Norway

Corporate - Significant developments

Last reviewed - 06 February 2021

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.

Withholding tax (WHT) on interest and royalties

WHT on interest, royalty and certain rent payments to related companies in low-tax jurisdictions  will enter into force from 1 July 2021 (1 October 2021 for rent payments). The proposed rate is 15%. There will be an exemption for payments to low-tax jurisdictions within the EEA, provided that the receiving company is genuinely established and fulfills an overall substance test. The application of WHT on royalties and interest will be limited by existing Norwegian tax treaties.

Increased initial year amortisation of certain assets due to COVID-19

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.