About government aid (state aid)

On this page, you’ll find information about what government aid is, relevant legislation, the tax schemes that are considered state aid, and what your duties as the beneficiary are.

Background

The EEA Agreement provides Norway with the right to participate in the EU’s internal market, or single market, which has the objective to strengthen the cooperation and the economic connections between the member states through fair competition and the observation of the same set of rules and regulations. The principle of the “four freedoms” is central to the EEA Agreement. This means that there must be, as a rule, free movement of goods, services, persons and capital throughout the EEA states.

The regulations on competition, state aid and public procurement are meant to guarantee a well-functioning internal market and fair competition for enterprises. The regulation of state aid is meant to safeguard that all economic operators face the same predictable framework and conditions throughout all EEA states when competing.

Specific information concerning beneficiaries’ reporting obligation

EEA legislation sets several requirements, both to the granter and the beneficiary of the state aid, in order to determine its compatibility with the EEA Agreement. The granter has an obligation to ensure that the aid beneficiary fulfils the legal requirements set by the EEA.

From and including the 2021 tax return, the Norwegian Tax Administration has therefore introduced new items on state aid in the tax return for private limited companies that must be completed by these companies. These items are meant to give the Tax Administration information that will provide a basis for audits of whether the beneficiary fulfils the requirements for the aid received.

These items in the tax return are an addition to the reporting obligation of all individual allocations of state aid exceeding EUR 100,000.

Regulations concerning state aid 

The regulations concerning state aid have been formulated in the form of a general prohibition on granting aid. In the EEA Agreement, article 61 (1), it says:

Save as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties, be incompatible with the functioning of this Agreement.

However, the prohibition is not absolute. There is a lot of elbow room to allocate aid in cases that are considered to be well substantiated through certain established motives. These motives include, for example, environmental protection, regional aid and research, innovation and development.

The EFTA Surveillance Authority (ESA) approves guidelines for the interpretation and implementation of state aid regulations. These guidelines are binding for ESA, and therefore also for the EEA-member states. The regulations mirror EU regulations in this field.

Government aid that cannot be considered insignificant aid, must be approved by ESA (EFTA Surveillance Authority) in order to comply with EEA legislation.

In order to simplify the case processing of different kinds of aid, the General Block Exemption Regulation (GBER) lists a number of categories of aid that have been pre-approved by ESA as compatible state aid. The general conditions and limitations resulting from this General Block Exemption Regulation must be fulfilled in order for the aid to be legal.

State aid that cannot be allocated either under the regulation for insignificant aid or the General Block Exemption Regulation must be notified and approved by ESA in order to be legal, before it can be implemented and funds disbursed. The conditions and requirements for state aid to be compatible are apparent in decisions made by ESA and in the regulations these decisions are based on.

The term “state aid” 

The term “state aid” in the EEA Agreement, article 61 (1) is loosely interpreted. The distribution of public funds “in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods” is considered to be state aid. This comprises both direct economic subsidies, but also other forms of direct and indirect subsidies to an enterprise that is an economic operator.  Tax benefits can be considered state aid. Benefits from which an enterprise profits indirectly may also be subject to the regulations.

Allocation of state aid  

State aid in the form of tax benefits is generally disbursed in connection with a claim for favourable tax treatment. Through this, it’s integrated in the general tax administration without the extra requirement for a special application. A special application is only required by some schemes, such as SkatteFUNN and applications for refunds of excise duties.

For benefits to comply with the regulations for state aid, a number of the conditions in the EEA regulations must be fulfilled. Since Norwegian legislation does not necessarily contain all of the EEA requirements in connection with a relevant aid scheme, it must be supplemented by EEA regulations in many cases.

As a rule, EEA regulations stipulate that an enterprise cannot have financial difficulties nor have unpaid claims for the repayment of unlawfully obtained aid following an ESA decision, before any state aid can be deemed legal. This follows from ESA’s guidelines for “undertakings in difficulty”, GBER, article 1 (4), letters (a) and (c), and the Guidelines for State aid for rescuing and restructuring non-financial undertakings in difficulty.

