Proposal on taxation of foreign companies and employees with activity in the economic zones and on the continental shelf

As of today, Norway has not adopted laws that provide basis for taxing foreign persons’ and companies' income from aquaculture in the 200-mile zones and on the Norwegian continental shelf, as these activities take place outside the Norwegian territorial border at sea. With effect from the income year of 2024, a limited tax liability for foreign companies engaged in mineral activities, etc., in the 200-mile zones and on the Norwegian continental shelf was implemented. The Government has by submitting a consultation proposal of 2 April 2024, proposed to introduce a corresponding tax liability for foreigners' income from the aquaculture industry in the 200-mile zones and on the Norwegian continental shelf, as well as related activities and work.

According to the proposal, it is not a requirement that the foreign company itself holds the aquaculture license to be covered by the tax liability. Activities related to exploration and production also fall within the scope. Foreign companies, for instance, those conducting environmental surveys as contractors, will also be covered by the scope of the provision. There is no requirement for a direct contractual relationship, and indirect contractual relationships, such as subcontractors, are also covered by the scope of the provision.

The proposal also includes a tax liability for various forms of services and auxiliary activities related to aquaculture in the 200-mile zones and on the Norwegian continental shelf. This includes various forms of operational services, transportation activities and supply services, including wellboat services, feed boats, delousing and similar activities.

The Government also proposes a tax liability for foreigner’s employment income related to mineral activities, exploitation of renewable energy resources (offshore wind) and carbon management in the 200-mile zones and on the Norwegian continental shelf.

Furthermore, the Government suggests that wealth related to the mentioned business activities conducted by self-employed individuals in the 200-mile zones and on the Norwegian continental shelf, to be subject to wealth tax in Norway in the same manner as for other limited taxpayers.

Tax treaties between Norway and the foreign persons and companies’ home state may impose limitations on the taxation rights proposed in the consultation paper. The detailed content of each individual tax treaty, including the relationship between the relevant tax treaty and the proposed provisions for tax liability, must therefore be assessed specifically for each individual tax treaty.

The proposal has been submitted for consultation with a deadline of 17 June 2024.