Global Business Services - GBS

While the tax contributes to environmental and revenue objectives, it also adds complexities to the aviation industry’s operational landscape, requiring foreign companies to navigate and comply with Norwegian tax regulations.

The tax was introduced as a part of Norway’s efforts to mitigate the environmental impact of air travel and to generate revenue for environmental projects. The tax applies to all departing flights from Norwegian airports.

Foreign airlines operating flights departing from Norwegian airports are required to collect the passenger tax from their customers and remit it to the Norwegian tax authorities. Compliance with the Norwegian passenger tax regulations is mandatory for all airlines operating in Norwegian airspace and serving Norwegian airports.

Foreign airlines must ensure that their ticketing and reservation systems are configured to include the passenger tax when selling tickets for flights departing from Norwegian airports. Some foreign airlines may also face administrative challenges in implementing and complying with the Norwegian passenger tax regulations, especially if they operate in multiple jurisdictions with different taxation systems.

Foreign airlines that do not have a fixed place of business in Norway are required to register through a representative. The airline and the representative are jointly liable for the reporting and payment of the tax.

We can act as your registered representative in Norway and ensure that you are compliant with the current rates and regulations. We will also function as the authorities’ point of contact, and assist with replies to enquiries/during audits etc.

We can help you with:

• Registration through a representative in Norway, ensuring compliance with Norwegian passenger tax regulations – including setting up systems to collect the tax from customers and remit to Norwegian tax authorities
• Navigation of administrative challenges associated with implementing and complying with Norwegian passenger tax regulations for foreign airlines – including understanding reporting requirements and addressing any inquiries or audits from Norwegian tax authorities
• Continuously monitoring changes in the Norwegian passenger tax rates, ensuring that foreign airlines are aware of any updates and adjusting their systems accordingly to reflect the current rates
• Legal and regulatory advisory services to foreign airlines, offering insights into the latest developments in Norwegian tax law and helping navigate complex regulatory frameworks
• Leveraging technology solutions to streamline tax compliance processes for foreign airlines, such as implementing automated reporting systems or integrating tax calculation modules into ticketing platforms

An updated and accurate accounting is crucial for management and decision-making in any organization or project. A thorough and precise accounting process lays the foundation for sound financial management.

Foreign companies that are considered VAT or tax liable to Norway under Norwegian domestic law, will have a book-keeping obligation in Norway.

If the book-keeping obligation exists, your company must follow both Norwegian book-keeping regulations and GAAP. You can do the bookkeeping abroad, however specific conditions apply. Book-keeping abroad may be especially challenging if the number of transactions and values involved is significant, and where automatic bank-integration may be required to manage the task.

We use cloud-based ERP solutions, which enables your stakeholders full transparency and overview of the financial status in Norway – through automated currency conversion, tailor-made reporting and Power BI integration on live data.

Any company with an obligation to keep accounts in Norway, must be compliant with the Norwegian SAF-T requirements. These are stated in the book-keeping regulations. All entities required to keep books in Norway, including non-resident entities subject to VAT and/or corporate Norwegian tax, must comply with the requirement and submit a SAF-T file upon request from the tax authorities. A SAF-T file is an XML file that contains a copy of the  accounts, and which is structured in a way decided by the tax authorities. The accounts and tax codes must be presented by use of Standard Norwegian Chart of Accounts and Standard Tax Codes.

Our cost- and time efficient book-keeping services ensure that you always have an updated and accurate financial picture in relation to activity in Norway, and compliance with all local requirements.

We can help you with:

• Updated accounts
• Real-time reporting
• Budgeting, forecasting, and analysis
• Value Added Tax (VAT) reporting
• SAF-T reporting
• Other reporting to Norwegian authorities

Regardless of whether your foreign company is exempted from tax liability in accordance with a tax treaty, you still have a formal obligation to prepare a corporate tax return.

The self-declaration principle in Norwegian tax law states that taxpayers, both individuals and companies, are responsible for disclosing and reporting their taxable income, deductions, and other relevant information to the tax authorities. The principle entails that taxpayers are obligated to submit accurate, complete, and timely tax returns in accordance with applicable tax rules and regulations.

In practice, this means that, as a taxpayer, you must calculate your taxable income, report any deductions or credits you may be eligible for, and submit the tax return to the tax authorities within the deadlines set by law. The principle places the responsibility on the taxpayer.

