Oil & Gas - Services: Case Study 4


Due to generic clauses contained in a contract held between our client and a large multinational oil and gas company, our client, who was in effect a specialist labour supplier, had inadvertently created a Norwegian Corporation Tax ("CT") charge on their Norwegian profit. This would not have been the case if the contract had, from the outset, reflected the actual facts of the relationship, in that this represented a supply of labour, as opposed to provision of services. The Norwegian Tax Authorities deemed our client to be liable to Norwegian CT on the basis of the contract wording only.

Our Approach

  • Detailed review of contract between our client and the multinational, including "looking through" the contract and considering the actual work performed by our client
  • Supported our client through getting in contact with their customer to request an amendment to the contract, confirming that in actual fact this was a hire of labour agreement
  • Supported our client with subsequent correspondence with the Norwegian Tax Authorities and project managing the appeal to a successful completion

The Benefits to the Client

  • The appeal was successful
  • The charge to Norwegian CT was removed, which would have represented an incremental and unexpected tax cost to the company
  • Advised the client to, in future, challenge their customers’ generic contractual clauses to ensure that future contracts reflect the fact that they are a supplier of specialist labour
  • Assisted with future reporting of contracts to the Norwegian Tax Authorities to ensure that no charge to Norwegian CT would arise in the future

The Plus Factor in Action

  • We helped our client make money by removing an incorrect charge to Norwegian Corporation Tax
  • We saved our client time by dealing with all correspondence with the Norwegian Tax Authorities on their behalf so that they could focus on managing their business
  • We gave our client peace of mind by project managing the successful appeal against incorrectly charged Norwegian Corporation Tax
  • We supported them now and in the future by ensuring that the client amended their contractual procedures so that they could mitigate such matters in the future