Transfer Pricing 2023 Comparisons

Last Updated April 13, 2023

Law and Practice


Ernst & Young Advokatfirma AS fields one of Norway’s largest transfer pricing practices and Norway’s largest transfer pricing practice; hiring lawyers, auditors and economists and specialising in Norwegian and international taxation of corporations and individuals, transfer pricing, indirect taxes, customs and duties. The firm has approximately 20–25 people frequently working with transfer pricing-related matters, covering operating-model effectiveness, transfer pricing model design, controversy and dispute resolution. The transfer pricing team covers both lawyers and economists, serving a broad range of sectors and international clients. Ernst & Young Advokatfirma AS has a growing team focusing on tax controversy and dispute resolution, with several of the partners in the firm being admitted to the Norwegian Supreme Court and lawyers capable of acting as litigators for the firm’s clients. The firm houses further expertise in tax matters arising from corporate transactions, with growing experience in blockchain and cryptocurrency matters.

In Norway, the arm’s length principle is stated in the General Tax Act (GTA) Section 13-1, paragraphs 1–4. GTA Section 13-1 paragraph 4 explicitly refers to the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines (the “OECD Guidelines”) and states that the OECD Guidelines shall be taken into account in cases concerning transactions with parties subject to a double tax treaty with an arm’s length provision.

Norway’s double tax treaties are based on the OECD’s Model Tax Convention, and all of the double tax treaties have an arm’s length provision included. Thus, in practice, the OECD Guidelines are always used as a basis when the Norwegian tax authorities propose a reassessment of the transfer prices of a taxpayer.

The Norwegian arm’s length principle promulgated in GTA Section 13-1 provides that where the income of a Norwegian taxpayer (“taxpayer”) is reduced as a result of its transactions with related parties, the Norwegian Tax Administration (NTA) may discretionarily reassess the taxable income of the taxpayer. In order for the NTA to reassess a taxpayer’s taxable income, the following three conditions must be met in accordance with GTA Section 13-1 paragraph 1.

  • There must be a direct or indirect community of interest between the parties involved in the transaction.
  • There must be a reduction of the taxpayer’s income or wealth.
  • The reduction in income or wealth must be due to the relationship (ie, the community of interest) between the parties. This is a requirement of causality.

The NTA bears the burden of proving that the three above-listed conditions are met, and that the taxpayer’s income or wealth has been reduced as a result of its transfer prices in transactions with related parties. Once the NTA has discharged this burden, the burden of proof is put on the taxpayer to prove otherwise.

The Role of the OECD Guidelines in Arm’s Length Assessment

In the Supreme Court’s ruling in Agip (Rt 2001 page 1265), the Supreme Court established that the arm’s length principle promulgated in what was then GTA Section 54 (now GTA Section 13-1) was aligned with the arm’s length principle expanded upon in the OECD Guidelines, and that the OECD Guidelines were more precise in explaining the content of the arm’s length principle than GTA Section 54. Consequently, from a legal perspective, there would be no restrictive or overly broad interpretation of GTA Section 54 by considering the OECD Guidelines in the arm’s length assessment. Following this ruling and the proceeding practice, it is clear that the OECD Guidelines are given an essential role in transfer pricing cases.

There are no additional regulations in Norway which expand upon the arm’s length principle and its applicability in specific cases (except for transfer pricing documentation rules which are incorporated in the regulations to the Norwegian Tax Assessment Act of 2017).


In administrative practice, the Directorate of Taxes prepares an annual tax handbook (Skatte-ABC) for use by the tax officers within the Norwegian Tax Administration. The tax handbook has for several years had specific sections related to transfer pricing and certain topics. However, the tax handbook presents no deviating guidelines compared to the OECD Guidelines. As such, it could be viewed as a brief summary of topics considered important by the tax authorities in their work with transfer pricing. The tax handbook has limited standing as legal precedent and is rarely used as a legal source in transfer pricing cases.

