Tax Controversy 2026 Comparisons

The Norwegian tax system is based on a self-assessment principle, meaning that taxpayers are responsible for calculating and reporting their own tax liability in the annual tax return. Tax controversies in Norway typically arise through reassessments issued by the tax authorities following a review of the taxpayer’s self-assessment.

Such reviews may be initiated by an audit conducted by the tax authorities, which may be limited to specific items in the tax return (eg, certain intra-group transactions). The tax authorities may also initiate investigations based on information received through international exchange of information mechanisms or discrepancies identified in submitted tax returns.

The Norwegian tax authorities use a risk-based approach to audits, meaning that higher-risk areas are generally subject to more thorough scrutiny. The risk assessment takes into account the taxable amounts involved, the complexity of the underlying facts and the complexity of the applicable tax rules.

While the specific selection criteria are not publicly disclosed, the following categories of taxpayers are generally subject to increased scrutiny.

The Special Tax Regimes

Companies subject to the resource rent taxation regimes (with additional special tax for petroleum, hydropower, onshore wind and aquaculture) or the tonnage tax regime are subject to special scrutiny. For example, Norway has a separate Oil Taxation Office (within the Tax Administration) that is responsible for the taxation of companies that engage in E&P activities on the Norwegian continental shelf.

Large Enterprises

Companies with significant revenues, complex structures or substantial cross-border transactions are more likely to be audited. The Tax Administration has dedicated units for auditing large enterprises.

High-Net-Worth Individuals (HNWIs)

Individuals with substantial assets or income, particularly those with foreign holdings or complex financial arrangements, are subject to enhanced monitoring. Following the migration of many HNWIs from Norway, it is anticipated that tax residency and exit tax will be additional focus areas going forward.

Transfer Pricing

Multinational enterprises with significant intercompany transactions are regularly audited on transfer pricing matters — particularly where one of the parties is tax-resident abroad or subject to a special tax regime. The Norwegian Tax Administration has a specialised transfer pricing unit.

Information-Driven Selection

Audits may be triggered by information received through, eg, international exchange of information mechanisms, discrepancies in reported data, VAT returns with significant negative values or tips from third parties.

Random Selection

Some audits are conducted at random to maintain general compliance and gather statistical data.

One of the most effective preventive measures to mitigate tax controversy is to obtain binding advance rulings from the tax authorities. This mechanism allows taxpayers to request an official determination of the tax consequences of a planned transaction before it is carried out. The tax authorities will issue a binding ruling on how the arrangement (as described by the taxpayer) will be treated for tax purposes. Provided that the taxpayer executes the transaction as described in the application, the authorities are bound by the tax treatment set out in the ruling upon the taxpayer’s request.

Binding advance rulings are not, however, available in respect of evidence assessment, valuation or other discretionary assessments. An exception applies to intra-group sales of natural gas, for which the Oil Taxation Office has a special legal basis to issue binding rulings.

The binding advance ruling mechanism is fundamentally preventive, resolving potential disputes before they arise by establishing certainty upfront.

The tax authorities are also subject to a statutory duty to provide guidance to taxpayers. Under these provisions, taxpayers are entitled to receive guidance on completing tax returns and complying with their tax obligations. By proactively seeking such guidance, taxpayers can clarify ambiguous situations and reduce the likelihood of taking positions that might later be challenged. Such guidance, however, will not be binding on the tax authorities.

For transfer pricing matters, taxpayers may seek bilateral or multilateral advance pricing agreements (APAs) with the Norwegian and foreign tax authorities. A prerequisite is that Norway has concluded a tax treaty with the other country or countries involved. While the APA process can be time-consuming, it provides certainty regarding the pricing of intercompany transactions for a specified period.

Norway has implemented the BEPS recommendations to combat tax avoidance, inter alia, by introducing country-by-country reporting rules corresponding to Action 13 of the OECD BEPS Action Plan. The purpose of these rules is to enable the tax authorities to prepare risk analyses for audit purposes. Country-by-country reporting cannot, however, be relied upon as the sole basis for a tax reassessment. Norway’s implementation of BEPS Action 13 meets the minimum standard according to the latest annual peer reviews.

Norway is not a member of the European Union (EU) and accordingly, the recent EU measures to combat tax avoidance are not directly applicable to Norwegian taxpayers.

To our knowledge, the BEPS recommendations and the EU’s recent measures to combat tax avoidance have not had a material impact on the volume or nature of tax controversies in Norway.

The general rule is that a tax liability must be paid when due, even if the assessment is being appealed or brought before the courts. For example, if a taxpayer has declared tax of NOK100 and the tax authorities issue a reassessment increasing the liability to NOK125, the additional NOK25 (plus interest) must be paid regardless of whether the taxpayer decides to challenge the reassessment.

