jurisdiction
Introduction
As Norway is part of the EEA and not a member of the EU, it will not be directly bound by ATAD 3. Norway will normally align with EU rules for anti-tax abuse measures but has not yet taken any steps to implement ATAD 3. From a Norwegian perspective, formal rules governing substance are quite limited, prior to any measures which may be implemented as a consequence of the EU’s ATAD 3.
Tax residence criteria
A company will be considered as tax resident in Norway if it is either: (i) incorporated in Norway, or (ii) effectively managed from Norway, taking into account both board level management and day-to-day management. In practice, this is determined by a variety of factors, for example the place where strategic decisions are made, the location of board meetings / general meetings, and the habitual abode of managing personnel etc.
A company would not be considered tax resident in Norway if it is tax resident in another jurisdiction under a double tax treaty.
'Substance' criteria
N/A.
General requirements
N/A.
Activities
At present, no specific requirements.
Employees
No specific requirements.
Premises
No specific requirements.
Bank account
No specific requirements.
Substance reporting obligations?
At present, no specific requirements.
Substance criteria applied to a foreign entity?
The place of effective management rule (alternative (ii) above) applies to foreign entities, so that foreign entities may be considered tax resident in Norway, even if they are incorporated abroad.
Some Norwegian tax regulations, such as the application of the participation exemption method for dividends from or to foreign companies in “low tax countries” within the EU/EEA, require that the foreign entity is “genuinely established” and performs “a genuine business activity” in the other state. The precise content of this threshold will depend on the nature of the business performed by such company and whether or not the functions performed are similar to those one would expect to find in a Norwegian company performing the same or similar business activity.
ATAD 3
Norway is not obligated to implement ATAD 3 but may take measures to align with EU countries.