If and when an enterprise is deemed to be in difficulty according to state aid regulations is set out in GBER, article 2 (18) and the Guidelines for State aid for rescuing and restructuring non-financial undertakings in difficulty, 2.2.

For some of those schemes, only small and medium-sized enterprises (SME) are considered to qualify for aid measures. Often, the maximum aid amount that one individual enterprise can receive is regulated. This can include a ceiling on the amount of aid payable and in some cases even a ceiling on the percentage share (aid intensity) of the combined subsidy eligible costs that can be financed through state aid (the percentage share of the aid is determined by the sum of the combined subsidy eligible costs). These limitations are especially relevant for schemes approved under the General Block Exemption Regulation (GBER), but also individually notified schemes may be subject to a ceiling. The background for such rules is that any aid under the maximum amount is regarded to be of little impact on competition.

The ceiling in connection with the aid intensity is meant to guarantee a sufficient share of private financing in projects. The amount of aid possible needs to be assessed separately for each individual scheme. These rules must be considered in connection with the calculation rules at group level and the rules concerning cumulative effect. In a number of cases, different state aid distributions must be added together (cumulated), when determining whether a state aid distribution is within the limits of maximum amount and permitted aid intensity.

Received aid that is not compatible with the EEA regulations is considered unlawful, and the provider is under the obligation in these cases to recover disbursed aid with interest.

Read more about the regulations on state aid in the guidelines to the regulations about state aid (in Norwegian only) that have been compiled by the Ministry of Trade, Industry and Fisheries.

State Aid Register (ROFS) 

In order to guarantee control and transparency in the field of state aid, Norway is under obligation through the EEA Agreement to maintain a national register for grants of state aid, where allocations of EUR 100,000 or more are being published and open to the public. The objective with this register is to provide transparency for state aid, and by this to safeguard fair competition in the internal market. Any provider of state aid must report distributed amounts to the register. The register is maintained by the Brønnøysund Register Centre. The register is open to everyone and is searchable.

Tax breaks are regarded as state aid, and the Norwegian Tax Administration is the provider of such tax breaks. Businesses that receive a reduction in tax, must report this tax break to the Norwegian Tax Administration by submitting the RF-1354 form if the maximum amount for state aid is reached. The reporting deadline for this is 1st of December the year following the income year.

Who must submit reports for which aid schemes?

All businesses that receive a reduction in tax exceeding EUR 100,000 must report this to the Norwegian Tax Administration.

Allocations from different aid schemes must be reported separately. If one and the same enterprise receives individual benefits from different aid schemes, these benefits must not be summarised. This is under the condition that each benefit was allocated on a different legal basis (aid scheme).

Individual allocations under the same aid scheme must be summarised annually. The total annual amount for the aid beneficiary must be reported when exceeding the threshold amount. Note that an aid beneficiary may have many sub-entities receiving aid within one single aid scheme, while, although these are well under the threshold amount individually, their total combined amount will exceed the threshold amount for this aid beneficiary. Therefore, it’s recommended, when in doubt, to report the benefit anyway, even though it may be below the threshold amount.

The Tax Administration will report the information provided by the aid beneficiary to the Brønnøysund Register Centre.

There is no EEA legal requirement to report aid below the amount of EUR 100,000 to the register, but granters wishing to register aid below the threshold amount have the option to do this.

Please note that the total aid to all enterprises in a business group must be taken into consideration when determining whether the aid allocation exceeds the threshold amount and therefore is subject to reporting obligations. The term “group” should be understood as it’s applied in EEA legislation.

Read more about reporting of state aid in the Ministry of Trade, Industry and Fisheries’ guidelines for the reporting of state aid to the State Aid Register (in Norwegian only).

What information must be reported?

See detailed information in the guidance on how to submit state aid.

Reporting deadline: 

The deadline to report information on aid for the previous income year is 1 December. 

