Companies are subject to corporation tax on their total taxable profit. The rates of corporation tax are set each commencing tax year. The current rate (2016) of corporation tax is flat at 25%.
Subject to certain criteria being satisfied, a parent company can give a group contribution to subsidiaries in Norway. The parent company must then directly or indirectly own more than 90% of the shares in the subsidiaries. It will then be possible for the group of companies to carry forward trading losses indefinitely to offset against future profits within the group.
Dividends are generally subject to a 25% taxation rate multiplied by a factor of 1.15, i.e. effective tax rate of 28.75%. Limited liability companies (and other corporate tax subjects) which invest in other corporate tax subjects, may as a general rule be exempted from dividend tax with reference to the “exemption method” in the Norwegian Tax Act. The exemption method entails that, as a rule, corporate shareholders are exempt from taxation on gains and share dividends. However, a standard rule has been introduced whereby 3% of the income exempt from taxation pursuant to the exemption method is nevertheless deemed to be taxable income.
In addition to limited companies/public limited companies and businesses assessed as partnerships, the rules also apply to cooperative societies, foundations and associations. Insofar as the rules apply to Norwegian companies etc., they also apply to corresponding types of foreign enterprises liable to tax in Norway.
The most important indirect tax is value added tax (VAT), which is a general tax levied on sales within the country and on import. VAT is levied on most goods and some services, and applies to all stages in the chain of production and distribution.