It is possible to apply for a deferral of payment, usually on the condition that the taxpayer provides a guarantee or other security. However, our experience is that the tax authorities are restrictive in granting such deferrals and where a deferral is accepted, late-payment interest will typically apply, making it very costly.

If the tax authorities impose an additional surtax (surcharge) as a penalty for incorrect or insufficient information provided by the taxpayer, this surcharge does not fall due for payment until three weeks after the expiry of the appeal deadline or after the appeal has been decided.

Taxpayers who fail to pay tax on time will be charged interest on the outstanding amount from the due date until payment is made.

Individuals contributing to tax evasion may also be subject to criminal prosecution.

Tax audits may be initiated against any Norwegian taxpayer. In selecting which taxpayers to audit, the Norwegian tax authorities apply a risk-based approach, see further 11.2 Judicial Court Fees.

An audit may be conducted by way of written information requests directed to the taxpayer and/or third parties (desk audit) or by way of an on-site inspection, eg, at the taxpayer’s business premises, see further 2.3 Location and Procedure of Tax Audits.

A tax audit may be initiated at any time by the tax authorities when they consider it necessary. There is no statutory time limit for the duration of an audit, which will depend on the scope of the investigation.

As a general rule, the time limit for amending a tax assessment is five years from the end of the relevant tax period. In cases involving aggravated additional surtax or violations of the criminal provisions on tax evasion, the time limit is extended to ten years.

The limitation period is interrupted when the tax authorities notify the taxpayer that the assessment is being considered for amendment. An audit, in itself, does not suspend the limitation period.

Norwegian tax law distinguishes between two principal forms of tax audit: Written information requests and on-site inspections conducted at the taxpayer’s premises.

These two methods constitute equal alternatives in principle, meaning that the tax authorities are not obliged to attempt to obtain information through written requests before conducting an on-site inspection.

Written information requests represent the most common form of audit. Under this procedure, the tax authorities request documents and information in writing, which the taxpayer must provide either electronically or in paper form. In practice, the majority of documentation is now submitted electronically.

On-site inspections may be conducted at the taxpayer’s business premises, where tax officials review books, records and other documentation on-site. The taxpayer is required to grant the authorities access to the relevant premises and to provide the necessary documents and information during the inspection.

The tax authorities cannot conduct on-site inspections at the taxpayer’s private home unless the inspection is related to a business the taxpayer operates from the home. However, the tax authorities may conduct on-site inspections at the taxpayer’s home if there are reasonable grounds for believing that the conditions for additional surtax are met and that evidence may be found there. Such an inspection is subject to a court order. The police may search the taxpayer’s home if there is suspicion of tax fraud.

Tax audits generally focus on the taxpayer’s overall tax compliance. For a description of the areas that are subject to particular attention, see 11.2 Judicial Court Fees.

Increased exchange of information between countries means the Norwegian tax authorities can collect more data to monitor tax compliance. It is accordingly considered that the tax authorities can uncover more errors than was previously the case. This has, in fact, been invoked as an argument for abolishing the safe harbour rules in Norway, which provide that a taxpayer may voluntarily disclose information to the tax authorities for prior income years and, in return, be exempted from additional surtax. Exchange of information may thus result in an increase in the number of audits and reassessment cases.

In our experience, there have been tax audits in which the Norwegian tax authorities have co-operated with tax authorities of other countries where the same company or group carries on business, raising similar tax issues across multiple jurisdictions.

Based on our experience, the following are the most important strategic points to bear in mind when navigating a tax audit.

Engaging Tax Lawyers

A tax lawyer may guide the taxpayer through the audit, including advising on what information to provide and how best to present it.

Formal Requirements

Verify whether the conditions for amending the assessment are legally satisfied and ensure that any formal notice contains sufficient information to enable the taxpayer to safeguard its interests properly. A challenge on procedural or formal grounds can be decisive before the substantive merits are even considered.

Identifying the Tax Authority’s Underlying Theory of the Case

The central strategic question is always: What is the tax office actually trying to establish through the way it has framed its questions? Understanding this is key to preparing an effective defence.

Transparency

Any response to the tax authority must be accurate in order to comply with the duty to provide relevant information and to avoid undermining the taxpayer’s credibility or incurring a risk of additional surtax.

Proactive Approach

The taxpayer should not only investigate the precise questions posed, but also identify the full factual picture, including circumstances the tax authority has not yet focused on. This should be done by gathering all available documentation (which may become inaccessible over time) and interviewing key employees (while they are still with the company). In appropriate cases, written witness statements offer a structured, controlled way to present factual evidence. Most tax cases are won on the facts, not the law and relatively few are decided purely on legal grounds. Investing heavily in establishing a compelling and well-documented factual record is almost always the most effective use of resources.

