Norway's corporate taxation system includes various direct and indirect taxes, with CIT and VAT being the most significant taxes for companies operating in the country. Understanding the various tax rates, tax brackets, and legislation is crucial for corporations doing business in Norway.
Corporate Income Tax
Corporate Income Tax (CIT) in Norway is a direct tax levied on the net income of companies operating in the country. The Taxation Act of August 26, 1999 (Skatteloven), along with subsequent amendments, governs corporate income tax in Norway.
Domestic Companies:
Domestic companies in Norway are taxed on their worldwide income. As of January 1, 2021, the standard CIT rate is 22%.
Foreign Companies:
Foreign companies with a permanent establishment in Norway are subject to CIT only on the income attributable to the Norwegian permanent establishment. The standard CIT rate of 22% applies.
Value Added Tax (VAT)
VAT (Merverdiavgift) is an indirect tax in Norway, applicable to the sale of goods and services. The Value Added Tax Act of June 19, 2009 (Merverdiavgiftsloven), governs VAT in Norway. VAT is levied on every stage of the supply chain, from production to consumption. There are four VAT rates in Norway:
- Standard rate: 25% (applied to most goods and services)
- Reduced rate: 15% (applied to food products)
- Low rate: 12% (applied to specific services, such as passenger transport, cinema tickets, and hotel accommodations)
- Zero rate: 0% (applied to certain goods and services, such as exported goods, newspapers, and books)
Sales Tax
Norway does not impose a separate sales tax, as the VAT system covers the taxation of goods and services.
Import Duties
Import duties in Norway are governed by the customs legislation of the European Free Trade Association (EFTA), of which Norway is a member. Import duties vary depending on the product and its classification under the Harmonized System (HS) code. Rates can range from 0% to more than 20%, depending on the type of goods. In addition to import duties, imported goods are also subject to VAT.
Export Duties
Norway does not generally impose export duties on goods exported from the country. However, certain goods, such as fish and fish products, are subject to export duties under specific circumstances. These duties are governed by the regulations set forth in the Act on Raw Fish (Råfiskloven) and other related legislation.
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