Norway: Country-by-country reporting proposal, public consultation

The Norwegian Ministry of Finance published a public consultation paper regarding country-by country reporting for tax purposes. The proposal suggests that multinational groups—when the ultimate parent company is a resident in Norway—would be required to submit country-by country reports. The reporting requirements could also affect foreign group entities that are residents in Norway if certain conditions are met. The public consultation ends 25 January 2016.

The Norwegian proposal is generally in line with the final report issued in October 2015 under the OECD’s base erosion and profit shifting (BEPS) Action 13, Transfer pricing documentation and country-by-country reporting.

In addition, the proposal follows the 2016 Norwegian state budget and the government’s previous suggestions for tax reform. Read TaxNewsFlash-Europe

Overview of proposed country-by-country reporting rules

With respect to country-by-country reporting, it is proposed that all Norwegian companies of multinational groups with a consolidated turnover of at least NOK 6.5 billion (approximately U.S. $720 million) would be required to file a country-by-country report. The country-by-country report would then, in principle, be made available to all countries where the group operates (i.e., through its subsidiaries and / or permanent establishments). However, a confidentiality provision is suggested—that is, the country-by-country report could only be submitted to tax authorities in other jurisdictions and only when there is an agreement in force pertaining to international law.

If the ultimate parent company of the group is a tax resident in Norway and the reporting threshold is satisfied, the proposal suggests that the country-by-country report would be submitted to the Norwegian tax authorities in the English language.

Furthermore, it is proposed that other subsidiaries in Norway of foreign-based groups would have to submit the country-by-country report if certain conditions are met. These conditions would apply if:

• The ultimate parent company is not required to file a country-by-country report in the jurisdiction where it is a resident;
• The ultimate parent company is a resident in a jurisdiction that has not signed a specific agreement for the automatic exchange of country-by-country reports with Norway; or
• There are other measures preventing the automatic exchange of country-by-country reports.

It is proposed that the amendments to Norway’s tax law (known in English as the “Tax Assessment Act”) would be effective for all accounting years starting 1 January or later. Hence, the country-by country report would have to be submitted for the first time before 31 December 2017 for the fiscal year 2016.

KPMG observation

Under the proposed country-by-country reporting measures, multinational groups whose ultimate parent company is a resident in Norway and having a turnover exceeding NOK 6.5 billion need to be ready to file country-by-country reports. According to information provided by the Ministry of Finance, it is expected that about 70 Norwegian groups would be required to submit country-by-country reports.

Tax professionals in Norway anticipate that the current proposal could be passed by Parliament without significant changes during the spring of 2016.