Tax: Norway

Sale/purchase of an aircraft constitutes a divestment of an asset. Any gain upon the divestment of an asset is considered taxable income. Any loss upon divestment shall be deductible to the same extent that a gain is taxable. The current statutory corporate income tax rate for 2019 is 22%.  

 As a starting point, value added tax (VAT) is levied on all supplies of goods and services made within the Norwegian VAT area, which includes the Norwegian mainland and all areas within the territorial border. The exceptions are Svalbard, Jan Mayen and the Norwegian dependencies (Bouvetøya, Queen Maud Land and Peter 1 Island). As such Norwegian VAT could apply on the sale (currently 25%). There are several exemptions and zero-rates available.  Most notably, according to the VAT Act Section 6-10 supply (e.g. sale or leasing) of aircrafts for commercial aviation activities and of military aircrafts shall be exempt from VAT. 

Norway is not a member of the European Union, thus the EU directives concerning income and VAT does not apply to Norwegian tax. 

 If delivery of the subject aircraft is made in Norway, Norwegian VAT regulations may apply even if parties to the sale and purchase agreement are EU residents. 

A sale of an aircraft in Norway for export is, as a starting point, Norwegian tax- and VAT-exempt (zero rated) if the purchaser is a foreign entity, cf. the Norwegian VAT Act Section 6-21.  

Export of an aircraft from Norway does not, as a starting point, trigger any tax. However, the exporter is, among other things, required to obtain export license from the relevant Aviation Authority which is subject to cost-based governmental fees.  

The main rule is that VAT (currently 25%) shall be payable on the import of all goods to the Norwegian VAT area. The parties importing an aircraft will, as a starting point, be able to get a deduction for the import VAT, provided that they are engaged in taxable activities in Norway. A company is liable to register for VAT if its supplies and withdrawals that are covered by the Norwegian VAT Act exceed NOK 50,000 during a 12-month period. The Norwegian VAT Act allows the company to be pre-registered for VAT in Norway. Once registered in the VAT Register, the import VAT will initially only have to be reported, but not paid, as a deduction may be required in the same tax return for VAT that the import took place.  

No VAT shall, however, be payable on the import of military aircrafts or aircrafts used in commercial aviation activities, cf. Norwegian VAT Act Section 7-4.  

There is no Norwegian stamp- or documentary taxes payable on aircraft transaction documents.

Registration of ownership or leasing interest in the Norwegian Civil Aviation Registry is subject to fees varying from NOK 3,420 to NOK 15,190 depending on size and type of aircraft, cf. Regulations on fees to the Civil Aviation Authorities Section 12. In addition, fees will apply to registration of mortgages, varying between NOK 2,900 and NOK 17,700 depending on amount of debt secured thereby, cf. Regulations on fees to the Civil Aviation Authorities Section 13. 

 In addition, we mention that fees may apply in connection with the following main (non-exhaustive) regulatory requirements: 

As a starting point, no luxury taxes will be payable.

For tax and VAT considerations, distinctions have to be made between financial and operational leasing. The tax consequences will depend on what type of leasing we are facing. For instance, the Norwegian VAT Act section 3-6 b) explicitly names financial leasing as not being exempted from VAT, while operational leasing may be exempted (zero-rated) pursuant to the VAT Act Section 6-10.  

These are, however, complex questions that must be considered on a case by case basis. 

See items 1, 5 and 8 above. 

The VAT Act Section 6-10 states that supply and hiring out of aircrafts for commercial aviation activities shall be VAT exempt (zero-rated). The same exemption applies for supply of services that are directly connected to the building, alteration, repair or maintenance of aircraft used for commercial aviation. Furthermore, the supply of specific goods and services for use by aircraft in commercial aviation activities shall be exempt (zero-rated). The exemption only applies for aircrafts engaged solely in international aviation.  

None of the exemptions listed above in items 5 and 10 will apply for the operation and use of corporate and/or private aircraft. As a starting point, the main rule will apply, and there will be, among other things, an obligation to calculate output VAT on all sales of goods and services.   

According to domestic tax law the threshold for becoming subject to corporate tax is rather low. The starting point is that any foreign enterprise will become subject to Norwegian corporate tax if it conducts business activities within Norway or if it hires out employees to work in Norway. 

However, Norway has tax treaties with about 90 countries, which may provide exemption from Norwegian tax liability. An assessment of tax liability must therefore be made specifically for each foreign enterprise and based on the relevant tax treaty. 

The basic rule in the tax treaty is that a foreign enterprise becomes subject to tax if it has a so called “permanent establishment” or “PE” in Norway. 

No taxes will be payable on aircraft loan repayments. Repayment of loans is not considered taxable income for the recipient.

About 80 % of greenhouse gas emissions in Norway are taxed and/or regulated through the emissions trading system (Norway takes part in the EU ETS). These apply mainly to emissions from the use of fossil energy sources. 

The general tax level on greenhouse gas emissions is NOK 500 per tonne CO2. A CO2 tax of NOK 1,30 per litre of mineral oil used by aircraft on domestic flights will be charged, as well as a sulphur tax of NOK 0,133 per litre of mineral oil. None of the Norwegian taxes mentioned are payable on fuel for international flights. Furthermore, a NOx tax is due for emissions from the aircraft’s propulsion machinery when the total installed power is more than 750 kilowatts. In 2019, this tax will be NOK 22,27 per kilogram of nitrogen oxides emitted. Tax exemptions are granted for aircraft’s operating in direct traffic between Norwegian and foreign airports.  

Avinor is the Norwegian national air navigation services and operates 44 airports in Norway. Airlines that uses Avinor airports are required to pay different levies. According to the regulation relating to charges at Avinor AS’s airports, the following charges shall apply:  

Take-off charge: NOK 62 

Passenger charge: NOK 48 

Passenger transfer abroad: NOK 34 

Security charge: NOK 60 

More information can be found here: https://avinor.no/en/aviation/route-development/charges/ 

There is also a tax on the transport by air of passengers from Norwegian airports. There are two rates depending on the final destination: a low rate for journeys with a final destination in Europe, and a high rate for journeys to other final destinations: 

Low rate: NOK 75 per passenger 

High rate: NOK 200 per passenger 

In addition to the CO2 tax mentioned in Section 13 above, there is a charge on importation and domestic production of gasoline. The current gasoline charge is between NOK 5,25 and 5,29 per litre. However, exemptions or subsidies are paid for gasoline tax used in aircrafts.  Furthermore, the supply of specific goods, e.g. gasoline, for use by aircraft in international commercial aviation activities shall be VAT-exempt (zero-rated).  

We have included information on the most relevant taxes, duties, VAT and other fees/charges in our answers above. However, other taxes, duties, VAT and other fees/charges, whether general or aircraft specific, may also apply to your business or transaction and the above information is not intended to be  an exhaustive list of taxes applicable in Norway.