The Norwegian Prime Minister announced plans on 5 May 2013 for a modest tax cut for mainland businesses and for increasing taxes on oil companies and multinationals.
This plan includes a reduction in the general corporate tax to 27% from 28% starting in 2014. Neighboring Sweden recently cut its corporate tax rate to 22%, and Denmark plans to reach the same level by 2016. Finland, meanwhile, is aiming to take its tax rate to 20%.
Norway’s oil-and-gas industry has helped keep unemployment low, public finances intact and wages rapidly growing. While this has insulated Norway from much of Europe’s economic malaise, many companies outside the energy sector have not been competitive. The tax cut therefore aims to boost the competitive position of these non-oil companies.
The government has said that oil companies will not benefit from the tax cut because there is an increase in the special petroleum tax to 51% from 50% that will offset the effect of the corporate income tax reduction for these companies.
