No deduction for break fee on aborted share purchase, appeal board holds

The taxpayer, a wholly owned subsidiary acting as parent for a services segment, had agreed to buy all shares in two companies and the share purchase agreement was terminated before completion, leaving the taxpayer to pay a termination fee to the sellersSkatteetaten. It deducted the fee and argued it was deductible under skatteloven § 6-24 første ledd: the fee qualified as a cost incurred to acquire income exempt under the exemption method in § 2-38, and fell outside the bar in § 6-24 annet ledd because only costs that would have been capitalised had the acquisition completed count as ervervs- og realisasjonskostnader — a fee payable only if the deal collapses can never be capitalised into the shares' cost price.

The tax office and then the Board's majority disagreed. The second paragraph of § 6-24 denies deduction for acquisition and realisation costs "uavhengig av om erverv eller realisasjon gjennomføres" — regardless of whether the acquisition or realisation is carried throughSkatteetaten — and that addition, in force from the 2016 income year, was introduced precisely to settle disputes over failed acquisitions, as explained in Prop. 1 LS (2015-2016) pkt 12.2. The majority held that a fee regulated in the share purchase agreement itself is directly tied to the attempted share acquisition, and that the provision's purpose and the symmetry of the exemption system — only 3 per cent of dividends are taken into income at a 22 per cent rate, an effective rate of 0.66 per cent, because shareholder-cost deductions are narrowly confined — argue against reading the bar narrowly. A termination fee is no running owner cost and most resembles the one-off cost an acquisition cost is, the majority reasoned, endorsing the tax office's analysis.

The secretariat had recommended the opposite: allowing the deduction. It read the preparatory works (Ot.prp. nr. 1 (2005-2006) pkt 15.3) as limiting annet ledd to costs that would have been capitalised had the transaction completed, and found the statutory wording's "ervervs- og realisasjonskostnader" naturally points to costs of an acquisition or realisation — a fee compensating the seller because the purchase never happened is neither. It also rejected confining første ledd to running owner costs, citing Rt-2015-1068 (Kverva) on eierkostnader, and found sufficient connection between the fee and the acquisition of exempt share income. One Board member, Hajem, voted with the secretariat; the majority of Folkvord, Dirdal, Fredriksen and Nyhus carried the refusal.

The result follows the Supreme Court's line in HR-2016-2249-A (Evry): costs of a share acquisition that never materialises fall under § 6-24 annet ledd, and the state need not decide whether such costs already fall outside the deduction in første ledd. Companies negotiating acquisitions therefore cannot deduct a contractual break fee on an aborted share purchase covered by the exemption methodSkatteetaten — even though the same fee would never have arisen, and never been capitalised, had the deal completed.

Legal basis: skatteloven § 6-24 første and annet ledd; Skatteklagenemnda stor avdeling decision SKNS1 38/2026 of 16 June 2026, published 30 September 2026.