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Taxation in Norway
 
 
 

Business Taxation

The main taxes relevant to companies are the national income tax and the value added tax. Withholding taxes do not play a prominent role in the Norwegian tax system, as Norway does not levy such tax on interest or royalty payments made to residents or non-residents. A dividend withholding tax is imposed on distributions other than to corporate shareholders resident outside the EEA (unless an exemption is provided under a tax treaty).

Norway does not have the concept of branch profit remittance taxes or the like, and a distribution of branch profits is thus not subject to any tax.

Taxable Income and Rates

Corporations and branches of foreign companies pay a flat state (national) tax of 28% on net taxable income.
Petroleum companies granted a licence to explore and exploit petroleum resources on the Norwegian Continental Shelf face an additional flat-rate tax of 50% on income derived from the extraction and processing of petroleum resources and on pipeline transport.

Taxable Income Defined
Resident companies are taxed on worldwide income; non-resident companies are taxed only on Norwegian-source income. Residence is not defined in the tax legislation, but in practice a company is regarded as resident if incorporated under Norwegian law. Income from foreign sources is taxable, but foreign taxes paid are deductible (creditable) against Norwegian taxes on income from foreign sources if no other relief from double taxation is available under an applicable tax treaty. This deduction applies to foreign tax on the received income. A deduction for underlying foreign corporate tax relating to received dividends is available against Norwegian taxes on dividends received if the dividends are not exempt and the shareholder is a Norwegian corporation holding at least 10%. Branches of foreign corporations are taxed on Norwegian-source income, and deductions are the same as those for locally incorporated firms. Taxable income includes ordinary business income, interest, gains on foreign currency and royalties. Dividends and capital gains derived from shares in resident companies are tax-exempt for Norwegian companies. Dividends and capital gains arising from participations in companies resident in the European Economic Area (EEA) also are exempt; if the participation is in a non-EEA country, an exemption is available only if the Norwegian recipient holds at least 10% of the share capital and at least 10% of the voting power. If shares in non-EEA companies are sold leaving ownership at less than 10% before two years elapse, a distribution initially exempt will be recaptured.


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