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 31 August 2020. Other extensions have been granted to value-added tax (VAT), pay-as-you-earn (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 European Union (EU) Directive 2018/822/EU (DAC 6), was published on 27 June 2019. The consultation deadline was 2 December 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 (WHT) on interest and royalties
A proposal for WHT 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 more than 50% ownership in low-tax jurisdictions. The rate is 15% of gross payments, or a net 22% payment option for European Economic Area (EEA) countries. The application of WHT on royalties and interest will be limited by existing Norwegian tax treaties.
Proposed initial year amortisation of certain assets
It is proposed to increase the initial year amortisation 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 European Free Trade Association (EFTA) surveillance authority.
Tax loss carryback for 2020
Corporate losses of up to 30 million Norwegian kroner (NOK) will, in the tax calculation for the income year 2020, automatically be carried back against tax profits in income years 2019 and 2018.