Engaging Independent Experts

For technically complex matters — such as transfer pricing, valuation or industry-specific issues — it may be prudent to engage an independent expert already at the response stage.

Deferring Legal Argumentation

It is often premature — and potentially counterproductive — to lead with legal submissions at an early stage. It is generally more effective to first establish a solid factual foundation before advancing legal arguments.

Lead with Best Arguments

Drop the weaker points: It is tempting to advance every possible argument, but weaker or “half-good” arguments tend to undermine the credibility of the stronger submissions.

Assertive Professionalism

Present the taxpayer’s position with conviction and clarity, whilst maintaining a professional, constructive and polite tone throughout. This approach is generally more persuasive, preserves a productive relationship with the authority and avoids unnecessary escalation.

The administrative tax procedure is typically initiated with an audit, followed by a notice of reassessment. Before the reassessment decision is made, the taxpayer is afforded the opportunity to submit comments and objections to the tax authorities.

If the taxpayer disagrees with the reassessment, the taxpayer may either:

• submit an appeal to the Tax Appeals Board; or
• challenge the reassessment directly before the courts.

In general, it is not required that the appeal procedure be exhausted before initiating court proceedings, but the tax authorities may, in exceptional cases, impose a condition that an appeal must be filed and decided before court proceedings can be brought. Any appeal decision from the Tax Appeals Board may also be challenged in the court system.

The deadline for submitting an appeal to the Tax Appeals Board is six weeks. The appeal is submitted to the tax authorities (in practice, to the same case handlers that issued the reassessment). If the tax authorities agree with the taxpayer’s argument, they may amend the reassessment. If not, the appeal and the tax authorities’ comments to the appeal will be sent to the Tax Appeals Board. The Tax Appeals Board is an independent body that cannot be instructed. The Board is supported by a dedicated secretariat staffed by case officers who prepare the case and provide a written recommendation as to how the appeal should be determined.

The Tax Appeals Board can try every aspect of the case and there is no limitation on the appellant’s right to invoke new factual circumstances or tax law interpretations that have not been presented in the tax return or during the tax reassessment. The right to invoke new factual evidence is a key consideration when determining whether the taxpayer should appeal the reassessment decision to the Tax Appeals Board or initiate judicial proceedings, as the right to present new evidence is more limited in court. Further, unlike the Tax Appeals Board, the courts will, as a main rule, not overturn a discretionary assessment as such (eg, valuations, including the specific pricing of an intra-group transaction).

There is no statutory deadline for the Tax Appeals Board to decide an administrative appeal. However, the overarching principle set out in the Tax Administration Act requires the authorities to resolve cases without undue delay. In practice, the Tax Appeals Board’s handling time frequently ranges from two to three years, a situation that has attracted considerable criticism.

Where the appeal process is unduly delayed, the taxpayer may lodge a complaint with the Parliamentary Ombud for Public Administration. However, the taxpayer cannot initiate judicial proceedings to expedite the process.

Lengthy case handling may reduce the amount of additional surtax levied. The amount is reduced by one and a half times the standardised court fee (NOK1,345 for 2026) per month if the case is not decided within a reasonable time. The rationale is that an additional surtax constitutes a criminal charge under the ECHR, giving rise to a requirement that a decision be rendered within a reasonable time (Articles 6 and 13).

Tax cases are heard by the ordinary courts in Norway.

Legal proceedings may be brought against either the tax authorities’ reassessment decision or the Tax Appeals Board’s decision, see 3.1 Administrative Claim Phase. The deadline for filing a writ of summons to the District Court is six months. This constitutes an absolute procedural requirement and non-compliance will result in dismissal of the claim, subject to the possibility of relief under the Norwegian Dispute Act.

As a general rule, it is not required that the administrative appeal procedure be exhausted before initiating legal proceedings (see 3.1 Administrative Claim Phase).

Legal proceedings concerning the validity of tax decisions are governed by the Dispute Act, which establishes the general procedural framework for civil litigation in Norway. In addition, judicial tax litigation is subject to the special rules set out in Chapter 15 of the Tax Administration Act.

Pre-Trial Preparation

Litigation is initiated by the taxpayer filing a writ of summons with the District Court. The tax authorities will thereafter file a statement of defence and the parties may also exchange additional pleadings.

After receiving the summons and the statement of defence, the court will invite the parties to a case management conference (CMC) to discuss procedural matters. In more extensive cases, several CMCs may be held.

Case preparation normally concludes three weeks before the main hearing. Thereafter, the introduction of new evidence or grounds for claims is restricted pursuant to the Dispute Act.