Calculation of granted aid and threshold limits for reporting 

The reporting obligation applies to aid granted that corresponds to an amount exceeding the threshold amount. Aid given in the form of tax benefits must be calculated per year. We want to stress that enterprises reporting aid to the Tax Administration must state the amount in Norwegian kroner. The aid beneficiaries must determine whether the amount exceeds the threshold amount. The Tax Administration will use the official currency rate set by ESA when converting the Norwegian aid amount into EUR. However, aid beneficiaries may choose to report aid below the threshold amount in order to ensure compliance with the reporting obligation.

In order to determine the subsidy amount, the aid beneficiary must calculate the difference between the received tax benefit and the general rate that would have applied without the aid. This difference must be reported to the Norwegian Tax Administration if it exceeds the threshold amount.

The public register will show tax benefits in intervals. Intervals are used instead of the exact aid amount in order to impede the possible deduction of underlying information on the price of goods and hourly rates, purchase quantity and consumption.

Description of the different tax schemes that are considered state aid 

Here is an overview of the aid schemes that must be considered state aid. With each aid scheme, you’ll find information about the elements in the scheme, relevant EEA legislation and the legal basis in the Norwegian tax regulations.

Legal basis: The Storting resolution concerning duty on electric power, section 1, subsection 2, letter (a), and the Excise Duty Regulations, section 3-12-4.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER).

The reduced rate for the industry applies to electrical power used by companies that are registered under specific industrial codes according to Statistic Norway’s Standard Industrial Classification SN2007. The reduced rate applies only to electrical power that is used in connection with the actual production process.

The term “production process” has no legal definition in the Norwegian excise duty legislation. However, section 3-12-9, subsection 1, of the Excise Duty Regulations, lists rules for certain types of consumption that definitely fall outside the application area of the reduced rate. These rules state that neither exemption nor reduced rates are given for electrical power provided to administration buildings.

Aid beneficiary: Enterprises within industry and mining, and sheltered industrial production workshops, according to industrial codes listed in the Excise Duty Regulations, section 3-12-4, second paragraph.

Legal basis: The Storting resolution concerning duty on electric power, section 1, subsection 2, letter (a), and the Excise Duty Regulations, section 3-12-5.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER).

The reduced rate scheme applies to district heating plants that are registered with the industry code 35 300, and to district heating plants operating on a license from the Norwegian Water Resources and Energy Directorate. A reduced rate will only be granted if the plant, with the exception of a start-up period of up to three years, uses at least 50 percent waste, bioenergy, waste heat and/or heat pumps, as an energy source, and if they supply district heating to consumers outside their own proper business activity.

Aid beneficiary: Enterprise operating a district heating plant, with an industry code according to section 3-12-5 of the Excise Duty Regulations.

Legal basis: The Storting resolution concerning duty on electric power, section 1, subsection 2, letter (b).

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER).

Electricity supplied in the special initiatives’ zone is subject to reduced rates. The term “special initiatives’ zone” applies to Troms and Finnmark county with the exception of the municipalities of Balsfjord, Bardu, Dyrøy, Gratangen, Harstad, Ibestad, Kvæfjord, Lavangen, Målselv, Salangen, Senja, Sørreisa, Tjeldsund and Tromsø. The reduced rate applies to all types of business activity within this specified geographic area.

Aid beneficiary: Enterprises using electric power in Troms and Finnmark, with the exceptions listed in section 1, subsection 1, letter (b), of the Storting resolution concerning duty on electric power.

Legal basis: The Storting resolution concerning duty on electric power, section 1, subsection 2, letter (c), and the Excise Duty Regulations, section 3-12-6. The provision was repealed with effect from 1 January 2023.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER). 

The scheme applies to deliveries of electric power to data centres with an electricity load exceeding 0.5 MW. “Data centre” is defined as an enterprise whose core business is the storage and processing of data.

It is not possible to cumulate the electricity load of several data centres, for example, one main data centre and a copy or a back-up centre at a different location. The regulations do not apply to data centres operating in support functions as part of an enterprise with a core business of, for example, financial or engineering services.

