NORWAY Law and Practice Contributed by: Thea Slethaug, Axel Bjørke, Sigbjørn Sørensen and Jarand Aarhus, Aider Legal
• Transfer pricing rules: Sections 13-1 and following of the Tax Act require related-party transactions to be conducted on arm’s length terms. Norwegian rules are closely aligned with the OECD Transfer Pricing Guidelines. • CFC rules (NOKUS): Norwegian shareholders in CFCs located in low-tax jurisdictions are taxed on their proportionate share of the CFC’s income on a current basis, regardless of distribution. • Thin capitalisation/interest limitation rules: Norway limits the deductibility of net interest on related- party loans (and from 2019, also third-party loans, for larger groups), restricting deductions above a threshold relative to EBITDA. • Exit taxation: Gains are taxed upon emigration or transfer of assets/functions outside Norway. • Withholding tax on royalties: Applied to related-par - ty payments to low-tax jurisdictions (since 2021). Norway has implemented all four BEPS minimum standards, including country-by-country reporting (CbCR), mandatory disclosure rules and treaty chang - es through the MLI. 5.3 Blacklists and Non-Cooperative Jurisdictions Norway’s Low-Tax Jurisdiction List Norway does not maintain a formal “blacklist” in the same manner as some other jurisdictions, but does operate a concept of low-tax jurisdictions ( lavskatt- land ) for purposes of the CFC rules. A jurisdiction is generally considered a low-tax jurisdiction if its cor - porate income tax rate is less than two-thirds of the Norwegian rate (ie, below approximately 15%). Tax Consequences Transactions with entities in low-tax jurisdictions may trigger: • CFC taxation of Norwegian shareholders; • withholding tax on royalty and certain lease pay - ments; • enhanced scrutiny of transfer pricing arrange - ments; and/or • denial of the participation exemption for dividends from companies in low-tax jurisdictions outside the EEA.
Norway also follows EU and OECD guidance on non- cooperative jurisdictions, and may apply defensive measures consistent with those frameworks. 5.4 Reporting Obligations and Disclosure Regimes Norway has implemented a comprehensive frame - work of reporting obligations to detect and prevent tax fraud, tax evasion and/or tax avoidance, including the following: • Individual tax residents must submit a comprehen - sive tax return detailing global income and wealth. • Companies are required to file detailed corporate tax returns. • Companies are required to maintain accounting data in a standardised digital format (SAF-T), which streamlines tax audits and enables the detection of irregularities. • Norwegian companies and Norwegian-registered branches (NUF) are required to register beneficial ownership. • Norwegian companies are required to submit an annual shareholder register return ( aksjonærregis- teroppgaven ) to the Tax Administration, reporting details of the company’s shareholders, changes in share ownership, distributions of dividends and other relevant equity transactions during the income year. 5.5 Role of Tax Authorities and Enforcement Measures The Tax Administration has broad powers to investi - gate suspected tax fraud and non-compliance: • Access to information and records: The Tax Admin - istration can require taxpayers, third parties and financial institutions to provide information and documents relevant to tax assessments. • Audits and inspections: The Tax Administration may conduct desk audits and field audits of tax - payers. • Unannounced visits: Tax authorities may conduct unannounced inspections of business premises, though certain procedural safeguards apply. • Searches: In serious cases of suspected tax fraud, searches ( ransaking ) may be authorised by a court. These are typically carried out in co-ordination with
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