The arm’s length principle which today is promulgated in GTA Section 13-1 was originally incorporated in the former Norwegian Tax Law in 1911. In the following decades, the specific statute encompassing the arm’s length principle was subject to many technical revisions; however, the material content of the arm’s length principle remained unchanged.

The arm’s length principle originally incorporated in the Tax Law in 1911 has, in itself, not been subject to any major changes, but the interpretation and application of the arm’s length principle has evolved over the years, heavily influenced by the developments in early court cases and the OECD Guidelines.

Today, GTA Section 13-1 paragraph 2 contains a special rule which effectively shifts the burden of proof from the tax authorities to the taxpayer, in cases where the counterparty to the transaction is resident in a state outside the European Economic Area (EEA). The special rule leads to a presumption of income reduction due to community of interest in certain cases. This special rule was incorporated in 2008.

Additionally, today’s rule in GTA Section 13-1 paragraph 4 was also incorporated in 2008, with the purpose of formalising the OECD Guidelines’ applicability and status in Norwegian tax law. This change did not alter the position of the OECD Guidelines following the Agip ruling of the Supreme Court, as discussed in 1.1 Statutes and Regulations.

The arm’s length principle in Norway applies for both domestic and cross-border transactions between related parties. In domestic transactions, where both parties are subject to tax within the ordinary tax regime, there would normally be no interest for the tax authorities in reassessing the transfer prices (unless potential VAT could be a relevant subject). However, Norway also has special tax regimes: tonnage taxation and oil taxation. Domestic transactions between a taxpayer in the ordinary tax regime and a taxpayer within a special tax regime are at risk of further scrutiny.

GTA Section 13-1 does not contain any definition of “community of interest” (or related parties). Following the transfer pricing documentation requirements in the Norwegian Tax Administration Act (NTAA) Section 8-11 paragraph 4, related parties are defined as entities or establishments that are, directly or indirectly, at least 50% owned or controlled. However, in GTA Section 13-1 there is a more flexible test as to whether the parties to the transaction are in a community of interest.

A “community of interest” does not need to be established through common ownership of more than 50% or the majority of voting rights. Depending on the specific facts of the case, a community of interest may also be established due to a long-standing contractual relationship between the parties which could make them dependent on each other, or in situations where a creditor is in a position with power to influence the decisions of the taxpayer. Whether a “community of interest” does in fact exist must be assessed on a case-by-case basis.

There is no specific guidance in Norwegian tax or case law related to any one preferred transfer pricing method. The NTA accepts all methods described in the OECD Guidelines (ie, comparable uncontrolled price (CUP), cost-plus, resale minus, profit split and the transactional net margin method). 

The NTA’s general standpoint is that the standard OECD methods should be applied. This is not, however, a firm requirement. Other methods may be adopted if considered more appropriate based on the facts and circumstances surrounding a specific transaction. 

The NTA has not provided guidance on the hierarchy of transfer pricing methods, but generally adheres to the OECD Guidelines stating that where it is possible to locate comparable uncontrolled transactions, the CUP method is the most direct and reliable way to apply the arm’s length principle. Consequently, the NTA considers that in such cases the CUP method is preferable over all others. 

The NTA requires taxpayers to demonstrate and document that the transfer prices applied are at arm’s length but does not explicitly require the use of ranges or statistical measures. The applicable principles for the arm’s length range in Norway follow the guidance provided in the OECD Guidelines paragraph 3.55 to 3.66.

Comparability adjustments are required in line with the principles of the OECD Guidelines.

There are no specific regulations in Norwegian tax law related to transfer pricing of intangible assets. The NTA refers to the methodology and principles described in Chapter VI of the OECD Guidelines. 

The NTA adheres to the provisions and guidance in the OECD Guidelines’ Chapter VI on hard-to-value intangibles. In line with the OECD Guidelines, the NTA’s general position is that the costs incurred in the development of intangibles do not necessarily serve as a valid basis for arm’s length pricing of those intangibles.

Cost contribution arrangements as described in the OECD Guidelines are accepted in Norway. 

