Updates on central compliance requirements in Norway

In this newsletter we have covered some of the most relevant compliance updates that all companies with business activities in Norway should be aware of.

Next year, in 2024, all companies must submit the tax return in a new electronic format. The old RF forms are history, and the new theme-based tax return will apply for all types of companies.

• When the company’s tax return in 2024 (for the 2023 income year) shall be submitted, the previous used RF forms cannot be used.
• The tax return must be submitted from an accounting or annual accounts system that supports the submission of the new tax return. The possibility to type in numbers via Altinn will be shut down.
• Most sole proprietorships can choose whether to submit their tax return via an accounting or annual accounts system or via skatteetaten.no.
• The exception is sole proprietorships with a full accounting obligation. These must submit via an accounting or annual accounts system.

Some of the old attachment forms and business statements has been replaced by an industry-specific specification that is submitted along with the new tax return. The remaining forms have been incorporated in the new tax return. The crucial factor is whether the information is common regardless of the corporate form or if it is specific, for example, to sole proprietorships or companies. The industry-specific specification and the tax return/company return are divided into topics and fields. Information that naturally belongs together is grouped under the various topics. The basis for the categorization is the statutory financial statement.

The old form RF-1022 which reconciles reported salary and fringes to the accounting system is still to be filed as a part of the tax return.

• hydropower plants
• shipping companies
• petroleum companies
• Norwegian-controlled foreign companies (NOKUS)
• cooperative enterprises
• new tax rules for aquaculture and the reporting on this area will also apply for the income year 2023

The new tax return may also include some pre-filled information. The Tax Administration wants to share more of the information they have access to and that can be of use for when completing the tax return, such as tax loss carried forward, information from the Register of Shareholders and the Norwegian Central Securities Depository (VPS) etc.

There will not be any changes to the basis of the tax calculation. The corporate tax rate in Norway was 22% in 2022 and will remain unchanged for the income year 2023 (to be filed in 2024).

Foreign businesses engaging in taxable activities in Norway are obligated to maintain accounting records in accordance with the Accounting Act. If KPMG Tax AS is appointed as your representative in Norway with respect to bookkeeping, the SAF-T requirements will be fulfilled. For the clients where we prepare the Statutory Financial Statements and/or Corporate Income Tax Return, we can assist the client with the SAF-T requirements upon request.

This includes, among other things, ensuring that all recorded information can be presented in a standardized electronic format known as SAF-T.

Recently, Norwegian Tax Authorities have announced a heightened focus on two main requirements for foreign businesses, which will be monitored through SAF-T. These requirements concern the use of a separate invoice number series for sales to Norwegian customers and the correct accounting of bank transactions. Although these rules already exist, it has been communicated that there will be a change in practice, with increased emphasis on ensuring compliance with these regulations.

For foreign businesses operating in Norway, there is already a requirement to have a distinct invoice number series for Norwegian customers. This will now be considered a crucial part of accounting, particularly for compliance with Norwegian accounting standards. Maintaining a separate invoice number series provides better traceability and helps ensure that transactions are correctly attributed to the Norwegian business. This requirement applies to outgoing invoices to Norwegian customers.

The Accounting Act stipulates that all financial transactions, including bank transactions, must be accounted for. This includes both incoming and outgoing payments, transfers, and any financial movements related to the Norwegian business. For foreign businesses that have previously neglected to account for bank transactions for the Norwegian business, it is now a mandatory requirement to ensure complete and accurate accounting. Bank transactions must be recorded with correct dates and amounts and included in the accounting documentation.

For foreign businesses operating in Norway, it is crucial to have a distinct invoice number series for Norwegian customers and ensure that all bank transactions related to the Norwegian business are accurately accounted for. This will ensure compliance with Norwegian accounting standards and meet the requirements for SAF-T reporting. These are essential steps to comply with Norwegian accounting rules and ensure that recorded information aligns with standardized SAF-T requirements.

It is not entirely clear how the situation can be specifically addressed for your company, as it may require different approaches. The essential aspect is to ensure that a solution is implemented.

We understand that implementing solutions to meet these requirements may pose challenges. We would be happy to assist you in any way we can. We are available for questions and look forward to your feedback.

The Norwegian Transparency Act (the Act) became effective 1 July 2022. The purpose of the Act is to promote enterprises' respect for fundamental human rights and decent working conditions in connection with the production of goods and the provision of services and ensure the general public access to information. The Act is applicable for larger enterprises, which are entities exceeding two of the following three conditions for two consecutive years:

1. Turnover of MNOK 70 or higher
2. Balance sheet total of MNOK 35 or higher
3. Average number of employees during the accounting year of 50 or more

Parent companies are considered to fall under the scope of the act if the subsidiary and the parent company combined exceeds the threshold.

The Act set out three key requirements:

1. a duty to carry out due diligence to identify actual or potential negative impact on fundamental human rights and working conditions, in own operations, in the supply chain and towards business partners,
2. publish an annual statement (first deadline was 30. June 2023), and to
3. respond to inquiries.

The Norwegian Consumer Authority has started inspections to ensure that annual statements are published in accordance with the Act. Although the Act has been effective for more than a year, we see that many companies have not made sufficiently arrangements to meet the requirements of the Act.  We recommend all our client subject to this Act to establish routines and guidelines to ensure compliance, and we are happy to assist you in this process. 

On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force in the EU.

The CSRD will amend the existing Non-Financial Reporting Directive (NFRD) and will substantially increase reporting requirements on the companies falling within its scope in its efforts to expand the sustainability information for users.

CSRD will apply to large and listed EU companies, small and medium-sized listed EU undertakings and large non-EU companies which do substantial business in the EU or have securities listed on EU regulated markets. The reporting requirements will apply progressively from 2024 - 2028 depending on the type of undertaking: 

*Subject to change – the reporting directive has recently been amended to account for inflation, which will result in fewer companies being in scope

The sustainability reporting in accordance with CSRD shall be included in the management report and prepared in accordance with the European Standards for Sustainability Reporting (ESRS).

The ESRS consists of 12 standards covering environmental, social and governance matters. Two of the standards are general in nature and are mandatory, while the rest are subject to a double materiality assessment. This means that a company must consider how ESG-matters in the ESRS can be material both i) in terms of its implications for the company's financial value and ii) in terms of the company's impact on the world at large. The company will report only relevant information and may omit the information in question that is not relevant (“material”) for its business model and activity.

CSRD introduces a requirement for limited assurance on the sustainability reporting with the end goal to move to reasonable assurance in the longer term. The assurance shall also cover the undertaking's double materiality assessment.

Earlier this year, the Securities Law Committee published their report on CSRD (NOU 2023: 15) and the incorporation of the rules into Norwegian law. In the report, the Committee proposes amendments to the Accounting Act (regnskapsloven), the Securities Trading Act (verdipapirhandelloven) and the Audit and Auditors Act (revisorloven).

EU Member States will have until 6 July 2024 to transpose CSRD into their national laws. The Ministry of Finance has previously indicated that Norway aims to comply with this deadline. CSRD will therefore most likely come into force in Norway in 2024. 

We recommend all our clients to consider whether they will be subject to CSRD and to prepare for the upcoming reporting requirements.

For questions regarding the Norwegian Transparency Act, contact Solfrid and Maja.

For questions regarding SAF-T and Bookkeeping, contact Joachim.

For questions regarding new Tax Return, contact Rigmor and Øyvind.