Legislation

The primary source of Norwegian tax law is the Tax Act of 1999 (skatteloven), which governs the taxation of individuals and corporations. The Tax Administration Act of 2016 (skatteforvaltningsloven) regulates procedural matters, including assessments, appeals and penalties. The Withholding Tax Act (skattebetalingsloven) and various regulations issued under these acts also form part of the legislative framework.

For international tax matters specifically, Norway has enacted dedicated legislation implementing its treaty obligations and unilateral measures, including rules on controlled foreign corporations (CFCs), thin capitalisation and transfer pricing (primarily in the Tax Act).

Administrative Guidance

The Norwegian Tax Administration (Skatteetaten) publishes binding advance rulings, guidance notes and tax return instructions. The Tax Appeals Board (Skatteklagenemnda) issues decisions on disputed assessments. Although administrative guidance is not legally binding in the same way as legislation, it reflects the Tax Administration’s interpretation of the law and is routinely applied in practice.

Case Law

Norwegian courts, including the Supreme Court (Høyesterett), play an important role in interpreting tax legislation. Key Supreme Court decisions on international tax issues – such as the treatment of permanent establishments (PEs), treaty interpretation and anti-avoidance – are considered authoritative.

Treaty Network

Norway has an extensive tax treaty network, with approximately 90 bilateral double tax treaties in force. Norway’s treaties follow the OECD Model Tax Convention as a general template and cover most of its major trading partners.

In Norway, domestic legislation takes precedence as a general rule. However, Norway applies a dualist approach to international law: international treaties do not automatically become part of Norwegian domestic law and must be incorporated through specific legislative acts.

Tax Treaties

Tax treaties are incorporated into Norwegian law by reference through the Double Tax Convention Act of 1949 (Dobbeltbeskatningsavtaleloven). Once incorporated, a tax treaty provision prevails over conflicting domestic tax legislation, as Norwegian courts consistently apply the principle that treaty obligations should be honoured. In practice, where a treaty applies, it may restrict Norway’s right to tax even if domestic law would otherwise permit it.

OECD Guidelines and Commentary

The OECD Model Commentaries and Transfer Pricing Guidelines are not legally binding but are given considerable weight by Norwegian courts and the Tax Administration when interpreting treaties and domestic transfer pricing rules.

Norway generally follows the OECD Model Tax Convention in its treaty negotiations. The OECD Model serves as the starting point for most of Norway’s bilateral tax treaties.

Norway ratified the Multilateral Instrument (MLI), which entered into force for Norway on 1 November 2019.

Norway employs a residence-based system of taxation. Tax residents of Norway are subject to tax on their worldwide income and wealth. Non-residents are taxed only on income and wealth sourced in Norway.

Svalbard has a special tax regime with lower tax rates and its own tax rules. Jan Mayen and the Norwegian dependencies are generally treated as part of Norway for tax purposes, but specific rules may apply. The Norwegian continental shelf is not part of Norway’s tax jurisdiction as defined in the Tax Act, which extends only to Norwegian territorial waters (12 nautical miles). However, activities on the continental shelf are subject to Norwegian taxation through separate legislation – most notably the Petroleum Tax Act of 1975 (petroleumsskatteloven), which governs the taxation of oil and gas exploration and production. For non-residents, tax liability for activities on the continental shelf is specifically provided for in the Tax Act. Companies engaged in petroleum activities on the shelf are subject to special petroleum taxation.

An individual becomes a tax resident of Norway under the Tax Act if they are considered domiciled (bosatt) in Norway. The key criteria are:

• Physical presence: An individual who stays in Norway for more than 183 days in any 12-month period, or more than 270 days over a 36-month period, is considered resident.
• Domicile: An individual who has established a permanent home in Norway is generally treated as resident, regardless of the number of days spent.

Please also note that Norwegian tax residence does not automatically end upon departure from Norway. An individual who emigrates must meet specific conditions, including (i) not using a dwelling in Norway and (ii) not exceeding 61 days in Norway in any income year during the emigration period.

The required duration of the period abroad depends on the length of the individual’s prior residence in Norway:

• For individuals who have been tax resident in Norway for less than ten years prior to the year of emigration, tax residence ceases at the end of the first income year in which both conditions (i) and (ii) above are met.
• For individuals who have been tax resident in Norway for ten years or more prior to the year of emigration, tax residence does not cease until the expiry of the third income year following the year of departure, provided that both conditions (i) and (ii) above are satisfied for each of those three income years.

Tax residents in Norway are, according to the Tax Act, subject to tax on their worldwide income, including employment income, business income, capital income and gains. Norway also imposes a net wealth tax on resident individuals.

However, the starting point might be moderated due to applicable tax treaties.

