The Norwegian government has launched a public consultation on proposed amendments to the Norwegian Tax Act concerning the deductibility of debt and interest expenses for financial institutions with foreign operations. The proposed amendments specifically target situations where income from foreign business activities is exempt from Norwegian taxation under a tax treaty (exemption method). The core of the proposal is to allocate debt and interest expenses for financial institutions between Norway and foreign jurisdictions based on the tax treaty rules for the attribution of business profits. This would prevent the deduction of debt and interest incurred in a foreign permanent establishment...