Year-end and retrospective pricing adjustments may be acceptable in Norway for a period of up to five years from expiry of the relevant income year. Following the implementation of the NTAA as of 1 January 2017, taxpayers are able to perform a self-adjustment for a period covering the past three years. For adjustments exceeding three years, a formal request must be submitted to the NTA.

It should, however, be noted that although adjustments of corporate income tax returns for prior years are permitted in Norway, there is no guarantee that the NTA will accept the adjustments. 

Norway has a relatively large double tax treaty network and since it signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) in June 2017, several existing tax treaties has been modified. All of the double tax treaties Norway has entered into with other countries contain special provisions for the exchange of information in tax matters.

Norway does not have any advance pricing agreement (APA) programme regulated in its domestic law. However, since approximately 2010, the NTA has engaged in APAs under the articles on mutual agreement procedures in the bilateral tax treaties Norway has concluded. The NTA has given notice that further growth in the number of APA initiatives and processes is one of its focus areas. APAs are normally available to Norwegian taxpayers; although they have had some momentum in recent years, the number of APAs initiated annually is relatively modest.

Unilateral rulings are only available for the sale of natural gas.

The MAP/APA Section in Norway is organised as a separate independent department within the NTA and has been delegated the authority by the Norwegian Ministry of Finance to enter into APAs with authorities in other countries. For MAPs related to taxpayers subject to the Norwegian Special Tax Regime on Petroleum Income, the competent authority is the Ministry of Finance.

Norway does not issue unilateral APAs. All APAs are entered into at a bilateral level between affected authorities.

The MAP and APA processes in Norway may in certain cases be co-ordinated. During a MAP process, the taxpayer may obtain clarification on the same issue for subsequent income years (ie, years not part of the MAP) for which tax returns have been submitted, if the actual conditions of the case are unchanged. Based on a formal request from the taxpayer, the MAP/APA department may agree to include such subsequent income years in the ongoing MAP process subject to approval from the competent authority in the other state.

Norway has not stated any specific limitations concerning eligibility of APAs. However, the MAP/APA Section may, based on their assessment of facts and circumstances in the request, decide not to pursue the process further.

There are no formal deadlines for applying for APAs in Norway. Unless the applicable double tax treaty includes specific rules regulating the deadline for an APA application, a Norwegian taxpayer would normally have the possibility to file a submission for an APA on a contemporaneous basis.

The process normally starts with initial conversations between the taxpayer and the MAP/APA Section. During such conversations, the taxpayer and the MAP/APA Section discuss the case at hand and agree on the next formal steps to take. As part of the initial conversations stage, the MAP/APA Section would generally ask the taxpayer to present transfer pricing documentation and analyses related to its case and communicate their desired outcome for the APA.

APA processes in Norway are free of charge.

An APA in Norway would normally cover a period of three to five years. During this period the taxpayer may be required to prepare documentation demonstrating that it is adhering to the APA as agreed.

There is no specific legislation on retroactive APAs in Norway. The MAP/APA Section may, however, agree to include a “roll-back” feature for the previous one to two years as part of the APA process, if requested by the taxpayer.

Norway has not implemented any specific penalties related solely to transfer pricing. Potential penalties are the same as those applied for the general tax regime in Norway, where a 20% penalty tax of the tax benefit that has or could have been achieved is imposed if incorrect or incomplete information has been provided to the NTA. In cases of gross negligence or intent from the taxpayer, an additional penalty of 20% or 40% may apply, resulting in a potential maximum penalty tax rate of 60%.

The NTAA states that transfer pricing documentation must be prepared on a contemporaneous basis. Transfer pricing documentation must be submitted within 45 days upon request from the NTA. As of today, the transfer pricing documentation must not be submitted annually within a specific date.

The documentation requirements are generally aligned with the OECD BEPS requirements. However, some additional local documentation requirements apply as well. The NTA accepts filing in the master file and local file format. In addition to the structure and information provided in BEPS Action 13, Norwegian transfer pricing documentation requires the following information.