The starting point when it comes to taxation of non-residents is that they are taxed only on income with a Norwegian source and on wealth located in Norway such as properties and bank accounts. Note that an obligation to report the income and wealth is a requirement even if it is not taxable to Norway. The main categories of Norwegian-source income subject to taxation include:

• employment income earned in Norway;
• business income attributable to a PE in Norway;
• income from immovable property located in Norway; and
• certain passive income (dividends, interest, royalties) with a Norwegian source.

Employment Income

Non-resident employees working in Norway are subject to Norwegian tax on employment income for work performed in Norway. A pay-as-you-earn (PAYE) scheme applies to foreign workers, offering a simplified flat-rate taxation option.

Withholding Tax

Norway levies withholding tax on dividends paid to non-residents (see 3.3 Passive Income).

A legal entity is tax resident in Norway if it is:

• incorporated under Norwegian law; or
• has its place of effective management in Norway.

The Tax Act was amended to introduce the “place of effective management” test with effect from 1 January 2019, aligning Norway’s approach more closely with the OECD Model. An entity managed and controlled from Norway will generally be treated as a Norwegian tax resident, even if incorporated abroad.

Consequences of Residence

Resident companies are subject to Norwegian corporate income tax (22%) on their worldwide income, subject to applicable treaty provisions.

The Norwegian tax authorities have in their internal procedures defined a PE as “a fixed place of business through which an undertaking’s activities are wholly or partly carried out” with reference to the OECD Model Tax Convention.

Resident individuals and companies are taxed on rental income and gains from immovable property on a worldwide basis. Rental income is generally subject to the standard income tax rate of 22%. Gains on the sale of immovable property are included in ordinary income and taxed at the same rate, subject to certain exemptions (eg, the primary residence exemption).

Non-residents are subject to Norwegian tax on income derived from immovable property located in Norway, including rental income and capital gains. Tax treaties generally allocate the primary right to tax immovable property income to the state where the property is located (the situs state), which aligns with Norway’s domestic approach.

Norwegian-resident companies pay corporate income tax at 22% on their net profits. The taxable base includes income from all sources worldwide, with deductions for ordinary business expenses.

Non-resident companies are taxed in Norway only on profits attributable to a Norwegian PE. The PE’s profits are determined on an arm’s length basis, as if it were a separate enterprise.

Norway operates a participation exemption (fritaksmetoden) for corporate shareholders, which broadly exempts dividends and capital gains on qualifying shareholdings from corporate income tax. However, 3% of dividends that are otherwise exempt under the participation exemption are treated as taxable income and are subject to 22% corporate income tax. This 3% income inclusion does not apply to dividends received by companies within the same group.

This generally applies to Norwegian companies holding shares in other Norwegian or EEA-resident companies. Dividends from companies outside the EEA, or from low-tax jurisdictions, might not qualify.

Dividends

• Resident companies: Dividends received are generally exempt under the participation exemption (see 3.2 Business Profits).
• Resident individuals: Dividends are subject to tax at an effective rate of 37.8%.
• Non-residents: Norway imposes a withholding tax of 25% on dividends paid to non-residents. This rate is frequently reduced under bilateral tax treaties, commonly to 5–15%, and typically 0–15% in the case of dividends paid between parent and subsidiary companies. No withholding tax applies to dividends paid to corporate shareholders qualifying under the participation exemption (EEA-resident companies satisfying anti-abuse conditions).

Interest

Norway does not currently levy a general withholding tax on interest paid to non-residents under domestic law, though thin capitalisation and transfer pricing rules may affect the deductibility of interest on related-party loans.

Royalties

Norway introduced a withholding tax on royalties and certain lease payments (for IP and certain assets) paid to related parties in low-tax jurisdictions, effective from 2021. The rate is 15%. Tax treaties may reduce this rate.

Residents

Capital gains are included in ordinary income and taxed at 22% for companies and at an effective rate of 37.8% for individual shareholders on gains from shares. Gains from sales of other assets (e.g., real property) are taxed at 22%.

Non-Residents

Non-residents are generally not subject to Norwegian capital gains tax on the disposal of shares in Norwegian companies unless the gain is attributable to a Norwegian PE. However, gains on immovable property located in Norway are taxable in Norway.

Exit Taxation

Norway has exit tax rules for individuals who emigrate. Unrealised gains on shares and other assets are subject to tax upon emigration, though payment may be deferred under certain conditions (including under EU/EEA law requirements). Following recent legislative changes, the exit tax rules have been significantly tightened.

General Taxation

Employment income earned by residents is subject to income tax and social security contributions. The combined marginal tax rate on employment income can reach approximately 47.4% for the highest income brackets.

Short-Term Assignments and Cross-Border Employment

• Non-residents working in Norway are taxed on income for work performed in Norway, subject to treaty relief.
• Norway has the PAYE scheme for foreign employees, offering a simplified flat-rate option.
• The 183-day rule in most Norwegian tax treaties means that employees on short-term assignments may be exempt from Norwegian tax if they are present in Norway for no more than 183 days in a 12-month period and their remuneration is paid by a non-Norwegian employer without a Norwegian PE.

