Market overview

Norway has seen robust economic growth despite being hit hard by the global slump in oil prices. There has been growth in other areas, particularly in services and real estate, while foreign investors remain confident in the country's economic stability.

The prospects of the Norwegian economy are unlikely to change as a consequence of BEPS measures, however, there is uncertainty surrounding new laws. As part of its commitment to BEPS, Norway has set out to adopt new TP measures. The Norwegian government signed up to the multilateral instrument (MLI) on June 7 2017.

The MLI facilitates double tax treaty (DTT) negotiations, the implementation of two minimum BEPS standards on treaty abuse prevention and dispute resolution through mutual agreement procedures (MAPs).

While the MLI has raised a lot of questions for companies around the world, there is an additional complication in the case of Norway. Unusually, the Norwegian government did not initially disclose which articles it aims to implement. This is because of a technicality in Norwegian law that requires such provisions to be publicised when the measures are presented for a parliamentary vote.

"Of course, we have the MLI from the OECD. Norway has signed up, but we are the only country not to disclose which articles it signed up to on June 7 2017," said Per Daniel Nyberg, a partner at KPMG Norway. "Norway's MLI positions were disclosed only in July, and will for now apply to 28 out of 84 tax treaties. Several reservations were also made. A proposal for implementation to the Parliament from the Ministry of Finance is expected during the autumn of 2017."

So far it is unclear which treaties Norway will renegotiate under the MLI.

Law firms and clients are left to guess what the impact of the MLI will be and can only wait and see what the Ministry of Finance chooses to implement.

However, there are trends where Norway is not the exception. For example, the Norwegian tax authorities have become more aggressive in light of the BEPS recommendations. Though the rise of scrutiny itself is not new to the country, the tax authorities have new pretexts for pursuing companies.

"The increase in audits has been steady over the last 10 years," said Hans-Martin Jørgensen, head of transfer pricing at Deloitte. "Though the focus of the audits and the nature of the questions has evolved. So the audits we face today are much more BEPS-related. Typically, the question of substance is a question that comes up more."

Not only do multinational companies have more concern over substance issues, they are much more interested in value chain analysis. This is alongside the rise in demand for legal advice and support in areas such as compliance, dispute resolution and litigation. These trends look set to continue into 2018.

Tax authorities

Government Administration Services
Postbox 8129 Dep, 0032 Oslo
Tel: +47 22 24 90 90

Tax rates at a glance

(As of July 2017)

Corporate income tax 25%
Capital gains tax 24%
Branch tax 24%
Withholding tax
Dividends 25% (a)
Interest 0%
Royalties 0%
Branch Remittance Tax 0%
Net operating losses (years)
Carryback 0
Carryforward Unlimited

  1. This tax applies to dividends paid to non-resident shareholders. Dividends paid to corporate shareholders that are tax residents and genuinely established in member states of the European Economic Area (EEA) (including the European Union [EU], Iceland and Liechtenstein) are exempt from withholding tax

Source: EY and Deloitte

Firm contact details

Steenstrup Stordrange DA