Overview of tax obligations and VAT in Norway

The standard corporate income tax rate in Norway is 22 per cent. There are special tax regimes that apply to income from exploration of petroleum resources, shipping income and income from hydropower production. This is a competitive tax rate compared with other countries in the Nordics and Europe.

The rate is the same for business income, capital gains and royalties. Dividends and income from the sale of shares from limited liability companies (AS) to other corporate entities residing in Norway are taxed at an effective rate of 0.66 per cent.

There may be reduced rates and exemptions for certain types of legal entities or natural persons outside Norway, depending on the tax treaty between Norway and the other country. For further information, please seek professional legal and tax advice.

There is also property tax, and there may be other taxes or fees to consider.

Companies must file annual tax returns and may be subject to advance tax payments. A company’s tax return must be submitted to the Tax Administration by 31 May in the year subsequent to the income year. Norway has double taxation treaties with many countries, which help foreign companies to avoid being taxed on the same income in multiple jurisdictions. To benefit from these treaties, companies must apply for benefits through their Norwegian tax filings and provide certificates of tax residency from their home country.

• Companies selling goods or services in Norway must register for VAT if annual turnover exceeds NOK 50 000.
• The standard VAT rate is 25 per cent, with reduced rates of 15 per cent for food and 12 per cent for certain services.
• Most businesses must submit tax returns for VAT and payment of outstanding VAT every two months.
• Please note that certain goods and services may be exempt from ingoing and/or outgoing VAT. Please consult a VAT professional to assess your VAT obligations.

• Businesses can deduct operating expenses, employee costs and depreciation of assets from taxable income.
• The Norwegian tax scheme generally operates on a principle of symmetry. If a given source of income is subject to tax, a corresponding loss is normally eligible for deduction, although exemptions may apply.
• Depreciation rates vary by asset type, from 20 per cent for machinery to 2 per cent for buildings.

SkatteFUNN (Tax Deduction for Research and Development in an Innovative Business Sector) is a rights-based tax deduction scheme for Norwegian companies, which can apply for a tax deduction for 19 per cent of the costs of an R&D project. The scheme is administered by the Research Council of Norway in collaboration with the Norwegian Tax Administration.

• All businesses are required to keep accurate financial records and submit annual financial statements.
• Records must be kept for a minimum of five years.
• In Norway, the fiscal year is typically the calendar year (1 January – 31 December), unless otherwise approved by the tax authorities.

As a rule, an AS is required to have an auditor. Annual accounts for the company must be prepared, audited and then approved by the ordinary general meeting within six months following the end of the fiscal year. The approved annual accounts must be filed with the Norwegian Register of Company Accounts.

Small companies with few employees and low turnover may be exempt from the audit requirement if they meet certain criteria.