Tax statistics for companies, 2004

Limited companies are enterprises whose owners have limited responsibility for the companies' liabilities. The owners/shareholders must also be obliged to file a tax return, cf. Tax Assessment Act, Chapter 4. The statistics include mainly limited companies, but associations, co-operatives, branches of foreign companies, institutions, mutual funds, building co-operatives, savings banks etc. are covered too. They all pay tax in arrears.

Taxpayers are companies with assessed taxes or tax deductions.

Oil companies are non-personal tax payers that are taxed pursuant to the Petroleum Tax Act (Act No. 35 of 13 June 1975). Oil extraction companies are companies licensed to participate in the extraction and pipeline transport of oil and gas. They are taxed pursuant to the Petroleum Tax Act. As from 2005, oil extraction companies with losses can demand to be paid the tax value of the company’s exploration expenditure. Companies that close down can also demand to be paid the tax value of the losses that can be carried for

Foreign shelf companies are companies that are not registered in Norway and are engaged in various forms of maintenance, repair and activities supporting Norwegian companies engaged in the extraction and pipeline transport of oil and gas under the Petroleum Tax Act. They pay only ordinary income tax to the state.

Power companies include all non-personal taxpayers taxed by the special tax rules for power companies in accordance with the Taxation Act chapter 18. All companies owning hydroelectric power stations are liable to pay special taxes. The companies are often involved in other activities besides electric power production and can therefore be in another main industry different from electricity, gas and water supply.

Power station is a unit that produces electric power. If a power company has more than one hydroelectric power station in a municipality, will all be treated as one hydroelectric power station.

Shipping companies include all limited companies and participant taxed companies that are taxed by the special rules for limited shipping companies. In order to be eligible for the special rules, the company must be a limited company that owns ships or vessels either directly or indirectly through another company. The latter can be a participant-taxed company or another limited company covered by the regime. As of fiscal year 2002, the limited companies can own a chain of participant taxed companies. Companies covered by the regime cannot operate other businesses than chartering and operating own and chartered in ships and may not have employees. The material Statistics Norway obtains covers both limited companies and participant-taxed companies. The statistical units are non-personal taxpayers (limited companies) covered by the regime. Participant-taxed companies are included in the statistics with information about the number of companies assessed by the special rules. A participant-taxed company is not a separate taxpayer as each of the participants is taxed. In order for a participant-taxed company to qualify for the regime, all participants must be Norwegian limited companies covered by the regime, or foreigners not taxable to Norway. Consequently, all participants taxable to Norway are included in the figures for limited companies covered by the regime.

Financial companies include companies subjected to financial activity tax. Financial activity tax was introduced with effect from 2017. In general, the financial activity tax applies to all employers that engage in activities within section K - Financial and insurance activities - in Statistics Norway's Standard Industrial Classification (SN2007). The financial activity tax consists of two elements. Financial activity tax on salary and financial activity tax on surpluses. Financial activity tax on salary is an extra payroll tax of 5 percent for employers in the financial sector. Financial activity tax on surplus is a tax rate of 25 percent on ordinary income. Companies without employees will not be subject to the financial activity tax, neither on salary nor on profit.

There are two exemptions and one limitation to the financial activity tax.

• There’s an exemption from financial activity tax liability for enterprises where the salary expenses linked to the employer's financial activities do not exceed 30 percent of the enterprise's total declarable salary expenses.
• There’s an exemption from tax liability for enterprises where the salary expenses linked to VATable financial activity exceed 70 percent of the enterprise's total declarable salary costs linked to financial activities. What constitutes VATable financial activity must be assessed based on the nature of the service. For example, it’s irrelevant that the activity is exempt from VAT because it concerns export of services. This is still considered as a VATable financial activity.
• Enterprises that engage in non-economic activity, as defined in EEA law, may limit the tax basis for the financial activity tax on salary to that proportion of the salary expenses linked to economic activity.

Land based activities cover companies assessed by the ordinary tax rules. These companies are assessed 22 per cent income tax (16 per cent on Spitsbergen). In addition, some types of companies are assessed 0.15 per cent wealth tax. Land based activities include all companies assessed as non-personal taxpayers, except oil extraction companies, which are assessed by the Petroleum tax Act, and power companies, shipping companies and companies subjected to financial activity tax, which are assessed by special rules of the Tax Act. Land based activities do however include shipping companies and financial companies assessed by ordinary tax rules. 

Ordinary income consists of business and capital income less interest on loans and other capital costs and deduction for loss carried forward. Ordinary income is the basis for assessing income tax.

Correction income consists of the portion of untaxed equity that the company has paid as dividends or given as a group contribution. Correction income ended in 2011.

Taxable income covers positive ordinary income and correction income. As from 2004, tax exemptions have been introduced for incomes from shares and other assets, among others, share dividends, according to the Taxation Act, Section 2-38. Those incomes are therefore not included in taxable income, see the Taxation Act Section 2-38.

Taxable wealth is the value of the company's assets reduced by debt, as of 1 January in the the assessment year.

Income tax is a central government tax calculated on the basis of ordinary income. All types of companies, including companies taxed pursuant to the Petroleum Tax Act, are subject to income tax. Income tax also included assessed tax on correction income until 2011.

Wealth tax is a central government tax assessed on the basis of taxable wealth for certain groups of companies.