However, the tax authorities have the authority to conduct checks, audits, and investigations to verify the accuracy of the information provided and ensure compliance with tax rules. Even minor inaccuracies can lead to significant burdens and costs in the form of corrections, additional taxes, and late payment penalties.

In addition to offering technical preparation, we also conduct reconciliations, analyses, and control calculations. Our state authorized accountants work closely together with our tax lawyers to ensure accuracy of the tax return.

We can help you with:

• Quality assurance of the numerical basis and documentation of the balance sheet
• Preparation of the tax return
• Preparation of necessary attachments
• Dialogue with auditor
• Submission in Altinn
• Dialogue with the tax authorities

All employers know that salaries must be paid punctually and correctly, and many employers experience that the local requirements are increasingly complex.

We can assist you by providing an outsourcing package tailored to your company’s needs. As part of the multi-disciplinary environment, we can call upon experts in a variety of areas to assist and find the right solutions, where both financial and legal aspects are secured

We can help you with:

• Setting up your local payroll in our local system
• Monthly processing of the local salaries
• Monthly reporting to the Norwegian authorities
• Processing the book-keeping entries for the financial accounting
• Performing the year-end processing based on the local requirements related to salary certificates
• Registration and deregistration of employees to the local social security and tax authorities when required by local payroll requirements
• Correct calculation and reporting of salary and tax
• Payslip distribution to employees
• Expenses and outlays

If your foreign company has seconded employees to a project, or hires our employees to a client in Norway, you are obligated to withhold and pay tax from the employees’ salaries. It does not matter whether the employee is tax-liable to Norway or not, and if the employee does not have a tax card, 50 % deduction shall be applied. It may be possible, however, to apply for an exemption. Specific conditions apply.

All salary and other benefits in cash or kind (subsistence allowance, lodging, etc.) derived from work performed in Norway must also be reported to the Norwegian tax authorities. The foreign company shall be registered as an employer in Norway and is obligated to prepare and submit a monthly report to the tax authorities, the “A-melding”. The reporting is conducted through the tax authorities electronic reporting portal, Altinn.

Our payroll experts will ensure payroll compliance regarding your shadow payroll in a consistent and efficient way. We also have authorized HR- and payroll specialists on our team and are supported by experienced payroll accountants.

We can help you with:

• Initial evaluation of the employee’s tax and social security status
• Monthly payroll and tax calculations: payslip to employees
• Monthly shadow payroll reporting
• Assistance with bi-monthly payment of withheld taxes and social security premiums

Additional services include (ADD LINK):

• HR administration support services
• Personal tax return preparation
• Employer registration of the foreign company
• Applications for residence and work permits
• Immigration
• Application for HES-cards for the building and construction industry

The annual accounts service involves the preparation and presentation of a company’s financial results and position at the end of a financial year. This includes the balance sheet, income statement and cash flow statement.

The complexity may be increased if the company’s book-keeping has been tasked to an internal or external service center outside of Norway. The general ledger will often not be aligned with Norwegian GAAP, which makes it necessary to “translate” the accounts through a mapping process.

Our state-authorized accountants and accounting staff work together with our legal staff to assist businesses with the preparation of annual accounts. We have deep knowledge and experience with relevant tools, standards and regulations, and we facilitate cost and time saving results by working together. This way, we insure that the annual accounts are correct, in accordance with regulations and standards, and provide a clear picture of your company’s financial status. This is also important for external stakeholders and authorities. We prepare the SFS in either NGAAP or IFRS. We also assist with conversion from foreign GAAP to NGAAP if requested.

Our team ensure that deadlines are met, exemptions are used, new rules are complied with. We can also assist in the dialogue with the auditor and submit the financial statements through the Altinn portal.

We can help you with:

• Review and reconciliation of balance sheet
• Layout of annual accounts with notes and draft annual report
• Cash flow statement
• Dialogue with auditor
• Electronic submission of annual accounts
• Dialogue with the Accounting Register

If your company is one of them, it is important to be aware that Norway has substantial registration and reporting requirements for foreign companies. It does not matter whether your company delivers short-term enterprise projects, or if you rent out your employees.

Most foreign companies are not familiar with the regulatory landscape and need guidance to meet the demands, from both authorities and Norwegian clients and employers. The commitments must be fulfilled throughout the whole contract chain, which the Norwegian client can be held solidary responsible for, and lacking fulfillment can trigger demands that the client covers any tax- and duty demands for their foreign subcontractors.

