Norway International Update Q2 2025
This update highlights key legal developments and market trends from the second quarter of 2025 across sectors of strategic importance in Norway, including Financial Regulatory, Tax and Duties, Renewable Energy, ESG and Compliance. We also bring you select business updates from Wiersholm, relevant for both our international and domestic clients.
Some highlights include:
Financial Regulatory: The Norwegian Ministry of Finance has proposed implementing the IFD and IFR regulatory frameworks, introducing rules on investment firms’ capital and liquidity requirements, governance, remuneration, reporting and supervision. From 1 July 2025, the Norwegian Acts implementing MiCA and DORA will enter into force, aligning Norway with EU rules on crypto-asset services and digital operational resilience in the financial sector. A proposal for implementing ELTIF 2 has also been published, aiming to make long-term investment funds more attractive through greater flexibility, broader asset eligibility, and improved retail access. Finally, the Securitization Regulation, including provisions on synthetic securitization and reduced capital requirements, will apply in Norway from 1 August 2025, with the goal of increasing financial system efficiency and investment opportunities.
Tax and Duties: Recent developments in Norwegian tax law highlight three key areas. First, the government is considering short-term adjustments to the Norwegian CFC (NOKUS) rules in light of Pillar 2 implementation, particularly simplifying rules for large multinational groups already subject to the Supplementary Tax Act and reassessing exemptions for entities in tax treaty jurisdictions. Second, the Norwegian Tax Appeals Board has ruled that a Norwegian parent company cannot deduct expenses incurred and invoiced to its foreign subsidiary, even if the costs benefit the group, reaffirming the principle that only formally incurred expenses are deductible. Third, the Oslo District Court upheld a VAT assessment against Hurtigruten for international cruises with Norwegian stops, rejecting the company’s reliance on longstanding administrative practice and emphasizing that such practice must be grounded in law to have legal effect. The decision has been appealed.
Renewable Energy: Norway’s Ministry of Energy relaunched the Utsira Nord floating offshore wind tender in May 2025 after EFTA approved the state aid model. The tender includes stricter qualification requirements covering financial strength, experience, sustainability, and project planning. The selection process uses updated qualitative criteria emphasizing project cost, execution capability, and sustainability. Only one project will receive state aid through a closed-bid auction capped at NOK 35 billion, with the winner responsible for full electricity price risk and subject to a NOK 2 billion penalty if the project is not completed. Applications close 15 September 2025, with final awards planned for early 2026.
We hope you find these updates useful and informative. If you have any comments or wish to receive further information on any topic in this update, please feel free to get in touch with one of the displayed contacts.
Financial Regulatory
Key contacts: Kjersti T. Trøbråten and Stian A. Endre
In the second quarter of 2025, among other things, the long-awaited proposal for the implementation of the Investments Firms Directive and Investments Firm Regulation («IFD» and «IFR») into Norwegian law was published. In addition, the regulation on Markets in Crypto-Assets («MiCA») and the Digital Operational Resilience Act («DORA») entered into force on July 1.
In the following section, we will give you the latest updates in Norwegian financial regulation.
Proposal for the implementation of IFD and IFR
The IFD (Directive (EU) 2019/2033) and IFR (Regulation (EU) 2019/2033) entered into force in the EU in 2019 and was applicable from 2021. The Norwegian Ministry of Finance has now published its proposal for implementing the IFR and IFD into Norwegian law. Among other things, the proposal includes rules on investment firms’ capital and liquidity requirements, corporate governance, remuneration, reporting, and supervisory activities. Read our newsletter, available here (Norwegian only), for more information.
Entry into force of MiCA and DORA
The Norwegian Act on Crypto-Assets (implementing Regulation (EU) 2023/1114 (“MiCA”)) enters into force on 1 July. Following entry into force, crypto-asset service providers established in the EU may offer crypto-asset services on a cross-border basis into Norway provided a notification is sent to the competent authority in their home member state in accordance with MiCA requirements.
From the same date, the Norwegian Act on Digital Operational Resilience in the Financial Sector (Implementing Regulation (EU) 2022/2554 (“DORA”)) will enter into force. When the rules enter into force, Norway’s financial sector will have the same requirements for digital operational resilience as the EU.
