Songa Offshore SE : Norwegian Exit Tax

Reference is made to the Exit Tax Dispute with Norwegian Tax Authorities.
 
On 5 November 2014 the Norwegian tax office increased the taxable income of Songa Offshore SE ("the Company") for 2009 by NOK 1.8 billion. The tax office set off the increased income against the, at the time accumulated, tax carry forward losses and no cash payments were incurred. On 5 May 2015 the Company submitted a writ to Oslo District Court to keep the loss carry forward unchanged. For financial books the Company kept the relevant carry tax loss as a tax asset.
 
On 6 and 7 December 2016 the case was heard before the Oslo District Court.
 
On 16 January 2017 the Company received the judgement from the Oslo District Court in favor of the State. The court held that the exit tax decision is valid. The court believed that a situation where a company moves the company and rigs out of Norway, and a situation where a company moves out rigs, are two different situations, and not in breach of the European Economic Area (EEA)-agreement. Furthermore, the Court held that the exit tax was not disproportionate.
 
As a consequence the NOK 1.8 billion increase of the Company's taxable profit for the year 2009 remains unchanged. For the income years 2009-2015 the judgment does not result in any payable tax. For 2016 the Company will partly be in tax paying position and based on preliminary results for the Norwegian entities for 2016, the 2016 payable tax is estimated to be approximately USD 10 million.
 
The Company will consider to reflect the effect of the judgment in the 2016 financial books and write off the relevant tax asset, currently estimated at USD 43 million.   
 
The Company has decided to appeal the case.
 

16 January 2017
Limassol, Cyprus

 
Questions should be directed to:
Jan Rune Steinsland, CFO ([phone])

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)

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Source: Songa Offshore SE via Globenewswire