The calculation of the electricity load, and of the reduced rate, is limited to electrical power used for servers, cooling systems, pumps, lighting, safety devices, generators and devices that directly support the function of the servers. There must be a continuous electricity load exceeding 0.5 MW during the invoiced period covered by the excise tax return, according to section 8-4-2 of the Tax Administration Regulation. Periods of power cuts/interruption of production following necessary maintenance, servicing and other upkeep of the equipment, buildings or machinery must not be included in this. This means, that these days must be disregarded in the calculation of whether the electricity load exceeds 0.5 MW in the period in question. It is assumed that the data centres can document these types of interruption of production through service agreements and similar.

Aid beneficiary: Enterprises operating as data centres with an electricity load exceeding 0.5 MW, whose core business consists of the storage and processing of data, according to section 3-12-6 of the Excise Duty Regulations.

Legal basis: The Storting resolution concerning duty on electric power, section 1, subsection 2, letter (e), and the Excise Duty Regulations, section 3-12-8.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER). 

The scheme applies to the delivery of electric power to industry that produces or transforms energy products (“LNG”). The reduced rate applies to electric power used in connection with the actual production process. The specific energy products covered by the reduced rate have been stated with reference to positions in the Customs Tariff in section 3-12-8 of the Excise Duty Regulations.

Aid beneficiary: Enterprises using electricity in the production and transformation of energy products according to the definition of energy products in Section 3-12-8, subsection 2, of the Excise Duty Regulations.

Legal basis: The Storting resolution concerning duty on electric power, section 1, subsection 2, letter (d), and the Excise Duty Regulations, section 3-12-7.

EEA approval: The scheme has been approved (notified) by ESA (Decision No 216/16/COL) according to Article 61 (3) c of the EEA Agreement in accordance with the Guidelines on State aid for climate, environmental protection and energy.

The scheme applies to electricity directly provided to commercial vessels. Drilling ships and oil rigs are considered “vessels” in this connection. Ships that are laid up, ships permanently removed from service, ships used as housing, hotels, offices, workshops or storage facilities, are not considered commercial vessels. Similarly, ships under repair, reconstruction, ships that are in dock, etc., are not considered commercial vessels. These restrictions do not cover repairs on ships that lie alongside quay if the ship is meant to continue its travel.

Aid beneficiary: Enterprises owning or operating commercial vessels.

Legal basis: The Storting resolution concerning duty on electric power, section 2, subsection 1, letter (f), and the Excise Duty Regulations, section 3-12-18. 

EEA approval: The tax exemption is considered by the Norwegian authorities to be state aid compatible with the EEA agreement under article 44 of the General Block Exemption Regulation (GBER)., with reference to the Energy Tax Directive (2003/93/EC). 

Aid beneficiary: Producers of all renewable energy sources (including solar, wind and hydropower) who deliver to subscribers within the same property. 

Legal basis: The Storting resolution concerning duty on emissions of NOX, section 2, subsection 2, letter (d), and the Excise Duty Regulations, section 3-19-12.

EEA approval: The scheme has been approved (notified) by ESA (Decision No 027/18/COL) according to Article 61 (3) c of the EEA Agreement in accordance with the Guidelines on State aid for climate, environmental protection and energy.

An exemption from the tax payable on emissions of NOX is granted for emission units that fall under an environmental agreement with the Norwegian state concerning the reduction of NOX emissions.

This exemption is applicable from the time and date of affiliation to the NOX Agreement, see section 3-9-12, subsection 2 of the Norwegian Excise Duty Regulations. The effective date is the date of issue on the Participant Certificate by the Nox Fund. The basis for the exemption must be documented with the Participant Certificate. The enterprises’ individual emission units must be specifically included in the agreement in order to be covered by the tax exemption. The overall affiliation of an enterprise is not sufficient unless it’s also clear which specific units are included.

Aid beneficiary: Enterprises liable to NOx tax, but who have chosen to join the Agreement.

Legal basis: The Storting resolution concerning duty on CO2-, section 2, letter (g), and the Excise Duty Regulations, section 3-6-6, subsection 1, first sentence. For the income year 2024, there is a reduced rate.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER). 

