Delayed filing and payment deadlines due to COVID-19
Due to the COVID-19 situation, the general tax filing deadline for corporations for the income year 2019 has been extended to August 31st 2020. Other extensions have been granted to VAT, PAYE, employment tax, and financial activity tax payment and/or filing deadlines.
Proposal for disclosure of tax arrangements will likely be delayed
The report from the special committee to consider the implementation of reporting obligations for tax arrangements, corresponding closely to EU-directive 2018/822/EU (DAC 6), was published on June 27, 2019. The consultation deadline was December 2, 2019. The original expectation was for a legislative decision in 2020 with effect from 2021. In light of the uncertainty surrounding the technical details of the legislation, the high implementation costs and the recent EU reporting extension, we see the legislation as likely to be delayed.
Proposal for withholding tax on interest and royalties
A proposal for withholding tax on interest and royalties, including lease payments for certain mobile and offshore assets, was released for comment 27 February 2020, proposed to be implemented from January 2021. As regards interest the proposal is only affecting payments to parties related by >50% ownership in low-tax jurisdictions. The rate is 15% of gross payments, or for EEA countries, a net 22% payment option. The application of withholding tax on royalties and interest will be limited by existing Norwegian tax treaties.
Proposed initial year amortization of certain assets
It is proposed to increase the initial year amortization of assets that fall within tax asset group D (machinery, personal vehicles, etc.) by 10 percentage points, from 20% to 30%, provided that the assets are acquired between the time the proposal enters into force and the end of 2020. The proposal may be extended later to include 2021. As the proposal may be considered state aid, it needs to be approved by the EFTA surveillance authority.
Tax loss carryback for 2020
Corporate losses of up to NOK 30m will, in the tax calculation for the income year 2020, automatically be carried back against tax profits in FY19 and FY18.