NextGenTel received report from tax audit

Norwegian tax authorities (Skatt øst) have performed a tax audit of NextGenTel Holding ASA (“the Company”) and the Company has received a report giving notice of a possible change in the taxation of the Company for the years 2009-2015.

The issue is related to the taxation of the Company’s wholly-owned Swiss subsidiary Telio SA and dividends paid from Telio SA to the Company. Total dividends received from Telio SA in the relevant period amount to NOK 202.9 million. Skatt øst is claiming that Switzerland should be regarded as a low tax jurisdiction (“lavskatteland, skatteloven § 10-63”) and that NextGenTel Holding ASA therefore should have paid Norwegian corporate income tax on the dividends received from Telio SA.

The Company has based its practice on the assumption that the taxes paid by Telio SA have been sufficient (minimum 2/3 of the equivalent Norwegian corporate income tax rate) amounting to NOK 21.3 million in the relevant period, and consequently the dividends received by the Company should not be subject to Norwegian corporate income tax as it is comprised by the participation exemption method (“Fritaksmetoden”).

The Company and its tax advisors are in the process of assessing the report from the tax authorities. The Company disagrees with the tax authorities’ description and use of facts and will challenge the conclusions of the report. The deadline for replying to Skatt øst is 24 February 2017.