CO2 tax on mineral oil and petrol for usage that results in emissions within allocated quotas according to the Greenhouse Gas Emission Trading Act will be fully refunded. The refund scheme does not include usage resulting in emissions within allocated quotas from mineral products covered by the Storting resolution concerning the CO2 tax for petroleum activities on the continental shelf.

Aid beneficiary: Enterprises taking delivery of mineral oil and petrol for use in activities that result in emissions within allocated quotas according to the Greenhouse Gas Emission Trading Act, according to section 3-6-6 of the Excise Duty Regulations.

Legal basis: The Storting resolution concerning CO2 tax on mineral products, section 1, letter (c), and the Excise Duty Regulations, section 3-6-6, subsection 1, second sentence.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER).

The CO2 tax on mineral oil and petrol for usage that results in emissions within allocated quotas according to the Greenhouse Gas Emission Trading Act is fully refunded. With regards to the CO2 tax on Natural Gas and LPG, the difference between the full rate and the reduced rates is refunded. For LPG, the reduced rate is NOK 0, which means that the tax payable on LPG will be refunded in full. The refund scheme does not include usage resulting in emissions within allocated quotas from mineral products covered by the Storting resolution concerning the CO2 tax for petroleum activities on the continental shelf.

Aid beneficiary: Enterprises receiving Natural Gas and LPG for use in activities resulting in emissions within allocated quotas according to the Greenhouse Gas Emission Trading Act, according to section 3-6-6 of the Excise Duty Regulations.

Legal basis: The Storting resolution concerning the basic tax on the incineration of hazardous waste, section 2, and the Excise Duty Regulations, section 3-13-5.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER). 

Exemption is granted for the incineration of hazardous waste. Hazardous waste means waste as mentioned in § 11-2 of the waste regulations. "Hazardous waste" includes waste types such as impregnated wood, creosote, products with brominated flame retardants and phthalates and waste oil. The exemption for hazardous waste is limited to the hazardous waste that is actually incinerated, and not to the plant as such.

Aid beneficiary: Incineration plants that burn both hazardous waste.

Legal basis: The Storting resolution concerning the basic tax on the incineration of hazardous waste, section 2, and the Excise Duty Regulations, section 3-13-6.

EEA approval: The scheme has been reported to ESA according to Article 44 of the General Block Exemption Regulation (GBER). 

Exemption is granted for the incineration of waste if CO2 is captured and stored permanently. It is a requirement that CO2 is permanently stored in a geological formation approved by the environmental authorities. The exemption does not cover capture and storage originating from waste that does not contain fossil material, or hazardous waste. It must be documented which sources the captured CO2 originates from.

Aid beneficiary: Incineration plants that burn both hazardous waste.

Legal basis: The Value Added Tax Act, section 6-7, subsections 1 and 2.

EEA approval: The scheme has been approved (notified) by ESA (Decision No 150/15/COL, extensions in No 228/17/COL and No 148/20/COL).

Self-employed persons registered in the Value Added Tax Register who deal in or lease electric cars, must not calculate VAT on this revenue. The VAT exemption applies only, if the electric car is regulated by the decision on excise duties in the chapter on tax on motor vehicles, etc., and section 7, subsection 1 (i), in the sub-chapter on one-off registration tax. This applies to motor vehicles that run exclusively on electricity, including electricity generated in fuel cells. The exemption does not apply to motor vehicles with a battery that can be supplied with electricity generated by an external combustion engine when the car is running. In addition, the electric cars must be subject to registration pursuant to the Road Traffic Act. The VAT exemption also applies to large electric buses and heavy electric lorries, even if these vehicles are not covered by the one-off registration tax. Furthermore, the exemption applies to electric mopeds, but not to regular electric bicycles.

The aid amount is considered to be 25 percent of the revenue covered by the exemption.

Aid beneficiary: Enterprises that produce and supply electric cars.

Legal basis: The Value Added Tax Act, section 6-2. 

EEA approval: The scheme has been approved (notified) by ESA (Decision No 023/16/COL). 

