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Norway Ready To Implement Digital Tax

by Ulrika Lomas, Tax-News.com, Brussels

27 January 2020


Norway's Minister of Finance, Siv Jensen, has said that Norway will adopt a national digital services tax if negotiations towards an international digital tax framework fail to materialize this year.

Speaking to Norwegian daily newspaper Klassekampen, Jensen expressed optimism that an international digital tax agreement will be reached in 2020. However, she added that if this does not happen, "we must immediately get a Norwegian solution in place."

Jensen declined to say whether a Norwegian digital tax will be similar in form to France's recently enacted digital services tax. However, she suggested that putting in place such a tax in Norway would be a relatively simple task as "we have gained a good understanding of the problem area."

Norway has been considering the taxation of companies operating predominately in the digital realm for some time, and in January 2018 Jensen wrote to parliament's finance committee that the Government was considering possibilities for the taxation of multinational companies' "value creation" in Norway, including in the area of value-added tax.

The letter noted that governments are currently limited in their ability to tax the profits of companies that provide goods and services via digital platforms, as these companies typically lack a physical presence in the jurisdictions in which they generate sales.

"This means that if a foreign company sells goods and services to consumers in Norway and it happens without the company being physically present here, we will normally have limited tax on income from such sales," Jensen wrote.

She went on to note that it is seen as unfair that companies can earn "huge revenues" that are subject to little or no tax.

Jensen also said in the letter to parliament that digital companies' sales in foreign markets should be subject to value-added tax there under the destination principle.

"The destination principle means that it is the country where consumption takes place which has the right to tax," she observed, adding later that sales tax "is an appropriate solution."

Although Jensen stressed at the time that the Government's preference was for a multilateral solution to avoid taxpayer uncertainty, her latest comments suggest that Norway is now more willing to act unilaterally on the matter.

TAGS: Finance | tax | value added tax (VAT) | sales tax | commerce | Norway | internet | e-commerce | transfer pricing | France | services | BEPS

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