Tax deduction for received dividends is a tax deduction relating to the provisions covering the taxation of share dividends. The purpose of the tax deduction is to prevent double taxation of paid share dividends. Unused tax deduction can be carried forward for 10 years. Since, as from 2004, income from share dividends is no longer liable to taxation, according to the Taxation Act, Section 2-38, tax deductions for received dividends are not applicable.

Tax deduction for tax paid to foreign country is a deduction that can be demanded, according to the rules in Sections 16-20 and 16-30 of the Taxation Act. The taxpayer can demand a deduction for assessed income tax or property tax they have paid to a foreign state. Also, if the taxpayer has paid tax to a foreign state on dividends or profit from foreign subsidiaries, it can demand a deduction from Norwegian tax. Earlier this deduction was made directly from income tax. Unused tax deductions can be carried forward for 10 years.

Paid back tax . Paid back tax refers to taxes paid back to companies with losses and that have had assessed taxes the two previous years. As from financial year 2008 to financial year 2009, companies having losses are repaid the taxes assessed the two previous years. In 2008, the maximum amount of losses that could be repaid was NOK 20 millions.

Tax deduction for expenses on research and development is a deduction for expenses on research and development projects, according to the Taxation Act section 16-40. If the calculated deduction exceeds the total assessed taxes, the excess shall be paid.

Paid exploration expenses . The tax value of expenses incurred in exploration of petroleum deposits, which the state may pay the company according to the Petroleum Tax Act Section 3 C Part 4 and 5.

Special concepts concerning shipping companies

Taxable income. Limited companies assessed according to the special rules for shipping companies are exempt from taxes on ordinary income, although the income is taxed through the distribution of dividends to shareholders. In addition, the company must pay taxes on positive net financial income and other taxable income.

Taxable dividend income occurs as a result of the distribution of untaxed income to the shareholders.

Net financial income is financial income minus financial costs. Financial income and financial costs are ordinary income relating to investments, securities, claims and liabilities.

Allowance for high equity . As from 2002, an additional financial income is calculated for that part of the company's equity that exceeds 50 per cent of total assets. In fiscal year 2000 and 2001, companies with interest expenses lower than 50 percent of the company's total assets multiplied by a mean interest rate, had to credit the difference as financial income. From 1996 to 1999, the allowance for high equity was 30 percent.

Other taxable income for shipping companies can occur as a result of transition rules. Transition rules for fiscal years 1996 and 1997 were drawn up when the regime was introduced. Commencing from fiscal year 2000, other taxable income includes income from profit and loss account and income from entering the tax regime.

Tonnage tax applies to shipping companies and is computed on the basis of information about the ship's net tonnage and number of days in operation. As of fiscal year 2000, the tonnage tax can be reduced for that part of the year the vessel has an environmental declaration. Limited shipping companies that meet certain qualifications may demand to be taxed pursuant to the special provisions of Sections 8-10 to 8-19 of the Taxation Act.

Tonnage tax rates. 1996 - 2019.

If the vessel has not been in operation for more than three consecutive months during the fiscal year, tonnage tax is not applicable to the time the vessel has not been in operation. More information about tonnage tax and the environmental reduction can be found in Section 8-16 of the Taxation Act and in regulation no. 1158 of 19 November 1999 from the Ministry of Finance.

Special concepts concerning oil companies

Net income on shelf includes operating income, work-in-progress and other income, financial income less direct expenditure, depreciation and financial expenditures and deductions according to Section 6-42 of the Tax Act.

Special tax is an extraordinary tax for companies engaged in the extraction and pipeline transport of petroleum.

Special concepts concerning electric power companies

Ground rent income consists of gross sales income less the costs of electric power production. In addition, allowance is made for free income corresponding to the average of the fiscal year's opening and closing tax-related value of production equipment multiplied by a fixed norm interest rate. Negative ground rent income can be carried forward as a deduction in later years. As from 2004, only generators with an output of at least 5500kw are included in the tax base. As from 2015, only generators with an output of at least 10 000kw are included in the tax base.

Tax on ground rent income is a central government tax assessed in the municipality in which the company has its offices. Taxable income is set for each power station according to the rules in Section 18-3 of the Taxation Act.

Tax on natural resources applies to power stations, and it is assessed by municipalities and counties. Its tax base, which is the average of the power plant’s overall electric power production in the fiscal year and 6 previous years, is set for each power station. As from 2004, the tax base includes only generators with a minimum output of 5500kw. As from 2015, only generators with an output of at least 10 000kw are included in the tax base.

Companies may demand tax deduction for tax on natural resources from the income tax assessed by the central government. If the tax on natural resources exceeds the income tax for the fiscal year, the excess may be carried forward as a tax deduction in later years.

Special concepts concerning financial companies

Income tax for companies subjected to financial activity tax is based on ordinary income. The tax rate for these companies is at 25 percent. 

Financial activity tax on salary is at 5 percent of the enterprise's total salary expense. 

Classification of industry is in accordance with the revised Norwegian Standard Industrial Classification (SN94), which is based on the EU industrial standard NACE Rev. 1 and the UN industrial standard ISIC Rev. 3. The revised standard SN2002, wich is the EU industrial standard NACE Rev. 1, is used for the statistics covering 2002. As from the 2008 financial year, SN2007 is used. A company with businesses in several industries is assigned in its entirety to the industry in which the business contributes the most to its overall added value participates.