The Norwegian Government plans to cut corporate income tax and increase the tax contribution of the finance industry as part of its 2017 Budget. In line with a governmental agreement on tax reform, the Government announced on 6 October 2016 that, corporate tax will be cut from 26% this year to 24% in 2017. The parliamentary agreement also calls for the corporate tax to be further reduced, in 2018, to 23%.
However, the corporate tax cut will not apply to companies operating in the financial sector. They will continue to pay income tax at 25%. Furthermore, the Government has proposed a new 5% Financial Activities Tax based on gross salary payments. The Financial Activities Tax is intended to compensate for the industry’s exemption from value-added tax.The petroleum tax is increased to 54% (currently 53%).
The research and development (R&D) costs deduction is increased. Consequently, the maximum deductibility of qualifying R&D costs is increased to NOK 25 million (currently NOK 20 million) and for outsourced R&D to NOK 50 million (currently NOK 40 million).
