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TP audit guide

An overview of the audit environment in Norway by Silje Brattetveit Helle and Per Frode Sundby, PwC.

Market overview

In the past year, the Norwegian tax authorities have continued to be interested in multinationals' operations and transfer pricing audits have been high on the agenda. Advisers said the demand for dispute resolution and litigation work, as well as compliance, has drastically increased over the past year.

"Transfer pricing is growing in importance, and I think that a lot of the companies have moved this higher up on their agendas. The compliance burden is increasing, but significantly, this seems to be the main, or one of the main, focus areas for tax audits in Norway," KPMG partner Thor Leegard said.

Although it has been a stable year with few changes, the OECD's BEPS Project and its potential impact has been a main topic for advisers and taxpayers. Overall, companies appear to be more aware of the changing environment than in the past and make efforts to review their TP documentation and structures. Other international issues, such as the recent EU court rulings and Brexit, have also caused further uncertainty.

"At least in TP audits, we see a tendency to reference BEPS more. Value chain analysis, substance issues and the like are more in focus than a few years ago," said Hans Martin Jørgensen, head of transfer pricing at Deloitte.

However, it has been challenging to adapt to the unknown and the complete impact of BEPS is still unclear. Norway's transfer pricing rules generally follow the OECD guidelines and the existing standards were quickly revised to match the BEPS Project. Despite this, BEPS has been a huge driving force for many advisers. "Making clients aware of the fact that they need to align to regulations and ensure that they are reporting it correctly," said Christin Bøsterud, managing director at EY.

On May 11 2016, the Norwegian Ministry of Finance released a legislative proposal with respect to country-by-country reporting (CbCR), requiring multinationals with annual consolidated group revenue of NOK 6.5 billion ($8 million) or more, to submit a CbC report to the authorities. The first reports would be submitted by December 31 2017 for the fiscal years beginning January 2016. However, the proposal did not include any provisions related to a master file or local file.

As more legislative changes are to come, advisers expect to see an increase in the demand for information and seminars to understand the developments in international tax law. Sverre Hveding, head of the tax practice at Selmer, said: "It's really exciting times now and we expect new rules that will strengthen the tax system and stop base erosion and profit shifting."

In the coming year, advisers expect more changes and for transfer pricing to continue to be high on the agenda. "Transfer pricing is always going to be important, we will probably see more and more aggressive tax authorities," said Joachim Bjerke, head of tax at BA-HR.

Tax authorities

Ministry of Finance
PO Box 8008 Dep
NO – 0030 – Oslo
Tel: +47 22 24 90 90

Tax rates at a glance

(As of June 2016)

Corporate income tax 25%
Capital gains tax 25/28.75%
Branch tax 25%
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 2016 Worldwide Corporate Tax Guide

Firm contact details

Steenstrup Stordrange