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Corporate income tax
The standard rate of corporate income tax (CIT) in Norway is 28%, and is applicable to Norwegian companies and foreign companies holding property in Norway. The CIT is reportable to the tax authorities based on the company’s fiscal year, which is normally the same as the calendar year.
Capital gains
Capital gains realised on the disposal of Norwegian real estate are subject to CIT at the standard rate for both Norwegian and foreign companies. Losses can be offset against gains and 20 % of the resulting gain/loss is taxable/deductible annually on a reducing balance basis. For example – in the case of a gain of 100, 20 will be taxed as income in year 1, 16 in year 2, etc.
Norway does not tax foreign shareholders who sell shares in Norwegian or foreign companies holding real estate in Norway.
Property tax
A Norwegian joint-stock company or limited company is exempt from property tax (wealth tax) if its shareholders are domestic or foreign limited companies.
Any other entity, irrespective of residence, whose assets are predominantly made up of Norwegian real estate is liable to an annual tax of up to 0.9% (previously 1.1%) on approximately 30% of the fair market value of the property.
Local communities may levy an annual tax on real estate at 0.2% to 0.7% on approximately 25% to 30% of the fair market value of the property.
Property transfer tax
Transactions including the transfer of Norwegian real estate are subject to Norwegian stamp duty at 2.5% on the consideration.
VAT
A voluntary VAT registration scheme is available such that lessors can recover input VAT if the relevant real estate is let out to taxable businesses. The lessor is obliged to calculate output VAT on rent receivable.
The VAT authorities may reclaim VAT recovered regarding the construction and reconstruction of real estate if the real estate is sold, let or otherwise disposed of in a manner outside the scope of VAT within 3 years of completion. An application may be made to the tax authorities requesting that recovered VAT should not be reclaimed.
The above is for general information purposes only. It is not intended to be comprehensive or to provide any specific tax advice.
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