Norway

Bullet

The Norwegian system:

Norwegian petroleum tax

  • Exploration refund: 78% of expenses related to exploration up to PDO are refunded year after spend
  • The exploration can be financed through bank facilities with pledge in the tax refunds
  • 22% uplift over 4 years ( 5.5 % p.a) for capital expenditure on development projects
  • Depreciation of capital expenditure: linear over 6 years
  • Companies not in a tax position can carry forward their losses and the uplift with interest
  • Marginal government take: 78%

Petroleum tax calculation:

+ Operating income (norm price)

- Operating expenses

- Linear depreciation for investments (6 years)

- Exploration expenses, R&D and decommissioning

- CO2-tax, NOX-tax and area fee

- Interest cost

= Corporation tax base (tax rate: 28 % (27 % from 1.1.2014))

+ Onshore interest cost*

– Uplift (5.5% of investment for 4 years)

= Special tax base (tax rate: 50 % (51 % from 1.1.2014))

* based on criteria defined in the petroleum tax act

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