Tax liability to Norway

Pursuant to the Norwegian Tax Act, a NUF will be liable to pay Norwegian tax on income from business activities that are carried out in Norway.

NUF

This includes activity where employees are placed at the disposal of others within Norway. If a foreign company’s business is taxable in Norway, the activities will normally be subject to the same tax principles and tax rates as Norwegian companies.

However, Norway may have entered into a tax treaty with the home country of the foreign company which may provide exemptions from Norwegian tax liability. According to most tax treaties, the condition for tax liability in Norway is that the business income originates from business activity that is carried on through a permanent establishment in Norway.

A “permanent establishment” means that the company has a fixed place of business through which it runs the business all or some of the time. The business must also have been operating for a sufficient period of time.

If the company generates income taxable to Norway, the company is obliged to submit an annual tax return. The deadline is 31st of May. Failure to submit an annual tax return, or a tax return providing incomplete and incorrect information, may result in additional tax and compulsory fines. Note that the enterprise is obliged to file a corporate tax return even though it may be tax exempted from tax liability to Norway according to a tax treaty.

If the work is performed in Norway, the employer is obliged to deduct and pay tax in advance from the employee’s salary. This will be based on information provided in the employee’s tax card.

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