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Norway govt urged to revise corporate, individual income tax rate

Norway govt urged to revise corporate, individual income tax rate

OSLO: The government proposed a cut in both corporate and individual income tax rates, alongside other adjustments to combat corporate base erosion and profit shifting (BEPS).

The Commission noted that the level of Norway’s corporate tax rate has stayed comparatively high when, both at a European level and globally, other countries’ rates have been lowered. In 2014, the statutory corporate tax rate was 1.7 percent higher than the OECD average, and 4.4 percent higher than the EU average.

It was therefore recommended that there should be a reduction in the country’s corporate tax rate to 20 percent from the current rate of 27 percent (in conjunction with a similar cut in its lowest rate of personal income tax), to dissuade companies from shifting profits out of Norway to more tax-friendly countries and to attract international business and investment, particularly having regard to future years when there will be an oil-sector slowdown.

The Commission provided one package of measures estimated to be approximately revenue-neutral, and another proposal involving tax reductions of NOK15bn (USD2.1bn). Overall, to balance the reduction in corporate tax, it decided that there should be a broadening of the tax base.