NORWAY: GENERAL METADATA

Data documentation



General notes



The fiscal year in Norway coincides with the calendar year.


Tax expenditures in Norway have been reported in the national budget (St. meld. nr.1 (Nasjonalbudsjettet)) since 1999. Since FY2010-2011, estimates of the tax expenditures listed below can be found in the following table in the budgetary reports: "Tax expenditures and sanctions[1] by sector" (Skatteutgifter og -sanksjoner for naeringslivet).

Producer Support Estimate



The taxation of upstream activities on the Norwegian Continental Shelf is directed by the Petroleum Tax Act of 1975; where there are no specific rules given in the PTA, the General Tax Act (GTA) applies. For taxation purposes, income is calculated on the basis of a norm price set by the petroleum price board, giving rise to a difference in revenue figures for taxation and accounting purposes,

Income derived from oil and gas production is subject to a special resource tax of 55%, in addition to the ordinary corporate income tax of 23% (in total a marginal tax rate of 78%). A range of expenses are allowable against both the special resource tax and the ordinary corporate income tax; most notably exploration costs are deductible, and a company may claim an annual refund of the tax value of direct and indirect exploration expenses (excluding financial expenses) for each tax year loss. Alternatively, these losses can be carried forward. In practice, this means reimbursement by the government of up to the full value of all the direct and indirect exploration expenses. In this respect, the government shares symmetrically in both profits and losses from exploration and production of petroleum products.

Where taxable income is subject to a marginal rate of 78%, investments in offshore production facilities, pipelines and installations are depreciated over 6 years at a rate of 16.66% per annum. Additional allowances are permitted at a rate of 21.2% (5.3% each year over a four year period) when calculating the special tax basis for the 55% tax rate, such that 89.66% of offshore investments are nominally borne by the government.[2] Other capital investments are depreciated on a declining balance basis at rates between 0 and 30% per annum; for example, exploration rigs are depreciated on a declining balance basis at a maximum rate of 14% per annum.

In addition to the regular corporate income tax and special resource tax, petroleum producers must also pay taxes on emissions of carbon dioxide and nitrogen oxide. As of 1 Jan 2016, the CO2 tax is charged at a rate of NOK 1.02 per standard cubic meter on gas consumed or flared on offshore production installations and at a rate of NOK 0.84 per m3 for natural gas and NOK 1.26 per litre for LPG imported from offshore production facilities or withdrawal from a warehouse. The tax on NOx emissions was NOK 21.17 per kilogram in 2016; however rather than pay this fee companies can choose to pay a fee into a fund (tax deductible at a rate of 78%) and commit to emissions reductions targets.





Footnotes:

[1] Tax expenditures (tax sanctions) are defined as exceptions from the general rules in the tax system that are applied to certain groups or certain activities and imply lower (higher) government tax revenue. Norway uses revenue forgone method for calculating tax expenditures. There are different benchmarks for calculating tax expenditures related to excise duties and environmental taxes. Excise duties are treated individually which means that each excise tax expenditure calculation relies on a different benchmark.

[2] Expenditure incurred prior to May 2013 are subject to an annual uplift of 7.5% (30% in total over four years)