Main Hearing

The main hearing typically comprises:

• opening statements (including the presentation of written evidence);
• testimony from parties and witnesses; and
• legal closing arguments by both parties.

Decision

The District Court delivers a written judgment setting out its findings of fact, legal reasoning and conclusion.

The courts may review the validity of the administrative (appeal) decision. Accordingly, the courts will review both the facts and the law, but will generally not overturn a discretionary assessment as such (eg, valuations, including the specific pricing of an intra-group transaction). There are strict limitations to the taxpayer’s ability to introduce new facts and evidence after bringing the case to court.

Procedural errors by the tax authorities will only result in invalidation if there is reason to believe the error may have influenced the content of the decision.

A decision from the District Court may be appealed to the Court of Appeals and (in theory) to the Supreme Court (where very few cases are allowed to be heard).

Norwegian law applies two key principles governing evidence in court proceedings:

• free assessment of evidence – the court is free to determine which evidence is relevant and what weight should be accorded to it; and
• the principle of orality – the court’s decision may, as a main rule, only be based on evidence presented during the oral proceedings.

Although Norwegian law is founded on a principle of free assessment of evidence, Supreme Court case law has nevertheless established guidelines regarding the weight to be attributed to different types of evidence. Evidence that is temporally proximate to the taxable event will generally carry greater weight. Conversely, witness testimonies and expert reports that are internally inconsistent or contradictory and prepared in connection with the case will normally be afforded less evidential value.

Written evidence and the names of all witnesses, must be submitted to the court before the conclusion of case preparation (ordinarily three weeks before the main hearing). Witnesses testify during the main hearing (written statements alone are not permitted) and may be cross-examined by counsel for the opposing party.

Certain special considerations apply to the judicial review of tax decisions. The fundamental principle is that the court conducts its review on the basis of the same facts as those that existed before the tax authorities, since it is the validity of the decision itself that is under review.

As a general rule, the taxpayer may not present new factual evidence during court proceedings if the taxpayer was encouraged to provide it over the course of the administrative process. It is therefore essential that the taxpayer identifies all relevant factual circumstances before initiating legal proceedings.

In civil tax litigation, the allocation of the burden of proof is determined by general civil procedural rules. The principal rule is that the burden of proof rests with the party asserting that a particular circumstance exists. In practice, the court will base its decision on the most likely correct facts (established with a probability exceeding 50%).

Special evidential requirements apply to the imposition of additional surtax, as this constitutes a penalty within the meaning of ECHR Article 6, see 1.5 Additional Tax Assessments. The tax authorities must prove that the conditions are satisfied and do so by clear and convincing evidence (clear preponderance of probability).

For aggravated additional surtax and tax fraud, the threshold is further elevated to conform with criminal procedural standards, requiring proof beyond a reasonable doubt.

A critical strategic decision for taxpayers following a reassessment decision is whether to appeal administratively to the Tax Appeals Board or to bring the matter directly before the courts.

From a procedural efficiency perspective, direct judicial proceedings may be advantageous where rapid resolution is required, particularly given the often lengthy administrative proceedings. However, where the taxpayer needs to introduce new evidence or factual information, the case should generally proceed through the administrative appeal route, given the evidence limitation rules that apply in court proceedings (see 4.3 Relevance of Evidence in Judicial Tax Litigation). The same applies to cases raising discretionary assessments (typically pricing and other valuations), as the courts will generally not overturn these (unless they are based on incorrect facts or law).

In cases involving complex financial, accounting or technical matters, the strategic deployment of expert evidence can be decisive. In addition to expert testimony, the taxpayer routinely presents expert reports to substantiate its claim, especially in transfer pricing cases and other fact-sensitive issues.

During the administrative process, the tax authorities are not permitted to formally settle tax disputes. They are obliged to apply what they consider to be the correct interpretation of the law to what they consider to be the correct understanding of the facts. In rare situations, however, it may be possible to reach an informal settlement. This may arise in cases where the exact outcome, even when applying the tax authorities’ interpretation of the law and the facts is not obvious. An example is discretionary assessments in transfer pricing, where there is typically no definitive answer as to what an “arm’s length” price is. In such cases, it may be possible for the taxpayer to propose a discretionary assessment (more beneficial than that proposed by the tax authorities) and indicate that such an outcome will be acceptable.

Once a case has been brought before the courts, the tax authorities have somewhat more leeway and may, to a certain extent, enter into a settlement based on procedural risk. However, settlement discussions are generally reserved for cases in which a range of solutions may be “correct”. This may be relevant in, eg, transfer pricing disputes and other cases involving discretionary assessments (without a “one true answer”).

Decisions of Norwegian courts, in particular the Supreme Court, constitute an important source of Norwegian tax law. Lower court decisions (Courts of Appeal and District Court) carry less weight but may still be relevant, particularly where Supreme Court authority is lacking.

