tax returns, and alleged tax avoidance, and says it plans to take the issue to court.
In a statement, Siem Offshore said: "Økokrim (Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime) has today levied a fine againstSiem Offshore of NKr 10 million for alleged violations of Norwegian tax legislation following an indictment which was reported in August 2013. Økokrim also want to reclaim NKr 2.5 million in an alleged saved guarantee fee related to exit taxation.
"The company dispute Økokrim’s findings and finds them unjustified, particularly in relation to the claim that the company has wilfully sought to defraud tax.
"The company has therefore as a matter of principle resolved not to accept the fine, which means that Økokrim will have to decide whether to press charges in a normal court procedure."
The fine relates, firstly, to failure to deliver a Norwegian tax return for the tax years 2005-2007 and, secondly, to ticking the wrong box in the tax return for 2008 in relation to exit taxation following a renegotiated contract structure for the company's vessels operating on the Norwegian continental shelf.
The statement went on to say: "With respect to the non-delivery of tax return for 2005 to 2007 this relates to a misunderstanding by the company and its advisors with respect to its obligation to limited taxation for operations of certain vessels on the Norwegian continental shelf during these tax years.
"The Norwegian tax authorities wrote to the company about this issue in 2008, upon which the company filed the tax returns and paid the outstanding tax and interest.
"Thereafter the tax authorities sat on all relevant information for five years before reporting the matter to Økokrim last year. No tax has been outstanding in the matter for several years.
"Had the company been alert to the tax obligation, the vessels would have been put into the ordinary Norwegian shipping taxation regime, which would have resulted in zero taxation. As a result of this mistake the company has paid NKr 75 million more in tax than it otherwise would have had."
The company said it cannot accept that this failure to deliver tax returns can be perceived as a scheme to avoid tax.
With respect to the issue regarding the exit taxation in 2008, the company had at the time of filing the tax return in July 2009 decided to move its tax residency to Norway, which meant that any tax liability relating to the exit of vessels would be extinguished. This has been accepted by the tax authorities.
"The company can therefore not accept that the wrong tick in the box can be seen as a wilful or grossly negligent act made for the purpose of defrauding tax," said Siem Offshore.
"The company thus disagrees with Økokrim’s assessment of the evidence. The company is also of the view that Økokrim’s application of the law in relation to the exit taxation issue is incorrect... and looks forward to a fair, balanced and objective procedure in court based on the full evidence."