Self-employed persons registered in the Value Added Tax Register who supply electronic news services must not calculate VAT on this revenue. This is under the condition that the exemption as much as possible is limited to the current rules for VAT exemption on newspapers in paper format, and that the main criterion is linked to the medium’s content. The exemption therefore applies to services that contain a broad coverage of news and current affairs aimed at the public. Services must have an editor-in-chief and news must be published on at least a one a week or more. Publications which predominantly provide information about or are aimed at only one specific sector or interest, do not qualify for the exemption. The same applies to the sale of individual articles. 

The aid amount is considered to be 25 percent of the revenue covered by the exemption. 

Aid beneficiary: Media companies publishing digital news services.  

Legal basis: The Taxation Act, section 16-40 and FSFIN (the Ministry of Finance’s regulations pursuant to the Taxation Act), section 16-40.

EEA approval: The scheme has been reported to ESA according to Article 25 of the General Block Exemption Regulation (GBER).

SkatteFUNN is a rights-based tax incentive scheme that provides its users with a tax deduction when the conditions set out in section 16-40 of the Taxation Act are fulfilled.

This tax deduction is not a taxable benefit for the taxpayer, see section 5-31, letter c, of the Taxation Act.

The Norwegian Tax Administration provides this type of aid in connection with an enterprise’s tax assessment. The aid is only granted to enterprises that have had their SkatteFunn project approved by the Research Council of Norway. The tax deductions, etc., are added to the income deductions for actual expenses. If the deductions exceed the taxpayer’s total tax in the relevant income year, the taxpayer receives the surplus as a disbursement.

The conditions are described in detail in the guide Skatte-ABC for 2024 under the topic “F-29 Forsknings- og utviklingskostnader - SkatteFUNN” (Research and development expenses, in Norwegian only).

Aid beneficiary: Enterprises claiming deductions for SkatteFUNN.

Legal basis: The Taxation Act, section 14-51

EEA approval: The scheme has been approved (notified) by ESA (Decision No 150/16/COL) according to Article 61 (3) c of the EEA Agreement and the Guidelines on state aid for climate, environmental protection and energy.

Fixed assets in wind power plants that were acquired from 19 June 2015 up to and including the income year 2021 may be depreciated with equal annual amounts on a straight-line basis over a period of five years, see section 14-51 of the Taxation Act. This is under the condition that work on the project cannot have been commenced before 19 June 2015.

The same applies to internal grid systems and the concrete foundations for wind power plants.

You can find general information about balance depreciation in the guide Skatte-ABC 2024 "D-2 Driftsmiddel – avskrivning på/inntektsføring av saldo"(Fixed asset – depreciation/ income recognition of balance, in Norwegian only).  Subchapter D-2-16.38 refers to «Vindkraftverk, særregel om avskrivning med like beløp over fem år” (Wind farms, special depreciation rule by equal amounts during a five-year period).

Aid beneficiary: Wind power plant owning enterprises that claim depreciation according to section 14-51 of the Taxation Act.

Legal basis: The Taxation Act, section 14-43, subsection 4 (repealed for income year 2024)  

EEA approval: The scheme was approved (notified) by ESA (Decision No 228/17/COL) according to Article 61 (3) c of the EEA Agreement including 2023.

Zero-emission vans acquired on 20 December 2016 or later could be depreciated individually/separately with an increased depreciation rate of 30 percent.

This increased depreciation rate applied to vans that ran exclusively on electricity, including vehicles where the electricity was generated in fuel cells (hydrogen cars).

The exemption did not apply to motor vehicles with a battery that could be supplied with electricity generated by an external combustion engine when the car is running (hybrid vehicles).

You can find general information about balance depreciation in the guide Skatte-ABC 2023/24  "D-2 Driftsmiddel – avskrivning på/inntektsføring av saldo" (Fixed asset – depreciation/ income recognition of balance, in Norwegian only). Subchapter D-2-6.4.2 refers to «Spesielt om varebiler med nullutslipp ervervet 20. desember 2016 eller senere” (More about zero-emission vans acquired on 20 December 2016 or later).