Regarding international jurisprudence, Norway is not a member of the EU and European Court of Justice (ECJ) decisions are therefore not formally binding on Norwegian courts. However, to the extent that Norwegian law mirrors European Economic Area (EEA) regulations (including the four freedoms), ECJ case law will be an important source of law. The European Free Trade Association Court (EFTA Court), which has jurisdiction over EEA matters and to which Norway is subject, is also of significant relevance.

Decisions from the European Court of Human Rights (ECtHR) are highly relevant, as the ECHR has been incorporated into Norwegian law through the Human Rights Act, with precedence over ordinary legislation. ECtHR case law on issues such as the right to a fair trial (Article 6), privacy (Article 8) and protection of property (Protocol 1, Article 1) is therefore directly applicable in Norwegian tax proceedings.

Norwegian courts do not treat foreign case law as binding. However, in international tax matters – particularly those involving the interpretation of double tax treaties modelled on the OECD Model – decisions from other jurisdictions are generally considered relevant sources of law.

Administrative opinions and guidance issued by the Tax Administration and the Ministry of Finance – including binding advance rulings (for other taxpayers), non-binding guidance letters and circulars – are regularly cited in litigation and carry considerable practical weight. Notably, the Supreme Court has stated that firm and long-standing administrative practice cannot be departed from to the taxpayer’s disadvantage – a change of practice must be effected through a change of law.

Legal tax literature is regularly cited by Norwegian courts and may support interpretations of the law. However, its formal weight is limited to the persuasiveness of its reasoning.

The OECD Model Tax Convention and its Commentaries are highly relevant in Norwegian courts when interpreting double tax treaties. As virtually all of Norway’s tax treaties are based on the OECD Model, the Commentaries are regularly invoked as an interpretive aid. The Norwegian Supreme Court has explicitly recognised the relevance of the OECD Commentaries in treaty interpretation and both courts and tax authorities routinely take them into account.

Norwegian law expressly incorporates the OECD’s arm’s length principle, including the OECD Transfer Pricing Guidelines as an authoritative source of interpretation. The tax authorities and courts routinely refer to the Guidelines in transfer pricing disputes.

Tax litigation commences in the District Court. The District Court’s decision may be appealed to the Court of Appeal (subject to certain conditions) and subsequently to the Supreme Court (subject to more restrictive requirements).

The time limit for filing an appeal to the Court of Appeal is normally one month from the date on which the District Court’s decision was formally received.

Leave to appeal to the Court of Appeal is required if the value of the subject matter of the appeal is less than NOK250,000 (approximately EUR20,000). Additionally, the Court of Appeal may refuse leave to appeal if it considers it clearly more probable than not that the appeal will not succeed.

The Court of Appeal conducts a full review of both factual findings and legal issues in the same way as the District Court.

The Supreme Court serves as the final appellate instance, but very few cases are heard each year. A general requirement for leave to appeal applies to all cases before the Supreme Court. Leave is granted only where the appeal concerns issues of importance beyond the individual case or where there are other reasons why it is particularly important to have the case decided by the Supreme Court. The restrictive nature of this requirement is illustrated by the Supreme Court’s caseload: in 2025, it decided 45 civil cases, of which only 2 concerned civil tax or VAT matters.

Appeal to the Court of Appeal

The appeal procedure before the Court of Appeal follows the same general structure as the District Court process, see section 4.2 Procedure for Judicial Tax Litigation.

Appeal to the Supreme Court

The procedure for appealing to the Supreme Court differs significantly from that applicable to the Court of Appeal and comprises the following stages.

Consideration by the Appeals Committee

The appeal is first considered by the Appeals Committee of the Supreme Court, which determines whether the case satisfies the criteria for leave to appeal (see 5.1 System for Appealing Judicial Tax Litigation).

Preparation phase

If the Appeals Committee grants leave to appeal, the case enters a preparation phase similar to that applicable in the Court of Appeal, during which the parties prepare their submissions and evidence.

Hearing before the Supreme Court

The Supreme Court may conduct either an oral hearing or determine the case on the basis of written proceedings, depending on the nature and complexity of the issues involved. The hearing before the Supreme Court focuses on the parties’ legal arguments. Oral testimony is not permitted in the Supreme Court.

Decision

The Supreme Court renders its final judgment, which is binding and represents the conclusive resolution of the legal dispute.

In civil tax cases, the District Court is ordinarily constituted by a single professional judge. In rare cases, the chief justice of the District Court may also decide that the court shall sit with three professional judges at the main hearing.

At the request of the parties, the professional judge(s) may also be supplemented by two lay judges (without a legal background) or two expert lay judges (subject matter experts without a legal background).

