Fossil Fuel Support - NOR
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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 næringslivet).
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 53%, in addition to the ordinary corporate income tax of 25% (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 22% (5.5% each year over a four year period) when calculating the special tax basis for the 53% 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)

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OECD (2018), OECD Companion to the Inventory of Support Measures for Fossil Fuels 2018, Paris.

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Nov-17

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Annual

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Units
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Norwegian krone

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Indicator

PSE: Producer Support Estimate

GSSE: General Services Support Estimate

CSE: Consumer Support Estimate

Stage

EXTRACT: Extraction or mining stage

TRANS: Transportation of fossil fuels (e.g., through pipelines)

REFIN: Refining or processing stage

GENER: Use of fossil fuels in ectricity generation

INDUS: Use of fossil fuels in the industrial sector

END: Other end uses of fossil fuels

Statutory or Formal Incidence

consumption: Direct consumption

returns: Output Returns

income: Enterprise Income

inputs: Cost of Intermediate Inputs

labour: Labour

land: Land and natural resources

capital: Capital

knowledge: Knowledge

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Users of tax expenditure estimates should bear in mind that the Inventory records tax expenditures as estimates of revenue that is foregone due to a particular feature of the tax system that reduces or postpones tax relative to a jurisdiction’s benchmark tax system, to the benefit of fossil fuels. Hence, (i) tax expenditure estimates could increase either because of greater concessions, relative to the benchmark tax treatment, or because of a raise in the benchmark itself; (ii) international comparison of tax expenditures could be misleading, due to country-specific benchmark tax treatments.

Fossil Fuel Support - NORAbstract

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 næringslivet).
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 53%, in addition to the ordinary corporate income tax of 25% (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 22% (5.5% each year over a four year period) when calculating the special tax basis for the 53% 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)

Country noteskippedCountry sourceshttp://stats.oecd.org/wbos/fileview2.aspx?IDFile=971bc7c6-1035-4738-8467-d1bde3f1f67b
Contact person/organisation

ffs.contact@oecd.orgffs.contact@oecd.orgName of collection/source

OECD (2018), OECD Companion to the Inventory of Support Measures for Fossil Fuels 2018, Paris.

Unit of measure used

Norwegian krone

Power codeUnitsPeriodicity

Annual

Date last updated

Nov-17

Key statistical concept

Indicator

PSE: Producer Support Estimate

GSSE: General Services Support Estimate

CSE: Consumer Support Estimate

Stage

EXTRACT: Extraction or mining stage

TRANS: Transportation of fossil fuels (e.g., through pipelines)

REFIN: Refining or processing stage

GENER: Use of fossil fuels in ectricity generation

INDUS: Use of fossil fuels in the industrial sector

END: Other end uses of fossil fuels

Statutory or Formal Incidence

consumption: Direct consumption

returns: Output Returns

income: Enterprise Income

inputs: Cost of Intermediate Inputs

labour: Labour

land: Land and natural resources

capital: Capital

knowledge: Knowledge

Recommended uses and limitations

Users of tax expenditure estimates should bear in mind that the Inventory records tax expenditures as estimates of revenue that is foregone due to a particular feature of the tax system that reduces or postpones tax relative to a jurisdiction’s benchmark tax system, to the benefit of fossil fuels. Hence, (i) tax expenditure estimates could increase either because of greater concessions, relative to the benchmark tax treatment, or because of a raise in the benchmark itself; (ii) international comparison of tax expenditures could be misleading, due to country-specific benchmark tax treatments.

Other comments

OECD Companion to the Inventory of Support Measures for Fossil Fuels 2018http://dx.doi.org/10.1787/9789264286061-en