Aid beneficiary: Enterprises operating zero-emission vans as business vehicles and claim depreciation according to section 14-43, subsection 3 of the Taxation Act.

Legal basis: The Taxation Act, section 8-10, and following, FSFIN (the Ministry of Finance’s regulations pursuant to the Taxation Act) section 8-11.

EEA approval: The scheme has been approved (notified) by ESA (Decision No 2014/17/COL) according to Article 61 (3) c of the EEA Agreement. Applicable for the period 2018 to 2027.

As a rule, ordinary taxation rules apply to shipping companies that are private and public limited companies, but companies that meet certain conditions may opt to be taxed under the special rules for the taxation of shipping companies, according to sections 8-10 to 8-20 of the Taxation Act. These special rules are called the Norwegian tonnage tax regime.

Section 8-11 of the Taxation Act sets out the requirements concerning the kind of assets that companies eligible to this tax scheme must own (qualifying assets), and the kind of assets they may own (legal assets). In most cases there is a requirement that a portion of the tonnage must be EEA-registered (“flag-link”). In addition, section 8-13 of the Taxation Act sets requirements concerning the kind of activities a company operating within the special tax regime may pursue.

Companies within the scheme/regime are generally exempt from tax liability on ordinary income but are subject to tax on financial income, see section 8-15 of the Taxation Act. Instead of being liable to tax on their shipping revenue, the companies at liable to tax on the basis of their tonnage, see section 8-16 of the Taxation Act.

The conditions are described in detail in the guide Skatte-ABC for 2024 under the item «Rederiselskaper» (Shipping companies, in Norwegian only).

Aid beneficiary: Shipping companies who have actively opted to be taxed according to the Tonnage tax regime.

Legal basis: The Taxation Act, section 6-53.

EEA approval: The scheme has been reported to ESA according to Article 21(3) of the General Block Exemption Regulation (GBER).

Personal taxpayers can claim a deduction from their general income of up to NOK 1,000,000 per year for share contributions to start-up companies. This deduction entitlement is in addition to the general right to include the share contribution in the input value of the shares being invested in. The share contribution must amount to at least NOK 30,000 in order to give entitlement to the deduction. Companies can receive a maximum of NOK 5,000,000 in contributions per year that are entitled for deduction. Additional conditions that apply both to the start-up company and to the investor have been determined. In these circumstances, an enterprise is considered to be a recipient of state aid, because the scheme increases the chances for investment in the company.

The conditions are described in detail in the guide Skatte-ABC for 2024 under the item «Aksjer - aksjeinnskudd i oppstartselskap” (Shares – share contributions in start-up companies, in Norwegian only).

Aid beneficiary: Enterprises receiving share contributions according to section 6-53 of the Taxation Act.

Legal basis: The Taxation Act, section 5-14, subsection 4, FSFIN (the Ministry of Finance’s regulations pursuant to the Taxation Act), section 5-14-12 (before the changes applying from and including 2022).

EEA approval: The scheme has been approved (notified) by ESA (Decisions No 225/17/COL and 079/19/COL) according to Article 61 (3) c of the EEA Agreement.

The provision for this included an exception from general rules for employment-related options. The taxation of the advantage gained by the redemption of shares took place only at the moment of realisation of the shares, under the condition of certain requirements being fulfilled. These requirements applied to the employer company, the employee and the option. If the advantage was in excess of NOK 1,000,000, the excess amount was to be treated according to general rules about employment-related options.

With regards to options allocated from and including 12 October 2021 to the end of the 2021 income year, see item 6.4.2 in the guide Skatte-ABC for 2021/22 «Finansielle instrumenter – opsjoner mv. i arbeidsforhold» (Financial instruments - options and other employment related products, in Norwegian only).

With regards to transitional rules at the introduction of new rules from 2022, see the guide Skatte-ABC for 2021/22 «Finansielle instrumenter – opsjoner mv. i arbeidsforhold» (Financial instruments - options and other employment related products, in Norwegian only), item 8.8.