We can help you with:

• Registration in the Entity or Company Census
• Registration of contracts and employees to the Tax authorities
• Clarification of obligations regarding social security membership, occupational injury insurance and mandatory pension schemes
• Assessments of permanent establishment for your company and tax liability for your company and employees
• Fulfillment of minimum wage requirements, average working time, collective bargaining agreements, equal treatment according to the Temporary Agency Work Directive, etc.
• Payroll services, shadow payroll, preparation of payslips
• Salary reporting, application for tax cards and change of address notification
• ID verification of your employees with Skatteetaten
• Ordering HES cards for construction sites
• Book-keeping, VAT reporting and annual accounts
• Tax returns for companies and individuals

If your company’s taxable turnover exceeds NOK 50 000 within a 12-month period, then you’re most likely obligated to register for VAT.

To register for VAT in Norway, you must submit an application form and provide necessary documentation – such as proof of incorporation, identification documents, proof of tax liable turnover and, if applicable, information about your Norwegian representative.

Once registered, your company must comply with Norwegian VAT regulations, including charging the appropriate VAT rates on goods and services sold in Norway. You must also submit regular VAT returns and payments to the Norwegian tax authorities. The VAT returns must be submitted from an ERP system (manual filing not possible). Finally, you must be able to present a SAF-T file that concerns all transactions related to the activity or sale in Norway.

Failing to register for VAT when required, may result in penalties and fines. KPMG is the single largest provider of VAT representation services in Norway. Our client span from service companies with small projects, to large contractors with multi-billion infrastructure projects or direct distributors of goods, B2B or B2C to the Norwegian market.

We can help you with:

• Local VAT accounts
• Bi-monthly VAT returns
• Assistance with payment or refund of VAT
• SAF-T compliance

Those who seek initial support and advice that we provide under our “Market Entry” and “Bid Support” concepts (see below) , and those who approach primarily for our payroll, accounting and compliance assistance that we already have presented.  What the two categories seems to have in common, is that they stay with us and and strenghten our cooperation as they continue their client journey from initial strategic market support to operational support, or vice versa.

We can assist you in all phases of the initial strategic evaluation and analysis of the Norwegian market, all the way to supporting you in the bid process and assisting with all relevant compliance services in the operational phase.

We assist our clients through the process, and add value to our clients’ team by introducing professional advisors with special competence on areas that might have a huge impact on the tender, to complement the client’s own bid-team. We will in the following give a few illustrative examples of assistance that may turn out to be the difference between success and failure. The list is not extensive, and we adjust to our client’s needs.

Pre-qualification assistance

Pre-qualification procedures are very common in larger projects. These may be divided into formal and quantifiables like financial strenght, solidity and references, but we also frequently see other criteria like HES track record, specific lincenses or approvals. Within building and construction and oil service, suppliers are expoected to register for approval in public databases like “Startbank” and “Achilles”. Public clients frequently let all companies that seek for prequalification undergo an Integrity Due Dilligence (“IDD”) to see if the potential bidder may represent a potential reputational risk.

We assist our clients to prepare for the prequalification and registration in the required supplier databases. We can also conduct an IDD on our client to prepare for what the Buyer may come up with. In case of adverse findings, we assist our clients to adress these findings.

Evaluation of the RFP

The traditional basis for a preparing a tender, is very often a RFP document where you, the client, has provided relevant background information about the project, and a description of the services that is required. In many cases the client will also include their own commercial terms, or refer to standardized commercial terms (very common in building and construction and oil service),- but often with their own amendments. While price will always be an important factor in any tender, we frequently see that both public authorities and large private companies may also introduce other specific evaluation criteria like Quality, Price-Quality reatio, lifespan cost, project plan, climate impact, ESG-requirements, sustainable solitions, and HSE, hereunder salary and working conditions.

We can assist with the initial RFP evaluation to identify and adress potential risks and areas of opportunity. The analysis may cover areas like financial, legal and commercial risk, but also potential tax and VAT structuring. IT is quite common that we and the client share tasks between us, and conclude the analysis with a GAP (SWOT?) analysis where we compare the issues identified with the company’s current possibilities to mitigate or take advantage of these issues.

Assistance in the bid-phase

• Tax and legal

We analyse the tax and legal aspects of the project that will have a direct or indirect effect of the costs (our pice) and the risk in the project. We help you to quantifyt these, so they can be included as input to your budgets. We may have to seek advance binding rulings for tax and VAT tratment in the project, if we see that such issues may represent a risk for the financial model.

