Pillar 2 Dashboard: Norway

On June 16, 2025, Norway’s Ministry of Finance opened a consultation on a draft Bill to amend its Minimum Tax Law to implement the OECD’s June 2024 and January 2025 Administrative Guidance.

On April 3, 2024, Regulations for the implementation of the GloBE law were issued.

On June 19, 2024, the Norwegian Ministry of Finance initiated a consultation on the introduction of the UTPR. On October 7, the Norwegian government issued the proposal to introduce the UTPR.

On June 25, 2024, the Norwegian GloBE law was amended.

On January 12, 2024, the Norwegian Council of State ratified the Norwegian Parliaments enactment of the Supplementary Tax Act in Legislative Decision 37 (2023-2024) Act No. 1. (see Law-2024-01-12-1 )

On January 12, 2024, Amendments were made to the Tax Administration Act to reflect GloBE filing.

On November 24, 2023, the draft law to implement the GloBE rules in Norwegian law from 2024 was submitted to Parliament.

On June 6, 2023, the Norwegian Ministry of Finance launched a consultation (including draft legislation) on the implementation of the Pillar Two GloBE Rules in Norway.

GLOBE APPLICATION

General

Norway’s approach to drafting the law is similar to Sweden and the UK in that it redrafts the OECD Model Rules (and aspects of other OECD relevant guidance) into domestic law, rather than transposing them with a static or dynamic reference (as Switzerland and New Zealand have done).

Whilst the geographical scope of the law is not directly stated in any provision, the general rules governing the scope of Norwegian taxes will apply. Svalbard is part of the Kingdom of Norway, but has been made a separate tax jurisdiction through the Svalbard Tax Act. Under the law, Svalbard will be treated as a separate jurisdiction.

The law does not comprehensively implement the GloBE rules as a standalone document and the notes to the law make it clear that the Ministry of Finance is to issue detailed regulations. The Regulations were issued on April 3, 2024.

Administrative Guidance

Whilst the Norwegian law does not include many aspects of the OECD Administrative Guidance, the April 2024 Regulations includes most of the detailed provisions of the First, Second and Third Set of OECD Administrative Guidance.

Aspects included are:

– Currency conversion rules (Article 1.1)

– Deemed consolidation test (Article 1.2)

– Sovereign wealth funds and the definition of Ultimate Parent Entity (Article 1.4)

– Clarifying the definition of ‘Excluded Entity’ (Article 1.5)

– Meaning of “ancillary” for Non-Profit Organisations (Article 1.6)

–Excluded Equity Gains or Loss and hedges of investments in foreign operations (Article 2.2)

–Excluded Dividends – Asymmetric treatment of dividends and distributions (Article 2.3)

– Debt release election (Article 2.4)

– Accrued pension expenses (Article 2.5)

– Excess negative tax carry-forward guidance (Article 2.7)

– Substitute loss-carry forwards (Article 2.8)

– Equity Gain or loss inclusion election (Article 2.9)

– Allocation of taxes arising under a Blended CFC Tax Regimes (Article 2.10)

– The extension of the taxable distribution method election to insurance investment entities (Article 3.1)

– Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity (Article 3.2)

– The extension of Additional Capital to include Restricted Tier One Capital (Article 3.3)

– Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Article 3.4)

– Portfolio shareholding election (Article 3.5)

– Application of Tax transparency election to Mutual insurance companies (Article 3.6).

– Currency Conversion Rules (Article 1 of the Second Set of OECD Administrative Guidance )

– Tax Credits Guidance (MTTCs) (Article 2 Second Set of OECD Administrative Guidance)

– SBIE Rules (Article 3 Second Set of OECD Administrative Guidance)

The proposed amendments in the June 2025 Draft Bill (including Draft Regulations) include amendments for the June 2024 and January 2025 OECD Administrative Guidance (AG). This includes:

– Aggregate DTL Category basis – Article 1.2.1 June 2024 AG

– Exclusion of certain types of GL accounts and separate tracking – Article 1.2.1 June 2024 AG

– Exclusion of GL accounts that generate standalone DTAs – Article 1.2.1 June 2024 AG

– Exclusion of swinging accounts and separate tracking – Article 1.2.1 June 2024 AG

– FIFO/LIFO Basis – Article 1.2.2 June 2024 AG

– Aggregation of Short-term DTLs – Article 1.2.3 June 2024 AG

– Reversal of DTLs that accrued before the Transition Year – Article 1.2.2 June 2024 AG

– 5 year unclaimed accrual election – Article 1.2.2 June 2024 AG

– Recalculated deferred tax where GloBE carrying value differs from accounting carrying value – Article 2.1.2 June 2024 AG

– GloBE and accounting carrying values and the Transition Rules – Article 2.1.2 June 2024 AG

– Additional provisions for Intragroup transactions accounted for at cost – Article 2.1.2 June 2024 AG

– General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps – Article 3.1.3 June 2024 AG

