Taxes and duties

Tax

• Business transfers

• Reorganization, mergers, and demergers

• Deductions and the concept of business

• Succession planning

• Incentive schemes for employees

• Tax treaties and permanent establishment

• International employees

• Exit tax on emigration

• Property tax

VAT

• Deductions and the concept of business activity

• Adjustment rules, voluntary registration, and real estate

• E-commerce and VOEC registration

• VAT in government entities

• VAT on imports and exports

Tax and VAT Process

• Tax audits and inspections

• Request for binding rulings (BFU)

• Tax and duty appeals

• Court proceedings

Duties

• Customs and excise duties

• Document duty

• Excise duties on motor vehicles

• Refund of customs and excise duties

• Trade agreements, origin, and customs value

• What are the pros and cons of synthetic stocks and options?

  Exit rules and wealth tax have particularly dominated last year's tax debate. In the shadow of this, there have also been other developments in the tax area. Increasingly, companies are entering into agreements on synthetic stocks and options with their employees.

  Synthetic stocks differ from ordinary stocks in that they are based on an agreement that economically reflects actual stock ownership in the company. Synthetic stocks follow the company's stock value directly, NOK by NOK. These synthetic stocks do not provide organizational rights but only the right to a cash payment.

  The arrangements are well-suited for companies aiming to maintain long-term and stable ownership without external owners, while also offering employees schemes as if they were actual owners.

• What should I be aware of when ordering goods from abroad?

  Importing goods into Norway is more complex than many think. For a long time, we managed without asking too many questions about how the import process was organized, but the world has changed. Yesterday's contracts no longer work in today's reality.

  You need to have control over the origin, classification, and customs value of the goods to get a clear picture of the final tax costs. At the same time, you must understand your own responsibilities throughout the process; review the delivery terms—INCOTERMS 2020—and determine how far your responsibility and risk extend.

• What does the cooperative housing model entail?

  The cooperative housing model is a method of structuring the sale of real estate, such as a rental property, which reduces capital gains tax for the seller. Normally, the sale of property, whether as shares in a company or as individual units, triggers significant capital gains tax if the property has appreciated in value over time. By using the cooperative housing model, this historical appreciation is removed, meaning the seller effectively avoids paying capital gains tax upon the sale.

• When does a permanent establishment arise?

  When a foreign company conducts business in Norway for more than 12 months, it may be considered to have established a permanent establishment under Norwegian tax rules and tax treaties. A permanent establishment can, for example, be an office, a factory, a workshop, or a site for installation or assembly projects. Once such a permanent establishment is established, the foreign company becomes liable to pay taxes in Norway on income generated through its activities in the country.

• Do companies have to pay wealth tax?

  Companies, including limited liability companies and certain other types of entities, are exempt from wealth tax. Instead, the value of a company's wealth is assessed based on the share value held by its owners. This means that wealth tax is tied to the shareholders' ownership, not the company's assets.

  Wealth tax applies to individuals who are tax residents in Norway and to individuals who are not tax residents but own real estate or movable property in Norway. The wealth tax is calculated based on net assets, and if the net assets exceed a specific exemption threshold at the end of the tax year, wealth tax is incurred. The exemption threshold and tax rate are determined annually.

• I am moving abroad. What happens to my tax liability in Norway?

  When you move abroad, you will be considered tax resident in Norway for the three subsequent income years, as long as certain conditions are met. This means that during this period, you are liable to pay taxes in Norway on your global income and wealth. After this period, you can formally emigrate for tax purposes from Norway.

  For individuals who have been tax residents in Norway for less than ten years prior to moving abroad, tax residency may cease in the first income year if certain conditions are fulfilled.

  Even after you have emigrated for tax purposes, you may still be subject to limited tax liability for income and wealth connected to Norway. This may include real estate in Norway, employment income earned in Norway, or dividends from a Norwegian company.

  Tax treaties help prevent double taxation of the same income and wealth.

• What is exit tax?

  Exit tax is a tax that may be triggered when you move out of Norway and your tax liability ceases or you are considered a resident of another country under a tax treaty. The exit tax applies to latent (unrealized) gains, such as on shares, and is calculated as if the shares were sold on the day of departure.

  The rules for exit tax have been revised in recent years. This includes conditions related to when tax liability ceases, threshold amounts for when the tax is triggered, deferral of tax payment, and adjustments for value changes after emigration. The exit tax rules remain relevant and are subject to ongoing debate.

• Value-added tax (VAT), do I actually have the right to deduct?

  It is often unclear what constitutes part of one's business and what can be deducted as input VAT. Even determining what qualifies as turnover can be difficult to clarify. Questions may also arise about where the turnover takes place. Recent case law has added to the uncertainty.

  The Tax Administration is not always correct in how obvious they claim something is. It is not necessarily wrong to deduct VAT, even if the administration believes otherwise.

  If you are running a business and have expenses related to it, the general rule is that you can deduct the VAT. However, be aware that there is a myriad of exceptions and exemptions. Stay vigilant and ask questions.