Survival of the Richest

Norway
Taxation
Tax treaties
The treaties generally are based on the OECD model, though
treaties with developing countries are often based on the UN
model. 635 In total, Norway has 44 tax treaties with developing
countries, which is above the average (42 treaties) among the
countries covered by this report. The average rate of reduction
of developing country tax rates within those treaties – 3.6
percentage points – is slightly below average (3.8 percentage
points) among the countries covered by this report. 636
However, what the average number doesn’t show is that
Norway has several specific treaties which are 'very
restrictive', and include strong limitations on the taxing rights
of the developing countries which are signatories. Research
by ActionAid showed that eight such treaties are currently in
place. 637 For example, ActionAid estimates that a tax treaty
with Norway cost Bangladesh more than US$2,486,704 due
to lower tax income on dividends alone. 638 Norway’s tax
treaty with Benin completely prevents Benin from taxing
royalty payments to Norway. 639 This is problematic since
multinational corporations can use royalty payments between
subsidiaries to minimize their profits and thereby avoid
taxes in the countries where they have business activities. 640
Removing developing country taxation of these flows
increases the risk that this will happen.
Harmful tax practices
Advance pricing agreements (or ‘sweetheart deals’) are
available only for the pricing of natural gas. However, the
Norwegian tax authorities are currently running a pilot
scheme whereby such agreements may be obtained for
other transfer pricing matters. 641
Global solutions
The previous Norwegian government launched a white
paper in 2013 where it stated its intention to support the
upgrade of the UN Committee of Experts on International
Cooperation in Tax Matters to an intergovernmental body. 643
However, the new government did not take a strong public
stance in favour of the global tax body at the Financing
for Development conference in Addis Ababa in July 2015.
This might have been due to the fact that Norway was cofacilitating
the negotiations. 644
Conclusion
The debate about public country by country reporting is
currently ongoing in Norway, and it remains to be seen
whether Norway will support public access to information
about what multinational corporations pay in taxes
and where they do business. On the issue of beneficial
ownership, the Norwegian government has now announced
that it will introduce public registers.
The Norwegian tax treaty system is concerning, in particular
due to a high number of 'very restrictive' tax treaties with
developing countries, which significantly undermine the tax
system in those countries.
The number of advance pricing agreements (or ‘sweetheart
deals’) that Norway has signed with developing countries is
unknown.
Lastly, it is concerning that Norway no longer actively
supports the establishment of an intergovernmental UN tax
body, which would allow developing countries a seat at the
table when global tax standards are negotiated.
Norway does not have a patent box. It does however have a
very favourable tax regime for shipping companies, albeit in
line with EU countries’ legislation. Shipping income is taxexempt
and qualifying companies instead pay a small tax
based on the tonnage of its vessels. 642
84 • Survival of the Richest