Building a Solid Foundation for UK and Norwegian Businesses

FOLLOWING a period of consolidation and cost efficiency programmes, oil and gas related companies are beginning to see an improvement in performance and trade. This has been aided by the increase in the oil price which has doubled in two years. Companies have been exploring international opportunities as well as building on the foundations in the North Sea.

Work has begun recently on laying the largest Norwegian pipeline in the Norwegian North Sea to the Johan Sverdrup field which is expected to carry up to 660,000 barrels of oil into Mongstad, north of Bergen. The Mariner project in the UK North Sea is expected to start production in second half of 2018. This is a sign of commitment and investment currently being made in the North Sea.

AAB have seen an increase in demand for tax advice and support for UK companies operating in Norwegian waters and vice versa, when a Norwegian company is operating in UK waters. Our highly experienced international tax team delivered a “Doing Business in Norway” training course earlier this year which provided companies with an outline and understanding of the tax considerations for non-Norwegian companies when working in Norway. AAB are also supporting a number of Norwegian businesses with operations in the UK.

It is important to understand the movements of both your company employees and subcontractors as this can trigger unexpected and unbudgeted tax liabilities. For example if a UK employee is working offshore in Norwegian continental waters, there will be a liability from day 1 to Norwegian personal income taxes and an obligation for the employer to submit a report to the Norwegian Tax Authorities. There are fines and penalties for late reporting.

If the offshore activities exceed 30 days in any 12 month period, the company will create a permanent establishment (PE) and trigger a Norwegian corporate income tax liability and a requirement to file reports and returns.

There may also be a requirement for an audit of the Norwegian accounts. The thresholds have recently changed with effect from, January 10, 2018 and it is important for companies to assess the position and requirement for an audit. There are exemptions which may be relevant and time requirements which companies should understand.

The Norwegian corporate tax reporting deadline of 31 May 2018 is fast approaching (for 2017 tax returns) and if you have not prepared or filed the returns yet, professional advice should be sought immediately. AAB have a team of international tax specialists who can help with your overseas compliance requirements and provide advice and support when operating in Norway and further afield. AAB are also delighted to be speaking at the Aberdeen-Norway Gateway Event on Wednesday, June 6, 2018.

For more information please contact Helen Brown ( or your usual AAB contact.