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Norway – Transfer Pricing (2025)

The Arm’s Length Principle is incorporated into Norwegian domestic law through the Tax Act, notably Tax Act Section 13-1. The statute requires that transactions between related parties be measured against the arm’s length standard and expressly refers to the OECD Transfer Pricing Guidelines as the interpretative and practical guidance to be applied; see Tax Act Section 13-1 (1) and the general reference to the OECD Guidelines in Tax Act Section 13-1 (4). The profile does not provide a domestic legal definition of “related parties,” so identification of related party relationships relies on administrative practice and OECD guidance. For petroleum matters, the Petroleum Taxation Act establishes a norm price mechanism for valuing crude oil under Petroleum Taxation Act Section 4; this norm price applies to all crude oil transactions and is not limited to associated enterprise transactions.

Arm’s Length Principle and the role of the OECD Guidelines

The Tax Act implements the Arm’s Length Principle and instructs that the OECD Transfer Pricing Guidelines be taken into account when applying Section 13-1. Tax Act Section 13-1 (4) thus functions as the domestic gateway for OECD guidance: the Guidelines inform comparability assessments, method selection and other practical aspects of the arm’s length analysis. Consequently, OECD approaches to comparability, adjustments, ranges and methodological issues are applicable in Norway insofar as the tax administration applies them in audits and assessments.

The country profile explicitly states that there is no domestic statutory definition of related parties. Therefore, while the Tax Act applies an arm’s length standard, the identification of related parties is guided by administrative practice and OECD guidance rather than a single domestic legal definition included in the profile.

Methods and application criteria

Norwegian law does not prescribe specific transfer pricing methods nor a legal hierarchy of methods. Tax Act Section 13-1 (4) contains a general reference to the OECD Guidelines and stipulates that “the most appropriate method” should be applied to each transaction. As a result, there is no statutory list that mandates CUP, Resale Price, Cost Plus, TNMM, Profit Split or other methods; method selection is fact-specific, following the OECD framework and the principle of using the most appropriate method for the given facts and circumstances.

Comparability and ranges

Norway follows the OECD Guidelines on comparability analysis as set out in Chapter III. The Tax Act’s reference to the OECD Guidelines means that comparability adjustments are required in line with OECD guidance and taxpayers should explain such adjustments in their transfer pricing documentation. Nevertheless, the law or administrative practice does not impose a strict requirement to make working capital adjustments when preparing benchmarks from databases. There is a domestic preference for local comparables, but foreign or pan-European comparables are not automatically excluded and will be considered on a case-by-case basis. The tax authority is authorized to use all information in its possession, including “secret comparables”; however, the use of secret comparables as the sole basis for an assessment is regarded administratively as a last resort. The concept of an arm’s length range is accepted; use of the interquartile range is not mandatory but commonly employed by both taxpayers and the tax authority to refine or narrow a range.

Documentation and reporting

Transfer pricing documentation is required under Norwegian law, but the legal requirements do not identically mirror the OECD three-tier documentation structure in terms of mandatory master file and local file. The profile indicates that the Country-by-Country Report (CbC) is required, and there are specific transfer pricing returns (either separate or annexed to the tax return) as provided for in the Tax Assessment Act, notably Sections 8-11 and 8-12. The legislation does not make master file or local file mandatory in the same express terms, according to the profile. The documentation is to be prepared and produced upon request by the tax authority and, according to the practice reflected in the profile, should be filed in response to a request within 45 days. Documentation may be submitted in Norwegian, Swedish, Danish, or English, while the Country-by-Country Report must be filed in English. There are no transfer pricing-specific penalties set out in the profile; instead, general tax administration penalties apply, including the time penalty under Tax Administration Act Section 14-1.

