DFDS — Environmental & Social Information 2007

Nov 13, 2007

Company announcement

No.: 18/07 Copenhagen, 13 November 2007

New tonnage taxation scheme in Norway

The Norwegian government has submitted a bill to introduce a new tonnage tax system for Norwegian shipping companies. The contents of the new scheme, and in particular the manner in which the present tax regime is to be abolished, is currently the subject of intense debate, as the transition will entail a considerable tax burden for the Norwegian shipping industry.

The bill is expected to be adopted by the Norwegian parliament in December 2007, but the final form of the legislation and its precise consequences are not yet known.

The new tax regime is planned to apply from 2007, inclusive, and its contents will largely correspond to the tonnage taxation regimes of several EU nations, including Denmark.

The new scheme will bring several taxation benefits for DFDS' Norwegian shipping activities, including a generally lower level of taxation and the possibility of including further shippingrelated activities under the scheme.

The transitional rules for the new scheme, however, will entail the taxation of the untaxed equity (profits) built up under the existing shipping taxation scheme, as calculated at the end of 2006. On the basis of the proposed act, preliminary estimates predict taxation expenses amounting to approximately DKK 80 million for DFDS if the bill is passed, which will be offset in the annual accounts for 2007. It will be possible to offset one-third of the sum to an environmental fund. The size of the tax sum is as yet uncertain, as the final form of the rules is not yet known.

Under the bill, the tax sum is to be paid in equal instalments over the coming ten years, at onetenth of the amount every year. The annual effect on cash flow is however expected to be lower, as a certain reduction in DFDS' Norwegian tax is expected as a result of the new taxation scheme.

For more information, please contact: Christian Merrild, CFO, telephone +45 3342 3201