Proposal to enact a new BEPS Pillar 2 Law

On November 24th 2023, the Norwegian Government introduced a new bill, implementing the Pillar 2 into domestic law. The new legislation, which is based on the Pillar 2 Models Rules, as developed by OECD/G20 Inclusive Framework, shall ensure a minimum effective tax rate of 15 percent for large multinational enterprises. In addition, adjustments to both the Tax Administration Act and the Tax Payment Act have been proposed in order to ensure compliant implementation of the global minimum tax under the Pillar 2 rules.

The Norwegian legislation on top-up tax will apply to Norwegian and international groups with revenue, according to consolidated accounts, of at least €750 million. The groups must have fulfilled the global income requirements for at least two of the four previous accounting years.

The proposed new Act on Global Minimum Tax will implement an Income Inclusion Rule (IIR) and a Domestic Minimum Top-Up Tax rule (DMTT) from 1 January 2024. 

The main differences between the proposal and the consultation paper

  • The Ministry of Finance has proposed to introduce the legislation in a separate act – Top-Up Tax Act (“Suppleringsskatteloven”) – contrary to the consultation paper where the interim proposal was to implement the legislation in a new chapter in the Norwegian Tax Act (“NTA”). In addition, the Ministry of Finance has proposed to include a reference in NTA paragraph 3-3 to the newly proposed Act.
  • The proposal envisages that the Top-Up Tax Act will be supplemented by a relatively comprehensive regulation, however this regulation is not included in the proposition. It is proposed that the regulatory provisions will be adopted at the same time as the Top-Up Tax Act comes into force, i.e., 1 January 2024.
  • The Ministry of Finance suggests including specific definitions such as “ownership interest” and “undertaxed entity” in the regulations.
  • The final proposal also includes more details regarding the DMTT and makes it clear that the intention of the Ministry of Finance is to ensure that the DMTT qualifies both as a QDMTT and pursuant to the QDMTT Safe Harbour under the OECD’s Model Rules.
  • The Government further proposes to include Safe Harbor rules in line with the OECD Model Rules. However, these will be implemented through regulations under the Top-Up Tax Act. Further details regarding the application of Safe Harbours, in particularly for Large Domestic Groups, are expected in the coming weeks.


The wording in the newly introduced bill is to a large extent similar to the OECD Model Rules. This is to assure alignment between the two sets of rules, as well as to avoid misinterpretations and inconsistency. Hence, the OECD Model Rules with the following commentary edition, will be key sources when interpreting the proposed Norwegian legislation.

Also, larger Norwegian based groups with no international activities in terms of subsidiaries and branches are covered in line with the EEA Agreement. This will for example include aquaculture and energy companies which so far have not prepared and filed any CbC reports. Many Norwegian companies have now realized that BEPS Pillar 2 will become a reality that they cannot opt away from and that the annual compliance costs and resources required will be significant.

Many companies have raised concerns to the fact that there are significant differences between accounting and tax in Norway. Furthermore, several Norwegian companies have large deferred tax assets in terms of temporary and some extent permanent differences. Also, the participation exemption method (“fritaksmetoden”) regarding tax treatment of dividends etc. raises concerns since this potentially could trigger Norwegian DMTT.

The Norwegian tax administration has established a separate tax section to deal with the reporting and administrative issues such as the GloBE Information Return. It is positive that resources in terms of employees and funds for reporting systems have been introduced.

Still, we observe that so far, few countries outside the EU/EEA have progressed much in terms of implementation of the IIR from 2024, with a few exemptions such as the UK, South-Korea and Canada. In other word, so far this appears to be a European rally due to the EU Directive. We also note that many jurisdictions seem to pay most attention to the Domestic Minimum Top-up tax rule, in order to secure that activities in their own country are not taxed in a foreign country.   

The proposal does not include an Under-Taxed Payment Rule (UTPR), which the Ministry intends to implement at a later stage, with reference to the ongoing processes at the OECD and the need for the Inclusive Framework countries to provide more time to implement this rule.


It is proposed that the adjustments to the Tax Administration Act and the Tax Payment Act will be effective on 1 January 2024. The Top Up Tax Act will apply to fiscal years beginning after 31 December 2023.