  • A description of the group’s operational model.
  • A description of the industry, hereunder important competition parameters.
  • A brief historic description of the group, its business activities and any previously implemented reorganisations.
  • Financial information of the group and the local entity for the last three years, and an explanation for any major reduction in the local entity’s operating profits; this also include information concerning the turnover and operating profits/losses for the last three years of other enterprises in the group which the Norwegian company has had controlled transactions with during the income year.
  • In the case of centralised services within the group, one must explain the receiving entities’ expected benefit from the service; in the case of a cost-based allocation, one must explain the cost base, allocation ratio and any mark-up.
  • Transaction analysis, including a two-sided functional analysis and a description of the transfer pricing method (how the price is determined and how it is tested).
  • If no comparable transactions exist or it would be unreasonably difficult or costly to gather such information, the local entity may not include such a comparability analysis for a transaction.
  • A list of immaterial transactions that the local entity engaged in.

There are no direct penalties for non-compliance with transfer pricing documentation requirements as such, but the failure to meet the documentation requirements is likely to lead to a shift in burden of proof during a tax dispute in favour of the tax authorities. Furthermore, the general penalties for non-compliance in the NTAA may apply. As a main rule, these penalties may not amount to more than approximately NOK60,000 (50 times the court fee).

Norwegian taxpayers must provide information outlining their related party transactions in a statutory attachment to the corporate income tax return each tax year (form RF-1123).

Furthermore, in accordance with NTAA Section 8-11, Norwegian taxpayers are required to prepare compliant transfer pricing documentation, if they have intercompany transactions totalling more than NOK10 million, or have intercompany balances that exceed NOK25 million during the tax year.

The Norwegian documentation requirements do not apply to groups that on a consolidated basis have less than 250 employees, and either have revenue below NOK400 million or have a balance sheet total below NOK350 million at year-end.

Taxpayers exceeding the statutory thresholds to prepare transfer pricing documentation under Norwegian transfer pricing regulations are required to prepare transfer pricing documentation contemporaneously, and in accordance with the Norwegian transfer pricing documentation requirements in Section 8-11-4 to Section 8-11-13 of the NTAA.

The ultimate Norwegian parent entity of a group with an aggregate revenue of NOK6.5 billion in the year preceding the financial year is obliged to prepare and submit a country-by-country report in Norway; see NTAA Section 8-13. In certain specific cases, a secondary filing obligation can occur for subsidiaries in Norway. Subsidiaries resident in Norway and part of a group that is required to submit a country-by-country report should notify in the annual tax return which group company is to submit the country-by-country report and in which jurisdiction this group company is resident.

The Norwegian transfer pricing rules are aligned with the OCED guidelines (ie, there are no notable differences).

The NTA and the Norwegian courts adhere to the arm’s length standard and follow the OECD Guidelines regarding the application and the interpretation of the arm’s length principle. Thus, the Norwegian transfer pricing rules do not depart from the arm’s length principle.

The OECD BEPS Action 8-10 is implemented in the Norwegian transfer pricing legislation as a function of GTA Section 13-1(4), which makes explicit reference to the latest version of the OECD Guidelines. 

Following the OECD’s release of the BEPS Action points in 2015, the NTA has notably increased its attention on aligning transfer pricing outcomes with value creation. This has materialised in a steady increase of transfer pricing audits on topics concerning value-driving aspects of functions and decision-making. Further to this, the NTA has embraced the DEMPE (development, enhancement, maintenance, protection and exploitation) concept in connection with intangibles, especially with regard to topics concerning economic and legal ownership of intangibles.

The BEPS 2.0 initiatives have support across the political spectrum in Norway. Advisers in the Norwegian Ministry of Finance are actively participating in discussions at the OECD and preparing for the implementation of the measures in Norwegian law. In addition, a committee has recently reviewed the Norwegian tax system, and their report was published in December 2022. The committee did not put forward any specific suggestions based on BEPS 2.0, but suggested that measures to avoid profit shifting should be carefully considered. When it comes to the likely impact of the initiatives, the authors expect that Pillar 2 in particular will result in a higher tax cost and higher compliance costs for a relatively large number of multinationals. The higher compliance costs will likely apply even for companies that do not operate in typical low-tax countries. The Pillar 2 rules may also result in reduced incentives to operate in low-tax countries.