Remote Working

Norway has not enacted specific legislation exclusively addressing remote working by cross-border employees. However, existing PE and employment income rules apply. There is growing awareness of the risk that remote work may create a PE for a foreign employer in Norway if a home office is used regularly and habitually for the employer’s business. The Tax Administration has provided some guidance on this issue, and it remains a developing area.

Petroleum Income

Norway has a special petroleum tax regime for companies engaged in oil and gas exploration and production on the Norwegian continental shelf. The ordinary corporate tax rate of 22% applies, plus a special petroleum surtax of 56%, resulting in a combined marginal tax rate of 78%. Generous uplift and investment deduction rules apply to mitigate the burden.

Shipping Income

Qualifying Norwegian shipping companies may elect to participate in a tonnage tax regime, under which shipping profits are effectively exempt from ordinary corporate income tax. Instead, a small annual tonnage-based tax applies. This is a significant deviation from the OECD Model approach, which does not specifically address preferential shipping regimes.

Norway has not enacted domestic legislation implementing Amount B. Norway’s general transfer pricing framework continues to be based on the arm’s length principle under the Tax Act and the OECD Transfer Pricing Guidelines. However, Norway has committed to accept the use of Amount B by “covered jurisdictions”, as defined in the OECD’s “Statement on the definition of covered jurisdiction for the Inclusive Framework political commitment on Amount B”.

No domestic legislation has been enacted implementing Amount A. Norwegian authorities have not signalled a unilateral implementation timetable.

Norway has implemented the Pillar Two global minimum tax through the Act on Supplementary Tax of 2024 (Lov om suppleringsskatt), effective for financial years beginning on or after 1 January 2024.

The rules introduced the Income Inclusion Rule and a Qualified Domestic Minimum Top-Up Tax for groups with consolidated revenue of at least EUR750 million. The Undertaxed Profits Rule applied from 1 January 2025.

The Norwegian rules largely follow the OECD Pillar Two Model Rules.

The preparatory works for the Act on Supplementary Tax emphasised that the regime is intended to align closely with the OECD framework, and no significant deviations have since been introduced.

Norway has not introduced a specific digital services tax. Instead, digital services are subject to the general tax framework, including corporate income tax and VAT.

Tax Fraud and Evasion

Norwegian law does not always draw sharp distinctions between tax fraud and evasion, but the key concepts are:

• Tax fraud (skattesvik/skatteunndragelse): Intentionally providing false or incomplete information to the tax authorities with the purpose of reducing tax liability. This is a criminal offence under the Tax Administration Act and the Penal Code.
• Tax evasion: Broadly overlaps with tax fraud in Norwegian law; it covers the deliberate concealment of income, assets or transactions from the tax authorities.

Tax Avoidance

Tax avoidance refers to arranging one’s affairs in a manner that is technically within the law but circumvents the purpose of the legislation. Norwegian law addresses this through a statutory general anti-avoidance rule (GAAR) (omgåelsesnormen/gjennomskjæringsregelen), now codified in Section 13-2 of the Tax Act (effective from 2020).

Identifying Abusive Schemes

The GAAR applies when:

• the primary purpose of a transaction is to obtain a tax benefit; and
• granting the tax benefit would be contrary to the purpose of the relevant tax rule.

Courts also look at the substance of transactions, the commercial rationale and whether the structure is artificial.

Norway employs a range of specific anti-avoidance measures:

• GAAR: Codified in Section 13-2 of the Tax Act, applicable across all transactions.
• 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-party 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 changes through the MLI.

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 (lavskattland) for purposes of the CFC rules. A jurisdiction is generally considered a low-tax jurisdiction if its corporate 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 payments;
• enhanced scrutiny of transfer pricing arrangements; 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.

Norway has implemented a comprehensive framework of reporting obligations to detect and prevent tax fraud, tax evasion and/or tax avoidance, including the following:

• Individual tax residents must submit a comprehensive 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 (aksjonærregisteroppgaven) 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.

The Tax Administration has broad powers to investigate suspected tax fraud and non-compliance:

• Access to information and records: The Tax Administration 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 taxpayers.
• 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 the police (see 6.3 Interaction Between Tax and Criminal Procedures).
• Information exchange: The Tax Administration co-operates with foreign tax authorities through exchange of information mechanisms.

Serious cases of tax fraud are investigated by Økokrim, Norway’s specialised agency for economic crime, which has dedicated resources for complex tax fraud investigations.

The Tax Administration Act provides a framework for administrative penalties (tilleggsskatt) in cases of incorrect or incomplete information:

• Standard additional tax: 20% of the understated tax.
• Enhanced additional tax: 40% where the taxpayer has deliberately or grossly negligently provided incorrect information.
• Aggravated additional tax: 60% in the most serious cases of intentional evasion.