– Specific rules for foreign PEs/CFCs, Hybrids/reverse hybrids with domestic source income – Article 3.1.3 June 2024 AG

– Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries – Article 3.1.3 June 2024 AG

– Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Reverse Hybrid: 5 step process – Article 4.2 June 2024 AG

– Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Reverse Hybrids – Article 4.2.2 June 2024 AG

– Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules – Article 4.2.3 June 2024 AG

– Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity – Article 5.2.2 June 2024 AG

– Non-group owners: Partially owned Flow-through Entities – Article 5.3.2 June 2024 AG

– Non-group owners: Indirect minority ownership – Article 5.3.5 June 2024 AG

– Taxes allocated to a flow-through entity -Article 5.4.2 June 2024 AG

– Hybrid entities – Taxes pushed down include indirect owners – Article 5.5.2 June 2024 AG

– Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system – Article 5.5.4 June 2024 AG

– Extension of taxes pushed down to include Reverse Hybrids – Article 5.6.2 June 2024 AG

– Option to not impose top-up tax liabilities on SPVs used in securitization transactions – Article 6.1.4 June 2024 AG

– Amendments to the Switch-Off rule – Article 6.1.4 June 2024 AG

– New definition: Securitization Entity – 6.1.4 June 2024 AG

– New definition: Securitization Arrangement – Article 6.1.4 June 2024 AG

– Amendments to Article 9.1 of the GloBE Rules for the deferred tax transition rules (governmental arrangements including new CIT regimes and a grace period) (January 2025 AG).

Note that two aspects of the June 2024 OECD Administrative are not included as the Ministry of Finance takes the view that the existing law covers these:

– Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and reverse hybrids -Article 4.1 June 2024 AG

– Exclusion of GloBE carrying value from SBIE – Article 2.1.2 June 2024 AG

Safe Harbour and Penalty Relief Guidance

Section 5-7 of the law authorizes the Ministry of Finance to establish Safe Harbour rules that are approved by the OECD.

Article 5-7-10 of the Regulations includes the OECD QDMTT Safe Harbour.

Article 5-7-21 of the Regulations includes the OECD NMCE Simplified Calculations Safe Harbour.

Articles 5-7-30:5-7-38 of the Regulations includes the Transitional CbCR Safe Harbour. This includes the amendments made in the December 2023 OECD Administrative Guidance.

The October 7, 2024 Proposal to introduce the UTPR also includes the Transitional UTPR Safe Harbour for accounting periods beginning after December 31, 2024.

For the purposes of the QDMTT safe harbour, the June 2025 Draft Bill proposes that the Switch-off rule will be amended so that QDMTTs that impose the top-up tax liability computed for a Securitisation Entity on other Constituent Entities located in the jurisdiction or that exclude Securitisation Entities from the scope of the tax would both still meet the Consistency Standard.

For the purposes of the UTPR, the Draft Bill proposes to exclude Securitisation Entities from liability to top-up taxes under the UTPR (for accounting periods beginning after December 31, 2024).

The June 2025 Draft Bill also includes some further amendments to the Safe Harbours to reflect the January 2025 OECD Administrative Guidance:

– Amendments to Transitional CbCR Safe Harbour for Article 9.1 amendments (January 2025 AG); and

– Amendments to QDMTT Safe Harbour for Article 9.1 amendments (January 2025 AG).

ELECTIONS

Elections in the OECD Model Rules

The Act includes all of the key elections as provided in the OECD Model Rules, including:

-Excluded Entity Election (Section 1-3(3) of the Act)

-Election to use the Realization Method Section 3-2(5) of the Act)

-Stock-Based Compensation Election (Section 3-2(2) of the Act)

-Election to Spread Capital Gains (Section 3-2(6) of the Act)

-Consolidation Election (Section 3-2(8) of the Act)

-GloBE Loss Election (Section 4-4(1)of the Act)

-Tax Transparency Election (Section 7-5(1) of the Act)

-Prior Year Adjustment Election (Section 4-1-4 of the Regulations)

-Taxable distribution Election (Section 7-6(1) of the Act)

-Unclaimed Accrual Election (Section 4-2(1) of the Act)

-Distribution Tax Regime Election (Section 7-3(1) of the Act)

-Substance-Based Income Exclusion Election (Section 5-3(1) of the Act)

-Deemed Disposal of Assets (Section 6-2(4)of the Act)

-De minimis Election (Section 5-5(1)of the Act)

Elections in the Administrative Guidance

All of the elections from the OECD Administrative Guidance are included in the Law/Regulations, including:

-Portfolio Shareholding Election

-Negative Tax Carry-Forward Election

-Foreign Exchange Hedge Election

-Debt Release Election

-Equity Gain or loss inclusion election

New Elections

There are no new elections in the Law.

DEVIATIONS FROM THE OECD MODEL RULES/EU GLOBAL MINIMUM TAX DIRECTIVE

Whilst the OECD Model Rules apply to multinational groups, the EU Minimum Tax Directive also applies the global minimum tax to domestic groups.

