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Taxation of Limited Liability Companies in Norway

Taxation of Limited Liability Companies in Norway

Businessmen who want to open a company in Norway that is registered as a limited liability company will need to comply with specific tax requirements. Under the Norwegian legislation, the limited liability company (LLC) is seen as a separate legal entity than its founders and thus, this business form will be taxed separately

As a Norwegian LLC, the company itself will be liable for a set of corporate taxes, including the value added tax (VAT). Any LLC registered in Norway is liable for the payment of a tax on profits, which is currently imposed at a rate of 23%. Our team of specialists in company formation in Norway can advise on all the taxes that are applicable when starting a Norwegian LLC

What are the main corporate taxes for a Norwegian LLC? 

Local and foreign LLCs operating in Norway are taxed following the same tax system, but several differences may arise. For example, a Norwegian based LLC will be liable for the tax on profits (known as the Advance Tax) on its worldwide income, while in the case of LLC registered elsewhere, which also operates on the Norwegian market, the tax on profits will only be applicable to the income obtained in this country. Some of the main important aspects concerning the taxation of a LLC are presented below: 

  • • the standard corporate income tax for LLCs is imposed at a rate of 23%, which must be paid in two equal installments;
  • • in the case of Norwegian LLCs that operate in the financial sector, the tax on profits is imposed at a rate of 25%;
  • • provided that a LLC operates in the petroleum sector in Norway, the tax will generally be imposed at the standard rate, but the tax can increase to 55% for specific activities developed in the field;
  • • the capital gains tax is applicable at the standard rate of 23%, but an exemption in this sense is granted in certain conditions; 
  • • the VAT is imposed at the standard rate of 25%, but LLCs can be imposed with lower VAT rates, in the situation in which their activities qualify for lower thresholds. 

Depending on how the procedure is going, the processing times for VAT registration in Norway can range from one day to several weeks. If you need support in obtaining your registration number as soon as possible, contact us. Our company incorporation specialists will help you draft and file the necessary documents.

What are other taxes available for companies in Norway? 

Norwegian companies are also liable to other types of taxes, such as the tonnage taxcustoms and excise duty, the stamp duty (imposed during the procedure of ownership transfer) and the real estate taxOur team of consultants in company formation in Norway can offer more information on the tax rates available for these types of taxes

Since any company usually has to hire employees, the LLC will also be liable to the payment of the social contributions for its employees. The tax is not fixed, as it varies by region, but certain Norwegian regions can provide an exemption on this tax; businessmen are invited to contact our team of specialists in company registration in Norway for more information on the country’s tax system