Norway has not implemented any specific regulations permitting structures where one entity bears the risk of another entity’s operations by guaranteeing the other entity a return.

Norway adheres to the principles, methodologies and interpretations of the arm’s length principle as described in the OECD Guidelines. The UN Practical Manual on Transfer Pricing may, at best, serve as a supportive source to the OECD Guidelines.

Norway has not implemented any specific safe harbour rules in its transfer pricing legislation.

Norway has not implemented any specific rules or regulations related to potential (local) savings that may arise from undertaking business operations in Norway.

Norway has not implemented any notable unique rules, regulations or practices applicable in a transfer pricing context. 

Norway has not implemented any specific requirements related to the co-ordination between customs valuation and transfer pricing.  However, the Norwegian Customs Authority has developed guidance in their report, Tollverdi og internprising, on the relationship between customs valuations and the OECD Guidelines on transfer pricing. 

A transfer pricing audit in Norway contains many stages. The audit normally starts with an examination of certain intercompany transactions or a restructuring of the taxpayer. The examination can be through the NTA’s request for additional information, or an examination and physical inspection at the premises of the taxpayer. The common practice is that the NTA issues a formal letter to the taxpayer requesting transfer pricing documentation for a defined period of years (normally the past two to three years) to be submitted. At this stage the taxpayer has 45 days to submit its transfer pricing documentation. The documentation can either be sent directly to the case worker appointed to the case or submitted trough the NTA’s software systems.

The NTA’s assessment of submitted transfer pricing documentation will generally be followed by a formal request for additional information from the taxpayer. The taxpayer has, as a main rule, a broad obligation to provide such requested information. The taxpayer is normally granted about 30 to 60 days to submit requested information. Extensions are normally granted.

Once an examination is performed, the NTA issues a notice of proposed reassessment. The taxpayer is given the opportunity to provide a response to this notice. The correspondence is written via formal letters. If the NTA retains its position after receiving the response letter from the taxpayer, the NTA will issue a draft decision of the formal reassessment, if requested by the taxpayer. The taxpayer is then again given the opportunity to provide a response to the NTA and the draft decision. Both with respect to the notice of reassessment and the draft decision, the taxpayer is normally granted three to four weeks for providing this response, and extensions are often granted if requested.

After the NTA has received the taxpayer’s response to the draft decision, the NTA will consider whether the response suggests that the draft decision should be withdrawn, adjusted or upheld. If the NTA retains its position in the draft decision, the NTA will issue a formal and final reassessment to the taxpayer. The taxpayer then has six weeks to appeal this reassessment, or six months to bring a lawsuit against the reassessment.

Once the formal reassessment is made, the NTA will effectuate the income adjustments in their systems. Consequently, the taxpayer will – either simultaneously with or shortly after receiving the formal reassessment – receive a revised computation of the tax payable and information for payment. The tax is due within three weeks after the computation is received by the taxpayer, and the tax must be paid regardless of whether the taxpayer has appealed the reassessment or brought the reassessment before the courts.


When the formal reassessment is made by the NTA, the taxpayer has the choice between appealing the decision to the national Tax Appeal Board or to bring the decision directly to the courts. If the decision is appealed, the Secretariat of the Tax Appeal Board will prepare the case and send the proposed draft decision to the taxpayer for remarks. Once remarks are provided, the case will be forwarded to the members of the Tax Appeal Board for a final decision, which will represent the decision of the NTA in the case. The final decision by the Tax Appeal Board can be brought before the courts within six months. If the taxpayer does not appeal but brings the tax office’s formal reassessment to the court, the court will only be able to try the legality of the assessment (correct facts, correct understanding and application of the law, procedural rules, etc). The Tax Appeal Board, however, has full competence to try all sides of the case, including discretionary elements.

