Supreme Court verdict pleases Farstad - owners win long-running tax battleNews // February 15, 2010
Farstad in Norway has expressed its delight at last week's Supreme Court ruling in the longstanding issue of the transition rules to the new tonnage tax system.
Farstad Shipping was one of three shipowners to challenge the Norwegian Government regarding the transition rules into the new tonnage tax system.
At the end of last week, the Supreme Court decided in favour of the shipowners claim, voting six to five in favour of the owners.
Said Farstad: "This implies that the Supreme Court has concluded that the transition rules adopted by the Government in December 2007 regarding the transition from the old tax regime to the new tonnage tax system is in breach of the Constitution, paragraph 97."
"Farstad Shipping is pleased with the verdict. This confirms that retroactive taxation is not legal. Further the verdict provides the basis for predictable conditions for shipping activities based in Norway."
The financial consequences of the verdict are that the company's equity capital will be improved by NKr 635.6 million, which is the payable tax claim. This corresponds to NKr 16.30 per share. The amount will be posted as income in the comapny's 2009 accounts.
Farstad Shipping has already paid taxes of NKr 127.2 million. "This will be the positive effect on liquid assets from the verdict," said Farstad.