Proposal for the implementation of ELTIF 2
The Regulation on European long-term investment funds («ELTIF»), with an aim of allowing more retail participation in long-term investments in the EU, has been in force in Norway since 1 January 2023. A proposal for the amendments in Regulation (EU) 2023/606 («ELTIF 2») has now been published by the Norwegian Ministry of Finance. The changes encompassed by ELTIF 2 are aimed at making ELTIFs more attractive to investors and include amendments such as lower thresholds for and an expanded pool of eligible assets, increases in the leverage limits, flexibility in fund structuring and improved retail access.
Entry into force of the Securitization Regulation
Regulation (EU) 2017/2402 (the «Securitization Regulation»), along with the extension to synthetic securitization in Regulation 2021/557 and amendments to the capital requirements regulation to introduce lower capital requirements for securitizations, will come into force in Norway on 1 August 2025. One of the main objectives of the Securitization Regulation is to improve efficiencies in the financial system and offer additional investment opportunities.
Tax and Duties
Key contacts: Nicolay Vold and Stefan Eilertsen
In the second quarter of 2025, among other things, significant developments have emerged in Norwegian tax law, particularly concerning the Norwegian Controlled Foreign Company (CFC) rules, known as NOKUS, and their alignment with international tax initiatives such as the OECD’s Pillar 2 framework. The NOKUS rules tax Norwegian owners on profits earned by foreign subsidiaries in low-tax jurisdictions, regardless of whether those profits are distributed. In response to global efforts to curb profit shifting and base erosion, the Norwegian government has announced a review of the NOKUS rules, focusing on potential short-term adjustments and better coordination with the Supplementary Tax rules already implemented.
Additionally, recent guidance from the Norwegian Tax Appeals Board has clarified the conditions under which costs incurred by foreign subsidiaries but paid by Norwegian parent companies may be deductible for Norwegian tax purposes, stressing the importance of formal liability and contractual arrangements within multinational groups.
Finally, this overview addresses a recent Oslo District Court ruling concerning the application of Value Added Tax (VAT) on international cruise journeys that include multiple stops along the Norwegian coast, a decision with notable implications for the cruise industry and ongoing legal discourse.
In the following section, we will give you the latest updates.
1. Recent developments re the Norwegian CFC Rules (NOKUS) in relation to Pillar 2
Introduction
The Norwegian CFC rules (Nw. NOKUS) require that Norwegian owners are taxed on their shares of profits from companies under Norwegian control in low-tax jurisdictions, regardless of whether those profits are distributed.
A government report from September 2024 announced a need to review the NOKUS rules in light of international developments, including the global two-pillar solution for the taxation of large multinational groups. This solution aims to prevent profit shifting and tax base erosion. Pillar 2 is already implemented in Norwegian law the Supplementary Tax law, but work is ongoing, while negotiations on Pillar 1 continue.
Pending the finalization of these international rules, the ministry finds that it is not practical to conduct a comprehensive review of the NOKUS rules, but it will consider certain short-term adjustments in two specific areas.
Coordination of NOKUS and Supplementary Tax Rules
The ministry will assess simplifications for companies subject to both the NOKUS and the Supplementary Tax rules, the latter apply to groups with income over EUR 750 million. One suggested solution is to exempt such groups from NOKUS taxation, as both sets of rules aim to prevent tax avoidance through low-tax jurisdictions and have similar effects. Applying both regimes in parallel creates unnecessary complexity. The ministry will review whether changes or exemptions are warranted, but has no specified details.
Finally, it should be noted that the recent agreement between the G7 and the United States to make exceptions for US entities in relation to the application of Pillar 2 could have implications also in relation to the Norwegian Supplementary Tax rules and the NOKUS rules.
Changes to NOKUS exemption for Treaty Jurisdictions
Norwegian tax law currently exempts companies resident in tax treaty countries from NOKUS taxation if their income is not mainly passive (e.g., interest, dividends, royalties). The ministry is considering whether to expand or restrict this exemption.
This exemption relates to Article 7 of Norway’s tax treaties, which generally allows Norway to tax foreign companies only if they have a permanent establishment in Norway. Since the NOKUS regime effectively allows Norway to tax foreign companies’ profits without such a link, there may be grounds to widen the exemption to also cover companies with passive income. This would remove the need to determine if the company’s income is “mainly” passive, an assessment that can be complex. The ministry’s specific proposals remain to be seen.
