Norwegian tonnage tax regime

  • Published: 27/01/2012

The Norwegian special taxation arrangement (tonnage tax system) available for shipping is considered competitive in relation to similar shipping taxation arrangements in other European countries, both with regards to the tonnage tax level as well as other regulations.

The Norwegian special taxation arrangement (tonnage tax system) available for shipping is considered competitive in relation to similar shipping taxation arrangements in other European countries, both with regards to the tonnage tax level as well as other regulations.
In general, the same rules for taxation will apply for ships registered in the NIS as for ships in Norway’s traditional register or under foreign flag. It is the responsibility of entities and persons to clarify their own tax responsibility.

Instead of normal tax on general income, a company under the special tax arrangement pays a tonnage tax based on the net tonnage of relevant vessels.
A revised tonnage tax arrangement was adopted in 2007, and implies that for incomes generated from that year and onwards, the tonnage tax is the final tax and income can be distributed to shareholders without further taxation.

The special tax arrangement is available for companies formed in accordance with the Norwegian Joint-Stock Company Act or the Norwegian Joint-Stock Public Company Act. In order for a company to be eligible for special tax arrangement assessment, the company must comply with requirements regarding qualifying assets and activities of the company.
Foreign owners established abroad, and participating in a partnership with a Norwegian partner owning [NIS registered ships],  will normally not be liable to tax in Norway. However, owners in countries where there is a tax treaty in place with Norway will as a main rule be liable to taxation in Norway when effective management of the operation of the ship is conducted from Norway.
The establishment of a Norwegian management partnership by non-Norwegians to take care of the daily management of operations does not trigger taxation in Norway of the foreign owners, except when Norway has the exclusive right to tax the income according to tax treaty.

Foreign seafarers working on NIS registered ships and resident outside the Nordic area, are exempted from taxation in Norway. Norwegian seafarers are taxed in Norway according to general tax rules, but are granted a seafarer’s deduction from taxable income.
Income from employment aboard a ship received by Norwegian seafarers who reside outside Norway are taxable to Norway unless they can demonstrate that they pay taxes in their country of residence, or unless Norway has waived the right to taxation in a tax treaty with the country of residence.

Questions on the regime?

Kindly forward questions regarding the tax regime to Norwegian Tax Administration. 

 

Back to top