Penalties may be reduced or waived where the taxpayer voluntarily corrects errors (frivillig retting).

Administrative penalties are imposed by the Tax Administration. Decisions can be appealed to the Tax Appeals Board and ultimately to the courts.

Criminal penalties for tax fraud are primarily governed by the Penal Code (straffeloven) and the Tax Administration Act:

• Ordinary tax fraud: Imprisonment of up to two years for intentionally or recklessly providing false information to the tax authorities.
• Aggravated tax fraud: Imprisonment of up to six years where the offence is particularly serious, considering factors such as the amount involved, planning, and abuse of a professional position.
• Gross aggravated tax fraud: In exceptional cases involving very large amounts or organised crime, sentences above six years may be imposed.

Criminal penalties may be imposed alongside administrative penalties, but Norwegian law contains safeguards against double punishment in line with the European Convention on Human Rights.

The Tax Administration has an obligation to report serious suspected tax fraud to the police. In practice, cases involving large amounts of tax evasion, organised schemes or repeat offenders are routinely referred to the police or Økokrim for criminal investigation.

Multilateral Instruments

Norway participates in the OECD/Council of Europe Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which provides a comprehensive framework for administrative co-operation, including exchange of information, simultaneous tax examinations, and assistance in tax collection.

EU/EEA Framework

As an EEA member (but not an EU member), Norway has implemented key EU Directives on administrative co-operation through the EEA Agreement, including provisions equivalent to the EU Directive on Administrative Cooperation in relation to automatic exchange of information.

Bilateral Treaties

Norway’s bilateral tax treaties contain standard exchange of information articles. Many newer treaties follow the OECD Model Article 26, providing for exchange of information on request, spontaneous exchange and, in some cases, automatic exchange.

Norway participates in all major forms of information exchange, including the following:

• On-request exchange: Norway responds to requests from treaty partners for specific taxpayer information.
• Spontaneous exchange: Norway proactively shares information with foreign authorities when it believes information may be relevant, without a prior request.
• Automatic exchange: Norway participates fully in automatic exchange under CRS/AEOI (financial account information) and CbCR exchange. Norway also exchanges information on tax rulings under the OECD framework.

Norway is part of the OECD’s International Compliance Assurance Programme.

Norway also participates in extensive Nordic tax co-operation. The Nordic Tax Treaty (which applies to Denmark, Finland, Iceland, Norway and Sweden) ensures equal treatment across the Nordic countries. The Nordic countries also co-operate through agreements on mutual assistance in tax matters, including exchange of tax information between the tax administrations. Furthermore, the Nordic Agreement on Collection of Taxes (“nordisk trekkavtale”) enables cross-border assistance in the recovery and collection of tax claims between the Nordic states, strengthening enforcement against tax evasion and unpaid taxes.

Norway has an active Mutual Agreement Procedure (MAP) programme. The legal basis is found in the MAP articles (typically Article 25) of Norway’s bilateral tax treaties, as well as the OECD/Council of Europe Multilateral Convention.

The Tax Administration handles MAP requests. Norway has committed to the BEPS Action 14 minimum standard on improving MAP effectiveness and has had its MAP programme peer-reviewed under the Inclusive Framework.

The deadline for submitting a MAP request depends on the applicable tax treaty. Most Norwegian treaties follow the OECD Model and provide a three-year deadline from the first notification of the action that results in taxation not in accordance with the treaty.

Some older Norwegian treaties may have shorter deadlines. Taxpayers are advised to check the specific treaty applicable to their situation, as deadlines are strictly applied.

Norway did not opt into mandatory binding arbitration under Part VI of the MLI. As a result, mandatory binding arbitration is generally not available under Norway’s tax treaties unless a specific bilateral treaty provides for it.

Norway operates an advance pricing agreement (APA) programme administered by the Tax Administration. However, Norway does not offer unilateral APAs; the programme is limited to bilateral or multilateral APAs concluded with other countries. The legal basis derives primarily from applicable tax treaties containing a MAP provision based on Article 25 of the OECD Model Tax Convention, under which the competent authorities negotiate and conclude APAs regarding transfer pricing for cross-border related-party transactions.

The Tax Administration issues binding advance rulings (bindende forhåndsuttalelser – BFU) on the tax consequences of planned transactions. These rulings are binding on the tax authorities if the transaction is carried out as described in the ruling application. They are anonymised and published, providing guidance to other taxpayers.

Guidance and Informal Dialogue

In addition to formal rulings, the Tax Administration provides non-binding guidance through published guidelines and informational letters. For large and complex taxpayers, there is a degree of enhanced dialogue with the Tax Administration, particularly for those in the large taxpayers segment.