As Norway is a member of the EEA and not the EU it is not bound by the EU Directive, however, it intends to take a similar approach and apply the global minimum tax to purely domestic groups (eg where a UPE is resident in Norway, the IIR will apply  to both Norwegian and foreign group entities).

The October 2024 proposal to introduce the UTPR includes the Initial Phase of International Activity exemption, but does not include the optional anti-inversion rule in Article 9.3.5 of the OECD Model Rules.

DOMESTIC MINIMUM TAX

General

Section 2-6 of the law includes a domestic minimum tax intended to be a QDMTT.

QDMTT Design Features

Section 2-6(2) of the law provides that the method of calculation is to take the general top-up tax calculation (or additional top-up tax from a prior year). However, this is then effectively recalculated taking account of some adjustments that are provided in the OECD Administrative Guidance

Push-Down Taxes

Tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules must be excluded, as provided in the OECD Administrative Guidance. This is included in Section 2-6(3) of the law.

This preserves Norway’s primary right to tax income accruing to a Norwegian member entity which is also a CFC. If there were no statutory derogation from the general GloBE rules for the calculation of the domestic minimum tax, and the CFC tax paid by the controlling company abroad were included in the included taxes of the Norwegian CFC, the effective tax rate would be increased. Therefore, excluding the CFC tax from the Norwegian CFCs covered taxes allows Norway to tax low-taxed income at a higher rate than would be the case under an IIR.

Section 2-6(3) also prevents the pushdown of tax to hybrids, PEs and for taxes on distributions (except for Norwegian withholding tax on dividends).

100% of the Top-Up Tax

The notes to the original draft law provided that Top-up Tax that is subject to the QDMTT is based on the whole amount of the Jurisdictional Top-up Tax calculated, irrespective of the Ownership Interests held in the Constituent Entities located in Norway by any Parent Entity of the MNE Group.

Jurisdictions may design their QDMTT legislation to apply only where all the domestic Constituent Entities in the jurisdiction are 100% owned by the UPE or a POPE for the entire Fiscal Year, but this is not the approach Norway has taken.

Accounting Standard

The QDMTT applies the general GloBE rules to determine the accounting standard used. As such, the domestic minimum tax is calculated using the financial accounting standard of the UPE, and, if that is not practicable, on the basis of an accepted accounting standard or an approved accounting standard, if:

                -the constituent entity’s financial statements are prepared in accordance with that standard,

                 -the information contained in the financial statements is reliable; and

                 -permanent differences of more than EUR 1 million are conformed with the UPEs accounting standard.

Initial Phase of International Activity Exemption.

The UTPR exclusion for MNEs in their initial phase of international activity does not need to be included in a QDMTT, however, it can be included. The Second Set of OECD Administrative Guidance provides jurisdictions with three options regarding the temporary UTPR exclusion in their QDMTT legislation.

Option one allows the jurisdiction not to adopt it.

Option two allows the jurisdiction to adopt it but limits it to cases where no Parent Entity is required to apply a Qualified Income Inclusion Rule with respect to Constituent Entities of an MNE Group located in the QDMTT jurisdiction.

Option three allows the jurisdiction to adopt it without any limitations.

The October 2024 proposal to introduce the UTPR, suggests Norway will apply option one.

Securitisation Entities

The Fourth Set of OECD Administrative Guidance includes guidance on the treatment of Securitisation Entities.

Jurisdictions implementing QDMTTs may exclude a Securitisation Entity from its scope (such that the Securitisation Entity is not treated as a Constituent Entity for the purposes of that QDMTT).

Where it does apply a QDMTT to securitisation entities, the QDMTT is not required to impose top-up tax liabilities on SPVs used in securitisation transactions and any QDMTT liability in respect of a Securitisation Entity should generally be imposed on other Constituent Entities located in the jurisdiction.

The June 2025 Consultation proposal is inconclusive on which approach to take and is seeking feedback, as such this is excluded from the current Draft Bill.

Registration

Not provided in the law.

Filing

Every Constituent Entity located in Norway will have an obligation to file a GloBE Information Return (GIR) in Norway. However, this obligation could be discharged if the GIR is filed by:

– The Ultimate Parent Entity, or

– The Designated Filing Entity.

Where the GIR is being filed by either the Ultimate Parent Entity or the Designated Filing Entity, the Constituent Entity is required to file a notification with the Revenue.

Both the GIR and associated notifications are required to be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).

Group entities are also required to also file a top-up tax return. The due date for the top-up tax return is one month after the GIR filing deadline.

Payment

The enacted law does not include provisions relating to the payment of top-up tax. The original draft law proposed that the deadline for the payment of top-up tax was three weeks after the deadline for submission of the top-up tax return.

Penalties

Existing penalty provisions are to apply for GloBE purposes, however, Norway is to adopt transitional penalty relief for financial years beginning before January 1, 2027 and ending before July 1, 2028. This will not be legislated but the Directorate of Taxation will issue further guidelines.

None issued.

TO DO