2. Deductibility of costs incurred by foreign subsidiaries covered by a Norwegian parent – recent guidance from the Norwegian Tax Appeals Board
The Norwegian Tax Appeals Board (Nw. Skatteklagenemnda) recently issued a notable decision concerning the tax deductibility of expenses in cross-border group structures, specifically in cases where a Norwegian parent company covers costs that are contractually and formally incurred by its foreign subsidiary.
Case Overview:
In the case, a Norwegian parent company had assumed various costs that were, under contract, incurred by its foreign subsidiary. The expenses related to business activities benefiting the group as a whole, such as group management services, strategic consultancy, or software licenses. Nevertheless, the invoices for these services were addressed directly to the foreign subsidiary, making the subsidiary formally liable for payment. Despite this, the Norwegian parent company covered the costs and sought to deduct them from its Norwegian taxable income, arguing the expenses supported the entire group’s operations, including its own.
Tax Appeals Board Ruling:
The Board held that the right to deduct business expenses in Norway generally depends on who is formally liable for the expense. In this case, since the invoices were directed to (and thus expenses legally incurred by) the foreign subsidiary, the costs could not be deducted by the Norwegian parent—even if the parent ultimately paid the invoices and even if the expenditure had some relevance for the Norwegian company’s business.
The Board’s decision emphasized that this principle ensures clarity and prevents double deduction of the same expense across different tax jurisdictions. Norwegian tax rules only grant a deduction where the expense is directly linked to the Norwegian company’s own business activity and where the Norwegian company is the formal debtor. Departing from this main rule requires clear contractual links showing that the expense was incurred for the Norwegian entity’s own commercial purposes. Mere group benefit or a general economic rationale is not sufficient.
Implications for International Groups:
This decision provides important guidance for international corporate groups operating in or with Norway. It highlights that:
- The starting point is that only costs for which a Norwegian entity is contractually and formally liable can be deducted for Norwegian tax purposes.
- Norwegian companies should ensure that group shared costs are appropriately allocated and, where they wish to claim a deduction, invoices should be addressed directly to the Norwegian entity.
- Internal group arrangements and cost-sharing agreements require careful drafting to ensure compliance with Norwegian tax law.
- Failure to properly allocate costs and invoices within the group may lead to the loss of deductions, with potential double taxation or denied tax relief.
3. New Ruling from Oslo District Court re. Value Added Tax on International Cruises
The case concerns the question of whether cruise journeys departing from abroad, with multiple stops along the Norwegian coast before returning to the place of departure, should be regarded as trips exempt from Norwegian value added tax (VAT).
When VAT on passenger transport services was introduced in 2004, an exemption was provided for journeys directly to and from abroad. The regulation introduced a limitation on the exemption for round trips within the country lasting more than 24 hours. Prior to the regulation’s entry into force, HSH asked the Ministry of Finance whether a trip as described above would be subject to VAT, to which the Ministry replied: “The Ministry of Finance does not consider cruise ships passing through the Norwegian VAT area to be conducting taxable passenger transport activities in Norway.”
Hurtigruten considered cruises departing from England and Germany, with several stops along the Norwegian coast before returning to the place of departure, to be covered by the exemption, based on the practice established by the 2004 statement. In 2022, the Ministry of Finance elaborated on the criteria from the 2004 statement, introducing a majority assessment (more than 50% of the journey in Norway) to determine whether the journeys would become taxable in Norway. On this basis, the company was assessed for VAT on the 2022 journeys, for the portion that took place within Norwegian territory, totaling NOK 37 million.
The company brought legal action, arguing that the 2004 statement had established a general exemption rule for cruise traffic, which had been practiced and communicated since its adoption. The District Court found that an exception from the round-trip rule had been practiced for cruise traffic, but that this practice was contrary to the wording of the law. While the practice fulfilled the criteria of being consistent, sufficiently long-standing, and anchored with authorities, the court held that the rule was not supported by the wording, preparatory works, or other legal sources, and therefore did not have the quality required for establishing a legal norm at the level of law. The decision was upheld, and Hurtigruten was ordered to pay the state’s legal costs.
Wiersholm litigated the case on behalf of Hurtigruten. The ruling has been appealed.
