Norway – open for business!
As the North-East of Scotland is aware, the oil and gas industry is experiencing a major downturn, forcing companies to reassess their operations, including looking overseas for opportunities to utilise their knowledge and expertise. Norway has historically been an attractive... Read more
Blog31st Oct 2016
As the North-East of Scotland is aware, the oil and gas industry is experiencing a major downturn, forcing companies to reassess their operations, including looking overseas for opportunities to utilise their knowledge and expertise.
Norway has historically been an attractive place for UK companies to seek opportunities, given its proximity and close ties with the UK business community.
Additionally, Norway announced a reduction in its main corporate tax (CT) rate, from 27% to 25%, with proposals to reduce further to 22% by 2018, thus making it an even more attractive option for undertaking business.
Recent studies have identified key towns Hammerfest and Kirkenes as areas expected to buck the current downward trend in oil and gas. Significant investment and development in these areas, and the Barents Sea as a whole, should lead to future growth opportunities. These areas may provide additional appeal for companies looking to expand into the Norwegian sector.
Many UK companies are unaware that Norwegian reporting obligations, and potential tax liabilities, exist from day 1 of working in Norway. Any UK company performing ‘offshore activities’ on the Norwegian Continental Shelf (NCS), for a period exceeding 30-days in any 12-month period, is deemed to be carrying on business there through a ‘Permanent Establishment’ (PE).
Such companies must submit Norwegian CT returns, declaring profits earned in Norway, and pay any Norwegian CT due. Any UK resident employees performing ‘offshore activities’ on the NCS, are liable to Norwegian income tax on all their remuneration earned for such work; National Insurance obligations must also be considered. Similar obligations can arise where work is performed onshore in Norway.
It is clear that companies can enjoy significant benefits from operating in Norway. By speaking to us early to ensure they comply with the necessary reporting requirements, and build any additional costs into their tender price, companies can achieve peace of mind knowing hard earned profits are not eroded by nasty tax ‘surprises’.
For more information contact Ruth MacNamee, Tax Assistant Manager, firstname.lastname@example.org