Performing business activity in Norway

Read about main tax consequences in Norway and coherent tax indicated consequences in home country in connection with activity in Norway performed by a foreign company.

Below follows a description of main tax consequences in Norway and coherent tax indicated consequences in home country in connection with activity in Norway performed by a foreign company. The activity will be performed by foreign tax resident individuals which are employed temporarily for a Norwegian project.

Many of the rules described in the Norwegian sections  (tax treaty regulations and the EU/EEA provisions on social security membership/contribution etc),  are in its main essentials, applicable in the same way in other EU/EEA countries (with certain deviations).  The section regarding foreign tax rules (home country) are otherwise described as supplementary sections.



Employees tax resident abroad will participate in certain projects in Norway. Correct salary income taxation then has to be based on Norwegian domestic legislation and the current tax treaty between Norway and the relevant home country, together with the home country’s domestic tax legislation.


According to Norwegian domestic tax legislation foreign employees are, independent of their tax residency, subject to taxation on salary income for all work performed physically in Norway.

Furthermore, an individual that performs independent services, e.g. through an one-man company or as an individual performer of services, will according to Norwegian domestic legislation be subject to corporate taxation.

If the employee in question stays in Norway more than 183 days during a twelve month period, or alternatively, 270 days during a 36 months period, the employees are considered as resident for Norwegian tax purposes. In principle this means that the employee’s tax liability include his/her worldwide income.


Even if a person is subject to tax according to Norwegian domestic legislation the final determination of tax liability has to be based on the regulations in the current tax treaty between the countries.

In case the foreign employees shall be considered as tax resident in the home country according to foreign domestic tax legislation and article 4 in the relevant tax treaty,  the foreign tax authorities must regularly (as the state of residency)  secure avoidance of double taxation, either through exemption of the Norwegian salary income or through the granting of  tax credit for the Norwegian tax on the salary income


As a starting point, Norway may according to most tax treaties between Norway and foreign countries tax salary income for work physically performed in Norway. However, if the salary:

  1. is paid (and born) by  a company resident outside of Norway, and
  2. the employees’ stay in Norway does not exceed 183 days within the income year

the salary income is exempted from tax in Norway, and thus solely subject to tax in the home country.

This result is however contingent upon the fact that the company which employs the employees is (1) not considered to constitute a permanent establishment in Norway or (2) that the employees cannot be deemed as hired out personnel.

If just one of the two last mentioned conditions is not met the employees will be subject to taxation in Norway.


2.1 Main rule

Pursuant to most tax treaties a foreign company may be subject to Norwegian corporate tax

if it meet the requirements of a so-called permanent establishment.

The tax treaty between Norway and other countries, normally article 5, defines a permanent establishment as follows:

“A fixed place of business through which the business of an enterprise is wholly or partly

carried on.”

2.2      Special on building projects etc.

However in many tax treaties, according to a special rule, a building site, construction site, installation site, and included connected control or supervision activity constitutes a permanent establishment only if it last more than 12 months or other fixed period of time; typically 6 months or 18 months.  

A site according to this rule normally exists from the date on which the contractor begins his work in Norway. Preparatory work is included and the project will be deemed to exist until the work is fully completed or permanently abandoned. Any seasonal or other temporary interruptions will be included when calculating the relevant limitation period.

As regards the use of sub-contractors, the period spent by a sub-contractor working on the building site must be considered as being spent by the general contractor. However, a foreign subcontractor itself has a permanent establishment only if his own activities last more than the relevant limitation period, normally 12 months.

As a starting point the 12-month test applies to each individual site or project. Two or several contracts will, however, be considered together, i.e. as one single unit, if it forms a coherent whole, commercially and geographically.


3.1 In general

As a starting point social security coverage under the National Insurance Scheme is compulsory for employees working in Norway. This applies regardless of their length of stay.

Both employees and employers are liable to pay social security contributions. The employees’ part is 7, 9 % (2023) of gross salary and the employer’s part is normally 14.1 %. For income exceeding NOK 750 000 an additional contribution of 5 % is added from 2023.

The social security contributions to be paid are based on the employees’ personal income. Personal income equals to all gross income related to wage labour.

3.2 Social security conventions

Norway has entered several social security treaties which involve exemptions from the standard Norwegian rules. In addition, Norway is party to the EU social security regulatory framework, i.e. Regulation 883/2004, through the EEA Treaty.

In cases where the provisions of Regulation 883/2004 differ from the provisions in the National Insurance Act, the EU regulations prevail.

For example, the Regulation 883/2004 contain provisions about employees posted abroad who generally continue to be covered by social security schemes in the country from which they were posted, when the posting does not exceed a defined period (1, 2 to 5 years). They are then exempted from membership of the national insurance scheme in the country where they work, in this case Norway.

In order to be exempted from Norwegian social security contributions, i.e. both employee’s contribution and employer’s contribution, each employee must produce a form A1 (or other certificate of coverage) issued by the foreign social security authorities. The grounds for remaining in the home country social security may also be that the individuals are working in several countries, i.e. both Norway and/or home country, at the same time.


A Norwegian company that has given an assignment to be performed on a site for construction or assembly work in Norway have, without any prior request, to submit certain information about the main contract and any contract that is performed in connection with the main contact.

In addition both the principal and the contractor are obliged to give information about subcontractors involved in the completion of the contract and the employees involved in the project.

The legislation implies that information can be given at several levels regarding the same contract. It is possible to make an agreement between the parties that the information to the tax authority should be given by one of them. Such coordination will simplify the procedure, but it should be emphasised that such agreement do not exempt any party from legal responsibilities if appropriate information is not given.

Information according to the above mentioned is to be given on certain forms, RF 1199 (contracts) and RF 1198 (employees).


1. Upon payment of salary to employees, the employer has to withhold tax and social security contribution in according to the individual employee’s tax card, or 50 er cent if the employee has not presented such card.

2. The tax withheld shall be transferred to a separate bank account named “Withholding tax”.

3. The withholding tax and employer’s social security contribution (14.1 per cent), shall be reported each month (within the 5th the following month) and paid every second month, i.e the 15th  in the following month, e.g. withholding tax regarding January and February (1. instalment) has to be paid within the 15th of  March.

4. At the end of the year (i.e. 1. February the subsequent year) the employer will have to produce a summary of income, deduction and withholding for each individual employee.

Provided that there is no tax liability in Norway according to the rules described in the chapters above an application for exemption from withholding tax may be submitted to the Norwegian tax authorities. Such exemption may also apply in respect of social security contributions.

Note that even if the salary income is exempted from taxation and  withholding tax the obligation of consecutive reporting of gross salary still always applies.


As a starting point foreign residents are normally still liable to tax for a certain time in their home country on their world wide income, even if they work temporarily abroad. This means that the individual normally still needs to provide home country tax return.

Even if a person is subject to tax according to home country domestic legislation the final determination of tax liability has to be based on the regulations in the current tax treaty between the countries, see section above.

ECOVIS is a leading global consulting firm with its origins in Continental Europe with over 9000 employees in 80 countries. In Norway, ECOVIS assists international companies with compliance and global mobility, from company registration through work permit application, legal advice, house finding, VAT returns, tax advisory, accounting to annual tax declarations.