The Court of Appeal is ordinarily constituted by three professional judges, who may be supplemented with lay judges or expert lay judges.

The Supreme Court ordinarily sits with five professional judges. In cases of exceptional importance, the court may convene as an expanded panel of eleven judges or sit in plenary session. The Supreme Court is composed exclusively of professional judges and does not employ lay judges.

No alternative dispute resolution mechanisms – such as mediation or arbitration – are available in Norwegian tax proceedings. For MAP arbitration, see 10. International Tax Arbitration Options and Procedures.

However, in rare cases, the tax authorities may be willing to engage in settlement discussions through direct negotiations with the taxpayer; see 4.5 Strategic Options in Judicial Tax Litigation.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

Binding advance rulings are explained in 1.3 Avoidance of Tax Controversies.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

However, Norway has implemented MAP/APA mechanisms in most of its tax treaties, which may be relevant to transfer pricing cases (see 8. Cross-Border Tax Disputes and 10. International Tax Arbitration Options and Procedures).

If the Norwegian tax authorities identify grounds for amending a taxpayer’s self-assessment, administrative or criminal tax offences will not automatically be invoked. Additional surtax and/or criminal charges will apply only if the taxpayer fails to fulfil its duty to provide correct and complete information. Even where the obligation to provide complete and accurate information has been breached, certain exemptions apply to the tax authorities’ right to impose additional surtax, the most significant being obvious calculation or typing errors.

An additional surtax of 20% of the tax benefit may be imposed in ordinary cases, reduced to 10% where third parties are required to provide the same information. An aggravated additional surtax of either 40% or 60% (in total) may be imposed where the taxpayer has provided incorrect or incomplete information intentionally or with gross negligence.

Criminal prosecution for tax fraud constitutes an alternative to the imposition of an aggravated additional surtax.

Administrative and criminal tax offences are two separate tracks that may be pursued where the taxpayer has provided inaccurate or incomplete information to the Norwegian tax authorities that has or could have, resulted in a tax benefit.

Cases concerning additional surtax are handled by the Norwegian tax authorities, normally in parallel with the underlying reassessment case.

Cases concerning tax fraud are investigated by the Norwegian Prosecuting Authority. The Norwegian tax authorities will typically conduct initial investigations and, where warranted, report the case to the Norwegian Prosecuting Authority for criminal investigation.

As an additional surtax is considered a criminal charge under the ECHR, the authorities cannot, as a main rule, impose both sanctions, as this would constitute a double penalty for the same offence. The punitive sanction – whether additional surtax or criminal conviction – that first becomes final and binding will preclude the imposition of the other.

A reassessment case is typically initiated by the Norwegian tax authorities by way of a tax audit. If the audit reveals that the taxpayer has failed to fulfil its duty to provide correct and complete information, the tax authorities will consider whether to impose sanctions, ie, additional surtax. Where the taxpayer’s conduct is of an aggravated nature, the Norwegian tax authorities may report the case to the Norwegian Prosecuting Authority for criminal investigation.

The administrative process for additional surtax follows the same procedural stages as the reassessment process, see section 3.1 Administrative Claim Phase. The legality of an additional surtax will normally be decided by the same court that determines the legality of the corresponding tax adjustment or assessment, provided that the taxpayer challenges both in the same proceedings.

An upfront payment of additional tax will not entitle the taxpayer to a reduction of additional surtax applicable to the corresponding tax offence. Correspondingly, such a payment will not normally result in a reduced penalty in a criminal case. However, no late-payment interest will be imposed on amounts paid upfront.

If an additional surtax imposed by the tax authorities is not challenged in court, no (civil) trial will take place.

It is not possible to pay the tax assessed, plus interest and penalties or to enter into an agreement with the tax authorities or the public prosecutor in order to prevent or discontinue a criminal tax trial. Plea bargaining and similar negotiations with the public prosecutor are generally not permitted in Norway. However, Norwegian criminal procedure provides for a system of simplified judgment based on confession.

A first-instance court decision in a criminal tax case may, subject to certain conditions, be appealed to the Court of Appeal and subsequently to the Supreme Court.

The imposition of additional surtax and criminal charges in cases involving the GAAR, SAARs, transfer pricing rules and other anti-avoidance rules is rare in Norway. In a criminal case, the Supreme Court has stated that a taxpayer is not obliged to inform the tax authorities of the tax motivation underlying a transaction. Tax motivation is a criterion for applying the GAAR.

In Norway, domestic litigation is the standard initial response to an additional tax assessment, including in cross-border situations.

MAP is also available under most of Norway’s tax treaties and is administered by the MAP/APA Section of the Tax Administration.