Once the case is in the court system, it will first be decided in the District Court (the specific court depending on the region). Following the decision by the District Court, the case can be appealed to the Court of Appeal. After the Court of Appeal’s decision, the decision can be appealed to the Supreme Court; however, it is rarely the case that transfer pricing cases are allowed into the Supreme Court.

The period from the NTA’s request for transfer pricing documentation to the issue of a formal reassessment normally takes about two to five years, and the process is generally conducted through formal, written communication.

It is largely not possible to make generalisations regarding judicial precedent in transfer pricing cases. Transfer pricing cases are very sensitive to the specific facts, and thus former court cases do not necessarily provide much guidance or many principles to abide by in following cases. However, with reference to the general legal principle that similar cases should be treated equally, courts will often consider how certain transfer pricing issues have been previously addressed in similar cases and whether the former case may have some judicial precedent and serve as a basis for the court’s decision.

Under the jurisprudence on legal interpretation and methodology, it is often stated that decisions by the District Courts and the Court of Appeal do not have legal normative powers and that decisions from these instances have relevance only in so far as the arguments are valid. Decisions from the Supreme Court will, however, provide precedent for future cases. This holds especially true in cases where the Supreme Court has elaborated on the general understanding of a rule or principle. In transfer pricing cases, this would often be statements on the general understanding of principles described in the OECD Guidelines.

There have been quite a few transfer pricing cases considered by the Norwegian Supreme Court. Most of the transfer pricing cases brought into the court system are decided in the District Courts or the Court of Appeal. The judicial precedent of the District Courts’ and the Court of Appeal’s decisions are limited, but they do, however, provide basis for certain arguments and reasoning which could be of relevance in similar cases. Some of the principal court rulings are discussed below.

The Agip Ruling (Rt 2001 page 1265, Supreme Court)

Please refer to 1.1 Statutes and Regulations for discussion of the implications of this case.

The Baker Hughes Ruling (Rt 1999 page 1087, Supreme Court)

This was on the question of whether the rental price for physical equipment was arm’s length, and also whether a significant deviation in the taxpayer’s reported transfer price and the reassessed arm’s length price constituted incorrect information in relation to the formal rules on the statute of limitations.

The Telecomputing Ruling (Rt 2010-790, Supreme Court)

This was on the question of whether an intercompany loan from a Norwegian taxpayer to a US subsidiary could be reclassified to equity under the arm’s length principle in GTA Section 13-1. This would entail that the Norwegian taxpayer would not be allowed to deduct the loss realised on the receivable owed by the subsidiary. The Supreme Court concluded that there were legitimate business reasons for the loan transaction, and thus that it was not possible to recharacterise the loan.

The Statoil Ruling (Rt 2007 page 1025, Supreme Court)

This was on the question of whether an interest-free loan from a Norwegian taxpayer to a related party was arm’s length or whether it was arm’s length to calculate an interest rate. The court concluded that the subsidiary did not have any loan capacity and it was not arm’s length to allocate the loan capacity of the subsidiary between the different intercompany lenders.

The Cytec Ruling (UTV-2007-1440, Court of Appeal)

This was on the question of whether intangible property was transferred in a business restructuring without sufficient compensation. In 1998, Cytec bought Dyno’s 50% ownership in Cytec Norway for a total consideration of NOK420 million, making Cytec Norway 100% owned by Cytec. After the acquisition, Cytec Norway was restructured in 1999. The Court of Appeal performed a delineation of the restructuring arrangement to establish the most plausible facts, based on presentations from the company and the tax authorities. Based on the facts and circumstances presented, the court concluded that all the intangibles previously residing in Cytec Norway were transferred without corresponding compensation. To set the value of the transferred intangibles, the court accepted the tax authorities’ approach by using the acquisition price of Cytec Norway; ie, Cytec’s NOK420 million payment for Dyno’s 50% ownership, as a CUP adjusted for assets and value not considered transferred.

