The Norwegian Ministry of Finance on 11 May 2016 released a legislative proposal regarding country-by-country (CbC) reporting rules for tax purposes.
Under the legislative proposal—Prop. 120 L (2015-2016) Endringer i ligningsloven (land-for-land-rapportering til skattemyndighetene)—a Norwegian ultimate parent company of a multinational group with a consolidated revenue of NOK 6.5 billion or more would be required to submit a CbC report to the Norwegian tax authorities. The reporting requirement could also affect foreign group entities that are resident in Norway, if certain conditions are met.
The legislative proposal generally is in line with the model legislation stated in the final report under the base erosion and profit shifting (BEP) Action 13 relating to transfer pricing documentation and country-by-country reporting, issued in October 2015 and is a follow-up the 2016 Norwegian state budget and the government's previous suggestions for tax reform. Read TaxNewsFlash-Transfer Pricing
Under the current legislative proposal a Norwegian ultimate parent company of a multinational group would be required to submit a CbC report if the group has a consolidated revenue of NOK 6.5 billion or more. A "secondary reporting obligation" would apply for a Norwegian subsidiary of a multinational group when:
Norway has signed the multilateral competent authority agreement for the automatic exchange of CbC reports; accordingly, the Norwegian tax authorities will annually exchange on an automatic basis the CbC reports received from Norwegian reporting entities.
The CbC reports will be submitted for the first time by 31 December 2017 for the fiscal year beginning 1 January 2016 or later. Further, it is proposed that the "secondary reporting obligation" will be effective from the fiscal year 2017. No specific penalties have been announced; thus, general administrative penalties will apply.
According to the Ministry of Finance, the CbC reports would primarily be used by the Norwegian tax authorities for high-level transfer pricing risk assessment purposes. However, the reports also could be used in evaluating other BEPS-related risks and, when appropriate, for economic and statistical analysis. The CbC reporting rules would relate to fiscal years beginning 1 January 2016 or later despite the fact that the legislation would likely be enacted this year.
For more information, contact a tax professional with KPMG's Global Transfer Pricing Services group in Norway.
Per Daniel Nyberg | +47 40639265 | firstname.lastname@example.org
Marius Basteviken | +47 4063 9032 | email@example.com
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.