• Labour conditions, minimum salaries etc

Labor cost may be an important factor in a projects cost-base. We assist you to optimize your compensation and benefit policies, hereunder work-rotation and shift-arrangements (if appliccable), while ensuring that you are compliant with the client’s requirements and Norwegian law.

• Financial model and review

Our financial team has extensive experience with the design, development and review of financial models. Our tax and accounting professionals work closely with the financial advisor to ensure that adecuate tax and accounting principles are implemented in the financial model, and that it is in conformity with tax and accounting legislation.

• Bid strategy, stakeholder management and negotiation support

We assist our clients to develop a strategy and actions to adress and fulfill the tender evaluation criteria. I public contracts we will also typically provide insights as to the possibility to introduce various assumptions, reservations and conditions in your tender. We can assist in the commercial negotiations regardind price and commercial terms.

• Red Team Review

Together with our clients, we set up a team to review the tender documentation in whole or in part, prior to submission. The team consists of experienced professionals with deep knowledge about the procurement process or, the client's "psychology" and the formal requirements. The team will not have been involved in our deliveries to the tender-process. The purpose is to challenge the tender document; "to read it with the client's glasses" with an aim of further improvement.

Before entering Norway, employees must have obtained the correct visa and/or permits to stay and work here.

EEA-citizens must only register with the immigration authorities. Third country nationals are required to have a valid residence permit for work before they can begin working in Norway. The permit must usually be approved before entering the country.

Our immigration experts assist with initial assessment of your employees’ situation and develop the most efficient application process to ensure that necessary permits are in order at the right time.

We can help you with:

• Initial analysis and evaluation of the actual documentation
• Practical assistance with preparation of the applications
• Follow-up dialogue with the authorities

Foreign companies’ HR departments that establish a subsidiary or a branch, or engage in a time-limited project in Norway, can benefit from local support to ensure that all local law requirements and regulations are met.

Employment Law

Norwegian employees may be on a local or seconded contract – or both. Foreign companies will typically have a range of policies in place, and a desire to use these policies across different jurisdictions.

Regardless of the employees’ status, Norwegian rules, in most cases, take precedence over home countries’ legislations or the companies’ own policies. The employer must consider specific requirements and laws regarding:

• work hours
• shift
• rotations
• minimum wages
• compensation
• living conditions
• regulations regarding conditions for hire-in of personnel
• limitations in use of self-employed workers

HR administration

If your company’s employees are members of the Norwegian Social Security Scheme, you will meet a wide range of obligations related to following up on employees during absence due to illness or temporary parental leave. The company must also set up a mandatory occupational injury insurance scheme, and a mandatory pension scheme.

We can help you with:

• Template employment and secondment agreements
• Adjustment of internal policies
• Administration of illness absence and salary refund
• Pension and insurance administration

Employees posted to Norway is initially considered taxable to Norway from day one. However, exemptions apply. Some may be exempt under a tax treaty, but may become taxable due to actual residence in Norway. Foreign employees may also become taxable if the employer meet certain Norwegian conditions, while the employer often also must comply with tax rules in their own home country.

An employee’s tax affairs are, in general, a personal responsibility. Even so, many employers offer assistance from tax advisors to make sure employee’s have the necessary insight and understanding of complex regulations leading to difficulties in the country of residence or work.

We can help you with:

• Initial analysis of tax position
• Preparation of personal tax return and avoidance of double taxation
• Communication with Norwegian authorities

Norwegian law required that most small, and all medium-sized and large companies have their statutory financial statements audited by a certified public auditor. If the correct information is unavailable or very time consuming to collect, this can be a challenging undertaking.

We facilitate the annual audit process to make sure your company’s audit runs as smoothly as possible, by working with documentation for reconciliation, and balance, prepare and reconcile the trial balance.

We can help you with:

• Taking on the role as your auditor’s first point of contact and managing the audit on your behalf
• Providing the auditor with the financial information and documentation required to carry out an efficient audit
• Preparing the company’s financial statements for you, whether you report under Dutch GAAP, IFRS og US GAAP
• Aligning your auditor’s comments and adjustments for inclusion in the company’s statutory financial statement
• If your business is part of a group that consolidates its results, we can prepare the necessary consolidation statement