The Normet Ruling (UTV-2019-363, Court of Appeal)

This was on the question of whether a business restructuring containing a transfer of intangible property and shares was arm’s length. The dispute concerned the allocation of values between the transferred intangible property (gains were taxable) and the transferred shares (gains were tax-exempt). The NTA argued that the third-party acquisition price represented a CUP which, with minor adjustments, could be used to set the price of the IP and the shares. Additionally, the taxpayer’s valuation of the IP was claimed to be non-compliant with the arm’s length principle. The court concluded that the NTA’s approach was in line with the arm’s length principle and that the acquisition price could be used as a CUP.

Norway has not implemented restrictions on outbound payments to uncontrolled parties (ie, third-party transactions).

In 2021, Norway introduced withholding tax on interest, royalties and lease payments from a Norwegian company or branch to foreign related entities in low-tax jurisdictions. From 1 July 2021, withholding tax could be levied on interest and royalty payments to a related party in a low-tax jurisdiction. From 1 October 2021, withholding tax could be levied on lease payments for certain tangible fixed assets paid to related parties in a low-tax jurisdiction.

Under the rules, the parties are related if one company owns the other party directly or indirectly with at least 50%, or if the companies are subject to common ownership or control with at least 50%. Whether the receiving entity is resident in a low-tax jurisdiction shall be assessed in accordance with the controlled foreign corporation (CFC) rules in the GTA. Generally, a jurisdiction is considered to be “low-tax” if the effective taxation of the company in that jurisdiction is less than two thirds of the effective taxation that type of company would be subject to had it been resident in Norway.

For all the transactions listed above, the withholding tax rate is 15% on the gross amount. However, this rate could be subject to a reduction following the applicable double tax treaty.

With respect to the payment of the withholding tax, it is the Norwegian company or branch as the payee that is obliged to deduct the withholding tax and pay the tax on behalf of the foreign related party. The Norwegian company or branch withholding the tax levied can be responsible to cover the tax liability if the deducted amount is not sufficient.

Norway does not have any specific rules regarding the effects of other countries’ legal restrictions on payments, etc.

The NTA has, since 2009, issued an annual transfer pricing report covering, among other things, a summary of the NTA’s activities and focus areas, the number of ongoing, new and settled transfer pricing cases including amounts, and a list of completed and pending MAP and APA processes.

Norway does not prohibit the use of secret comparables. The NTA is free to apply such comparables as part of its transfer pricing assessments. The use of secret comparables was subject to discussion in the Total E&P ruling in the Norwegian Supreme Court; see Rt 2015 page 353.

Overall, the authors assume the consequences of COVID-19 in Norway to be the same as those described and identified in the OECD’s Guidance on the transfer pricing implications of the COVID-19 pandemic (the “COVID Guidelines”).

The NTA published a Norwegian article on transfer pricing and COVID-19 implications reflecting the views presented in the COVID Guidelines. As of March 2023, the authors have not seen any cases where COVID-19 has had an impact on transfer pricing considerations, but given the timing of transfer pricing audits in Norway, it is likely still too early to conclude on any effects. 

The authors have thus far not observed that the COVID-19 situation in Norway has significantly impacted on the general progress of transfer pricing audits.   

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Ernst & Young Advokatfirma AS fields one of Norway’s largest transfer pricing practices and Norway’s largest transfer pricing practice; hiring lawyers, auditors and economists and specialising in Norwegian and international taxation of corporations and individuals, transfer pricing, indirect taxes, customs and duties. The firm has approximately 20–25 people frequently working with transfer pricing-related matters, covering operating-model effectiveness, transfer pricing model design, controversy and dispute resolution. The transfer pricing team covers both lawyers and economists, serving a broad range of sectors and international clients. Ernst & Young Advokatfirma AS has a growing team focusing on tax controversy and dispute resolution, with several of the partners in the firm being admitted to the Norwegian Supreme Court and lawyers capable of acting as litigators for the firm’s clients. The firm houses further expertise in tax matters arising from corporate transactions, with growing experience in blockchain and cryptocurrency matters.