Aid beneficiary: Enterprises giving options to their employees, according to section 5-14, subsection 4 of the Taxation Act.

Legal basis: The Taxation Act, section 5-14, subsection 2, FSFIN (the Ministry of Finance’s regulations pursuant to the Taxation Act), section 5-14-12.

EEA approval: The scheme has been approved (notified) by ESA (Decision No 267/21/COL) according to Article 61 (3) c of the EEA Agreement.

The provision contains an exception from the general rules about employment-related options. The exception means that neither the allocation of the redemption of share options in start-up and growth companies trigger taxation, under the condition that certain requirements are fulfilled.  These requirements apply to the employer company, the employee and the option. If these requirements are fulfilled, taxation only happens, when the shares realised, and taxation will be applied according to the shareholder model.

For more detailed information about the scheme, see the guide Skatte-ABC for 2024 «F-7 Finansielle instrumenter – opsjoner mv. I arbeidsforhold» (Financial instruments - options and other employment related products, in Norwegian only). subchapter F-7-6.

Aid beneficiary: Enterprises giving options to their employees, according to section 5-14, subsection 2, of the Taxation Act.

Legal basis: The Petroleum Taxation Act, section 3 b.

EEA approval: The scheme has been approved (notified) by ESA (Decision No 90/02/COL) according to Article 61 (3) c of the EEA Agreement and exception rules for the special initiatives’ zone. 

The provision in section 3 b of the Petroleum Taxation Acts concerning depreciations of offshore installations on a straight-line-basis over a period of 3 years constitutes state aid.

This provision has so far only been employed in connection with investments in connection with the Snøhvit project, among others the installations on Melkøya. 

Aid beneficiary: Enterprises with large-scale production facilities for LNG located in (former) Finnmark county or the Kåfjord, Skjervøy, Nordreisa or Kvænangen municipalities in Troms and Finnmark county.

Legal basis: The National Insurance Act, section 23-2, and the annual Storting resolution on taxes and duties to the Norwegian National Insurance Scheme.

EEA approval: The scheme regarding the 2014 to 2021 period was notified and approved by ESA (225/14/COL og 131/20/COL), in addition, there was a scheme from 2018 to 2021 for the transport and energy sectors approved through article 15 of the General Block Exemption Regulation. 3 (GBER 5/2018/REG)

Norway is divided into seven social security tax zones (zones I, Ia, II, III, IV, IVa and V), and the tax rates vary from 14.1% in zone I to 0% in zone V, cf. Storting resolution on setting taxes etc. to the national insurance for 2024. Access to paying employer's contribution at a reduced rate or 0 rate implies state aid. The reduction of tax in zone Ia is limited to trivial support, which can be granted without approval from ESA. The scheme in zones II – V must be approved by ESA. The Norwegian scheme with differentiated employer contribution is therefore based on two different EEA rules for state aid: One is ESA's guidelines for regional support (RAG), which provide the basis for the general part of the scheme in zones II – V. This part of the scheme has been notified to ESA and is approved for the period 2022 – 2027. The second set of rules that underlies the scheme with differentiated employer contribution is Regulation (EU) No. 2023/2831 on trivial aid, which is the basis for the free allowance scheme in zone Ia, for employers in financial difficulties and in business sectors that cannot receive regional aid according to RAG.

The scheme is described in detail in the Directorate of Taxes’ annual report on employer's national insurance contributions to the Norwegian National Insurance Scheme and in the guide Skatte-ABC 2024 «A-14 Arbeidsgiveravgift – avgiftssatser» (Employer’s national insurance contributions - rates, in Norwegian only).

Aid beneficiary: Enterprises applying for reduced rates.

Legal basis: The Taxation Act, section 5-12 according to FSFIN (the Ministry of Finance’s regulations pursuant to the Taxation Act), section 5-13-5 (repealed from 20th of December 2022).

EEA approval: The scheme has been approved (notified) by ESA (Decision no 150 /15/COL) according to the EEA Agreement, article 61 (3) c.

Aid beneficiary: Enterprises owning or leasing electric vehicles for use as company cars by their employees.

 

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