Safe harbours, exemptions and materiality thresholds

Norway does not have statutory safe harbours for particular industries or transaction types as reported in the profile. Exemptions from documentation obligations are available based on group size: enterprises are exempt from preparing and filing transfer pricing documentation if the group has fewer than 250 employees in the accounting year and either sales revenues of 400 million Norwegian kroner or less, or a balance sheet total of 350 million Norwegian kroner or less. This exemption does not apply to entities subject to the special tax on petroleum; see Section 5 of the Petroleum Tax Act. Regarding CbC filing, multinational enterprises with consolidated revenues of 6,5 billion Norwegian kroner or less are exempt from filing the Country-by-Country Report. These exemptions are set out in the Tax Assessment Act, specifically in Section 8-11 paragraph 3 and Section 8-12 paragraph 4.

APAs and MAP; procedures and timing

Norway provides a set of administrative mechanisms to prevent and resolve transfer pricing disputes. The profile indicates the availability of enhanced engagement programs, Advance Pricing Agreements (APAs), and Mutual Agreement Procedures (MAP). The profile does not provide detailed procedural timelines for APAs or MAPs, and suggests consulting the Norway MAP Profile for further information. Additionally, pursuant to Petroleum Taxation Act Section 6 paragraph 5, unilateral rulings are available with respect to intra-group sales of natural gas. Full procedural details, including whether unilateral, bilateral or multilateral APAs are handled systematically, are not exhaustively described in the profile.

Sanctions and other considerations

No special transfer pricing sanctions are documented in the profile; instead, general penalty provisions of the Tax Administration Act apply, notably Tax Administration Act Section 14-1 concerning time penalties. Secondary adjustments are neither mandated nor prohibited by law and, in administrative practice, secondary adjustments are generally not made. Recharacterisation and year-end adjustments are allowed; taxpayers may make year-end adjustments and the tax administration may consider recharacterisation consistent with the arm’s length standard. On attribution to permanent establishments, Norway follows the Authorised OECD Approach (AOA). The profile states that five treaties in force incorporate the revised Article 7 (OECD MTC 2010 and later), and that for older treaties Norway applies the AOA as a general analytical framework with certain limitations in the fiction of separate and independent enterprises.

Other sectoral and procedural points

For commodities, the petroleum regime contains a specific pricing approach: Petroleum Taxation Act Section 4 prescribes the application of a norm price for crude oil and that this price applies to all transactions. For intangibles the profile records that there is no domestic statute providing specific guidance; instead, Norway applies the OECD Guidelines to intangible transactions. Although the HTVI approach of Chapter VI has not been explicitly adopted in a stand-alone domestic provision, the Tax Act’s reference to the OECD Guidelines means the HTVI approach could be applied by Norwegian tax authorities consistent with OECD guidance. With respect to intra-group services, the simplified approach for low value-adding intra-group services from Chapter 7, Section D of the OECD Guidelines is available to taxpayers, but the profile warns that this simplification does not restrict the Norwegian oil taxation authorities from conducting a thorough transfer pricing analysis for costs allocated to upstream companies subject to the special petroleum tax. In financial transactions Norway applies the OECD Guidelines and additionally has domestic rules limiting interest deductibility under Tax Act Section 6-41, and as of 1 July 2021 introduced a withholding tax on interest payments to related parties resident in low-tax jurisdictions.

Conclusion

Norway implements the arm’s length principle through the Tax Act with explicit incorporation of the OECD Transfer Pricing Guidelines; the domestic framework therefore relies heavily on OECD guidance for method selection, comparability analysis and documentation practice. There is no statutory prescription of specific methods or a legal hierarchy; the most appropriate method must be applied on a case-by-case basis. Documentation obligations exist, including CbC reporting subject to thresholds, and administrative dispute resolution mechanisms such as APAs and MAPs are available, while certain sectors (notably petroleum) are governed by specific statutory pricing mechanisms.

References

This profile is based on the OECD country profiles page: https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html

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La información presentada en este perfil se ha generado tomando como base datos y contenidos publicados por la OCDE. Si bien se busca reflejar fielmente la información disponible, no se garantiza su exactitud ni exhaustividad y se recomienda consultar las fuentes originales de la OCDE para fines oficiales o de investigación.