Overview of Tax Compliance in Norway

The king of Norway is the head of the state and the head of the government is the Prime Minister. Norway is a parliamentary democracy and constitutional monarchy. The Norwegian government controls essential areas through significant, state-majority-owned corporations, including the crucial petroleum industry. Before Norway's union, small kingdoms in Norway were the main origins of taxation in Norway. The kings of the small kingdoms did not live at one royal estate permanently; instead, they travelled across their realm, spending time at various royal estates. Norway's tax system is comprehensive and progressive. Taxes are quickly rising to the top of the expenses and compliance hassles multinational corporations face.

What is tax?

A functioning society fundamentally depends on taxes, enabling governments to pay for necessary services and promote the general welfare. Governments uphold their obligations while fostering economic expansion and social advancement through the levy and collection of taxes. Taxpayers must be aware of their responsibilities with regard to taxation, including the need to file tax returns, keep accurate financial records, and abide by all applicable tax rules and regulations. Governments are tasked with ensuring the tax system is open, equitable, and accountable while balancing tax revenue generation and the economic prosperity of individuals and businesses. 

Types of Taxes in Norway

• Corporate Income Tax: Corporate income tax is a tax levied against the profits and earnings of businesses or corporations. Businesses have a financial commitment to fulfill based on the revenue they produce. Normally, the government imposes the tax, computed as a portion of the company's taxable income. This tax money goes towards paying for government expenses and public services. A Norwegian resident business must initially pay corporate income tax on all of its income, domestic and foreign. However, if non-resident firms engage in business operations conducted in or managed from Norway, they may be subject to corporate income tax in that country. The standard CIT rate is 22%, but some financial sector businesses may not use this rate. They are assessed at the rate of 25%.
• Value Added Tax: Value Added Tax (VAT) is a tax that is levied on products and services at all phases of the supply chain. Starting with the manufacture and continuing until the final sale entails adding a small portion of the overall tax value at each stage. All goods and services with no other applicable exemptions or rates are subject to the basic VAT rate of 25%. Food and beverage supplies, excluding those for cigarettes, alcohol, prescription drugs, and water from public waterworks, are taxed at a reduced standard rate of 15%. For example, domestic passenger transport and its procurement, domestic ferry services related to vehicle transport, lodging services, movie tickets, museum and gallery tickets, amusement park tickets, and sports events are all subject to a 12% VAT rate.
• Custom Duties: Taxes levied on exported or imported commodities between nations are referred to as customs duties. The government imposes these taxes in order to make money, safeguard home industries, and control global trade. The government hopes to regulate the movement of goods across borders and promote fair competition in the home market by collecting customs charges. Other than food, apparel, and textiles, no other goods are subject to customs taxes in Norway.
• Property Tax: Property tax is a tax levied against real estate or other physical assets owned by people or organizations. This tax is normally levied by the government and is based on the property's assessed value. Real estate is subject to property tax. However, the amount owed varies depending on the municipality. Municipalities impose a tax rate that usually runs from 0.1% to 0.7%; the precise proportion is set by each individual municipality.
• Carbon Dioxide Tax: Different actions that release carbon dioxide into the atmosphere are subject to a CO2 tax. This includes levies on natural gas emissions and petroleum that is burnt off or flared. The tax also covers equipment used in the production or transportation of petroleum as well as carbon dioxide, which is emitted into the atmosphere after being separated from petroleum. This tax's objective is to limit harmful emissions and promote carbon dioxide reduction in order to lessen climate change.
• Excise Taxes: Excise taxes are levied on particular products or services, typically at the point of manufacture or sale. These taxes, which are imposed in addition to the standard sales or value-added taxes, deter consumers from purchasing certain goods or controlling certain sectors. They are frequently used in relation to products like alcohol, tobacco, petrol, and luxuries. The government collects excise taxes and uses them to make money. Both imported and domestically produced goods, such as the following: are subject to excise taxes.
• Petroleum-based goods, such as lubricating oil and petrol.
• Beverages with alcohol and their packaging.
• Tobacco-related goods
• Many types of sugar.
• Chemicals in some products, such as TRI/PER.
• Propellant gases comprising HFC/PFC and their byproducts.
• Fish, marine mammals, and other species that are found in the wild in the ocean, etc.

Other Taxes

• Natural Resources Tax 
• Net Wealth Tax
• Exit Taxes
• Financial Activities Tax
• Hydropower Tax Regime
• Shipping Tonnage Tax Regime
• Petroleum Tax Regime

Tax Return Period

Companies must file tax returns by the end of May in the year following their financial year in Norway. 

Services offered by Enterslice

Businesses are faced with complicated and constantly changing reporting and tax compliance duties in a tax environment that is quickly changing. We see proactive management of company tax matters and compliance with tax laws as a critical strategies for businesses to realize their full potential in a flexible, efficient, and futuristic way.

Our expert tax compliance team provides extensive services that include:

• Professional advice on local company tax issues
• Ensuring that corporate tax laws are followed
• Setting up tax provisions and accounting
• Global outsourcing services for taxes
• Preparing numerous tax returns, including those for VAT and income tax
• Assistance and professional guidance for identifying tax incentives and deductions
• Calculations of tax provisions
• Tax Statements and assessments
• Simplifying the tax registration processes
• Keeping track and managing daily tax matters.
• E-tax reporting solutions
• Advisory services to individuals, companies, and various other organizations also
• Experienced tax experts with deep knowledge and customized solutions and guidance to help businesses to enhance their tax strategies.
• Supporting clients in tax audits and also assisting them in the procedure of appeals
• They conduct thorough assessments of direct taxes.
• Tax optimization services
• Assistance and guidance in tax due diligence
• Examinations in tax-related aspects
• Tax opinions
• Transfer Pricing Services
• Assistance in succession planning, and smooth transition of assets, along with consideration of tax implications
• Assistance in the implementation of appropriate tax strategies and tax structures
• A review of the business's operations, supply chain, and facilities to spot potential VAT registration requirements
• Managing compliance obligations
• Recovery of foreign VAT
• Assistance with the recovery of VAT
• Structuring of acquisitions
• Tax Authority Audits
• Assessment of VAT
• VAT administration
• Consultation on the Indirect taxes
• Consultation on the direct taxes
• Merger and Acquisitions
• Assistance in developing and putting into practice VAT recovery tactics
• Guidance in cross-border transactions
• Tax due diligence
• Re-organization of financing models