Taxpayers may pursue domestic appeals and MAP simultaneously, as the two processes are not mutually exclusive and as such:

• where a taxpayer who has requested MAP has also filed an appeal to the Tax Appeals Board, the taxpayer may, as a main rule (in cases not involving petroleum tax), choose whether the appeal or the MAP is to be conducted first; and
• where a taxpayer who has requested MAP has also brought the case before the ordinary courts, the taxpayer must choose whether to proceed first with the court proceedings or with MAP (the Norwegian CA will not accept a mutual agreement that conflicts with a domestic court decision in the case concerned).

The domestic anti-avoidance rules (GAAR and SAARs) are applicable in cross-border situations.

Where the cross-border situation is covered by a bilateral tax treaty, it must be assessed on a case-by-case basis whether such application of the domestic rules is in breach of the tax treaty. It is anticipated that the PPT and the amendment to the DTT preambles will make it easier for the courts to operationalise this assessment. Where the conditions for applying the GAAR are met, the conditions under the PPT will often, but not always, also be satisfied.

In Norway, international transfer pricing adjustments are primarily challenged through domestic court proceedings. The taxpayer may simultaneously apply for a MAP, see 8.1 Mechanisms to Deal With Double Taxation.

The Norwegian tax authorities are not required by law to make corresponding adjustments in response to transfer pricing adjustments made by other states. To avoid the double taxation that would otherwise arise, the taxpayer may apply for a MAP to be initiated.

Norway accepts bilateral and multilateral Advance Pricing Agreements (APA) provided that Norway has concluded a tax treaty with the relevant country(/-ies) and that the applicable tax treaty(/-ies) contains a MAP provision.

The APA process is initiated by the taxpayer contacting the Norwegian CA. The taxpayer will then present its case at a pre-filing meeting with the CA. The APA application has been submitted to all concerned countries. The CAs will review the application and request additional information if necessary. The application is either admitted into the APA programme or rejected. If accepted, the CAs will discuss and agree on the terms of the APA, including the transfer pricing method to be applied. The agreed APA is then presented to the taxpayer, who may accept or decline it.

Unilateral APAs are not available in Norway. However, for intra-group sales of natural gas, the Oil Taxation Office has a special legal basis to provide binding advance rulings upon request.

Cross-border situations give rise to disputes in Norway, notably regarding transfer pricing, permanent establishments and withholding tax. Following the migration of many HNWIs from Norway in recent years, it is anticipated that tax residency and exit taxation will become additional focus areas going forward, leading to an increased number of disputes in this area.

Clarifying case law, binding advance rulings and APAs may all help mitigate such litigation.

Norway is not part of the EU. However, similar state aid rules are covered by the EEA Agreement. Thus, state aid disputes are equally relevant to Norway.

The most notable fiscal state aid dispute in Norway concerned the former rules on cash refund of the tax value of petroleum exploration costs. An environmental organisation argued that the rules constituted unlawful state aid. The EFTA Surveillance Authority (ESA), however, found that the measure did not constitute state aid within the meaning of Article 61(1) of the EEA Agreement.

In our experience, the state aid rules are sometimes invoked by tax authorities as a supporting argument, eg, for interpreting a provision on deductions restrictively, on the basis that the taxpayer’s interpretation would result in unlawful state aid.

If ESA finds that Norway has provided unlawful fiscal state aid, the Norwegian state must recover the aid from the taxpayer(s) concerned. ESA has the authority to order repayment of unlawful state aid up to ten years after it was granted.

The ordinary deadlines for amending a taxpayer’s tax assessment (five or ten years, see 2.2 Initiation and Duration of a Tax Audit) do not apply to the recovery of fiscal state aid pursuant to an ESA decision, which is subject to a ten-year deadline.

Recovery of unlawful fiscal state aid by the taxpayer is normally not an issue in Norway. A taxpayer may, however, if disagreeing with the decision, challenge the decision in court.

We are not aware of any cases of refunds following subsequent litigation against the state invoking extra-contractual civil liability.

Until recently, arbitration clauses corresponding to Article 25(5) of the OECD Model Tax Convention had not been included in Norway’s DTTs and the majority of Norway’s DTTs still do not contain an arbitration clause. The newer and renegotiated tax treaties that include an arbitration clause contain a clause corresponding to Article 25(5) of the OECD Model Tax Convention. The decision to include such clauses is made on a case-by-case basis. Norway has accordingly made a reservation to the arbitration provisions in Part VI of the MLI.

Some of the probable reasons for Norway’s reservation to the mandatory arbitration clause are:

• a concern that the so-called norm price system for petroleum could become subject to arbitration (arbitration clauses in Norway’s DTTs accordingly contain reservations in respect of cases concerning norm prices (see section 10.2 Types of Matters That Can Be Submitted to Arbitration)); and
• concerns regarding the possible effect on tax revenue.

