Building a Solid Foundation for UK & Norwegian Businesses

BLOG6th Jun 2018

Following a period of consolidation and cost efficiency programmes, oil and gas related companies are beginning to see an improvement in performance and trade. This has been aided by the increase in the oil price which has doubled in two years. Companies have been exploring international opportunities as well as building on the foundations in the North Sea.

Work has begun recently on laying the largest Norwegian pipeline in the Norwegian North Sea to the Johan Sverdrup field which is expected to carry up to 660,000 barrels of oil into Mongstad, north of Bergen. The Mariner project in the UK North Sea is expected to start production in second half of 2018. This is a sign of commitment and investment currently being made in the North Sea.

AAB have seen an increase in demand for tax advice and support for UK companies operating in Norwegian waters and vice versa, when a Norwegian company is operating in UK waters. Our highly experienced international tax team delivered a “Doing Business in Norway” training course earlier this year which provided companies with an outline and understanding of the tax considerations for non-Norwegian companies when working in Norway. AAB are also supporting a number of Norwegian businesses with operations in the UK.

It is important to understand the movements of both your company employees and subcontractors as this can trigger unexpected and unbudgeted tax liabilities. For example if a UK employee is working offshore in Norwegian continental waters, there will be a liability from day 1 to Norwegian personal income taxes and an obligation for the employer to submit a report to the Norwegian Tax Authorities. There are fines and penalties for late reporting.

If the offshore activities exceed 30 days in any 12 month period, the company will create a permanent establishment (PE) and trigger a Norwegian corporate income tax liability and a requirement to file reports and returns.

There may also be a requirement for an audit of the Norwegian accounts. The thresholds have recently changed with effect from 10th January 2018 and it is important for companies to assess the position and requirement for an audit. There are exemptions which may be relevant and time requirements which companies should understand.

The Norwegian corporate tax reporting deadline of 31 May 2018 is fast approaching (for 2017 tax returns) and if you have not prepared or filed the returns yet, professional advice should be sought immediately. AAB have a team of international tax specialists who can help with your overseas compliance requirements and provide advice and support when operating in Norway and further afield. AAB are also delighted to be speaking at the Aberdeen-Norway Gateway Event on Wednesday 6th June 2018.

For more information on UK and Norwegian businesses please don’t hesitate to contact us.

How AAB can help you with

Corporate Tax

Corporate Tax covers a broad and complex area of tax legislation, so we provide a suitably broad and comprehensively experienced team to support your business with pragmatic, commercial advice. Businesses of all sizes and types, and across a wide range of sectors, benefit from our comprehensive corporate tax compliance and advisory service. We have exceptionally knowledgeable tax teams distributed across our offices, ready to support you with their wealth of experience and expertise. We can manage your global tax exposure with a coordinated response that saves you having to seek advice from separate advisors.

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How AAB can help you with

International Services

If you’re facing multi-jurisdictional challenges around global mobility, tax, employer responsibilities, accounting or other issues, we’ll save you the hassle of searching for international advice – the right people are already available in our expert teams and across our Reach Network. AAB works with multinational clients across the globe, so it’s only logical that we have a comprehensive and highly effective support network that work alongside our International teams to serve them, wherever in the world they operate.

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