See Bjerke, Davidsen and Kristoffersen in Maisto (ed.), Dispute Resolution under Tax Treaties and Beyond (2023), pages 968–969, for further details on arbitration clauses and the reasoning for not including them in all Norwegian tax treaties.

Norwegian DTTs containing arbitration clauses generally adhere to the OECD Model. However, reservations are made in respect of cases concerning norm prices pursuant to the Norwegian Petroleum Tax Act, abusive transactions, domestic anti-avoidance cases and any other cases where the CAs of the respective states agree that the case is not suitable for arbitration.

The Norwegian CA will presumably opt for baseball arbitration, ie, a procedure in which each party presents its final offer and the arbitrators decide in favour of one of the two offers. This is evidenced by Norway’s agreement on the procedural rules regarding arbitration with Switzerland and the fallback mechanism in the MLI.

Norway is not a member of the EU and has made a reservation to the MLI on arbitration clauses.

Most disputes under DTT procedures are resolved through MAP. Arbitration is a relatively new mechanism in Norway and, to our knowledge, no arbitration proceedings under Article 25(5) of the OECD Model Tax Convention have been concluded in Norway. However, an arbitration was initiated with the Swiss CA, in which the parties agreed on procedural matters, but the substantive issues were not arbitrated, as the underlying case was resolved before the arbitration concluded.

The OECD Pillar Two rules have been implemented in Norwegian law with effect from 1 January 2024. The Qualified Domestic Minimum Top-up Tax (QDMTT) is effective from 1 January 2025.

The OECD Pillar One Amount B, concerning baseline distribution activities, is incorporated in the OECD Transfer Pricing Guidelines as an appendix to Chapter IV. The OECD Transfer Pricing Guidelines – including new guidance – are generally regarded as a relevant source when applying the arm’s length principle in Norway. However, the Norwegian Ministry of Finance has stated that Amount B should not be given effect in Norway at present.

All interpretive MAP agreements are published. Other MAP agreements reached by the CAs that are deemed confidential are not made public.

Arbitration is a relatively new mechanism in Norway’s DTTs and has been included in only a limited number of them; thus, MAP remains the most commonly used tax treaty instrument for resolving cross-border tax disputes.

Under the agreement between Norway and Switzerland on the procedural aspects of DDT arbitrations, it is stated that:

• the arbitration panel shall consist of three individual arbitrators with expertise and experience in international tax matters; and
• the arbitrators must be impartial and independent of the competent authorities, tax administrations and ministries of finance of the contracting states and of all persons directly affected by the case (as well as their advisors) before, under and for a reasonable time after the proceedings.

No fees are payable to the tax authorities or the state in connection with disputing a tax matter at the administrative level.

Litigation in the Norwegian courts is subject to a minor court fee. The amount of the fee depends on the court instance and the duration of the proceedings, as outlined below.

• District Court: The entrance fee is five times the standardised court fee (currently NOK1,345 per unit) and covers the first day of the main hearing. The fee increases by three times the court fee for each additional court day up to and including day five and by four times the court fee for each court day from day six onwards. Special rules apply where the case is dismissed, settled, etc.
• Court of Appeal: The entrance fee is twenty-four times the court fee and covers the first day of the main hearing. The fee increases by three times the court fee for each additional court day up to and including day five and by four times the court fee for each court day from day six onwards. Special rules apply where the case is dismissed, settled, etc.
• Supreme Court: The fee structure is the same as for the Court of Appeal.

Court fees must be paid by the party filing a lawsuit or appealing a court decision. The unsuccessful party may be ordered to reimburse the court fee as part of the costs award.

A party that is not represented by counsel must pay the court fee in advance as a condition for the case to be heard.

Where misconduct on the part of the tax authorities has caused economic loss to the taxpayer, the taxpayer may claim damages from the state on the basis of ordinary principles of tort law. The fact that a court finds a tax reassessment decision to be invalid is not in itself a sufficient basis for claiming damages.

See 6. Alternative Dispute Resolution (ADR) Mechanisms.

Neither the courts nor the Norwegian tax authorities publish official statistics on the number of pending tax court cases or their value.

Neither the courts nor the Norwegian tax authorities publish official statistics on the number of tax court cases initiated and terminated each year for different taxes or on their value.

Neither the courts nor the Norwegian tax authorities publish official statistics regarding the party (tax authorities or taxpayers) that succeeds in litigation. It is our general impression that the tax authorities prevail in the majority of cases at the District Court and the Court of Appeal, while the outcomes are more evenly balanced in the Supreme Court.

See 2.6 Strategic Points for Consideration During Tax Audits and 4.5 Strategic Options in Judicial Tax Litigation.