Renewable Energy
Key contacts: Frode Støle, Inge Ekker Bartnes, Svanhild Vesterheim and Jon Rabben
In the second quarter of 2025, among other things, Norway took a significant step forward in its renewable energy efforts by launching a new tender for floating offshore wind projects at Utsira Nord. Following approval from the EFTA Surveillance Authority, the Ministry of Energy introduced updated qualification requirements and evaluation criteria to ensure sustainable and cost-effective development. This tender is a key part of Norway’s strategy to expand its offshore wind capacity towards 2034 and beyond.
In the following section, we will give you the latest updates.
Norway launches new tender for floating offshore wind at Utsira Nord
In April 2025, the EFTA Surveillance Authority (ESA) formally approved the state aid model for floating offshore wind projects at Utsira Nord—a crucial prerequisite for proceeding with the tender process. Following this approval, the Ministry of Energy announced on 19 May 2025 the launch of a new tender for three project areas at Utsira Nord, each with an allowed installed capacity of up to 500 MW. The application deadline has been set for 15 September 2025.
This marks a renewed call for applications after the original 2023 competition was postponed pending clarification on state aid. The updated tender documents introduce new qualification requirements, revised qualitative criteria, and adjustments to the weighting of these criteria.
Qualification and evaluation
Applicants must first meet a number of qualification requirements, including criteria related to revenue, credit rating, financing plan, relevant experience, project planning, health, safety and environment, integrity, carbon footprint, and use of recyclable materials. These are assessed on a pass/fail basis, and applicants who do not meet the requirements will be excluded.
Qualified applicants will enter a two-stage allocation process, separated by a project maturation (development) phase. In the first stage, project areas will be awarded to applicants who achieve the highest scores based on a set of qualitative criteria. These criteria—and their respective weightings—are as follows: cost level, realism, and maturity (35%); execution capability (35%); innovation and technology development (10%); sustainability (10%); and positive ripple effects (10%). The highest-ranked applicant chooses first, followed by the second and third highest-ranked applicants.
The criteria largely reflect those used in the 2023 process, although some have been broadened or reweighted. Notably, «cost level 2030» has been replaced by a wider cost and maturity criterion, reflecting a new timeline where the aim is commissioning in 2034. Additionally, the «positive ripple effects» criterion no longer focuses exclusively on local effects, addressing EEA law objections raised in the previous round. Weighting has shifted, with increased emphasis on project cost and execution capability, while innovation is now given less priority.
State aid and contract structure
Following the development phase, a state aid competition will be held in the form of a closed-bid auction, with each bidder submitting a single final offer. The winner will be the bidder offering the lowest level of support needed per MW, within an upper cap of NOK 35 billion (subject to inflation adjustment). Only one project will receive state aid and must aim for 500 MW capacity. Unsuccessful applicants may apply to extend their exclusive rights to their project areas. The successful bidder will sign an investment support agreement with the government, representing a shift from the two-sided Contract for Difference (CfD) model used in the first Norwegian offshore wind project, Sørlige Nordsjø II.
The new investment support agreement provides for disbursement as a single payment upon completion of the facility, rather than ongoing payments over the operating period. This places all electricity price risk on the developer. However, if electricity prices far exceed expectations (defined as 25% above NVE’s high-price estimate for the year), a profit-sharing mechanism with the state is triggered to avoid overcompensation.
The winner commits to completing the project, with a non-completion penalty of NOK 2 billion, mirroring the structure in Sørlige Nordsjø II. While the support model is new, many other terms mirror those found in the previous CfD contract. Interested parties and joint ventures are now invited to submit their applications by no later than 12:00 CET on 15 September 2025. The award of project areas is tentatively scheduled for the first half of 2026.
Business Updates from Wiersholm
In the following section, we will give you the latest business updates from Wiersholm, including information about some of our upcoming events.
Wiersholm ranks among the top law firms in Norway by volume of transactional mandates
As of 2025, Wiersholm ranks as the third largest firm in Norway in terms of transaction mandates, and our market insights are frequently sought by industry stakeholders. The analytics firm Mergermarket reports a 16 percent increase in the number of transaction mandates among the five largest Norwegian law firms compared to the same period last year. This growth underscores Wiersholm’s sustained leadership and expertise in handling complex, high-value transactions across multiple sectors. Our dedicated team of specialists continues to deliver tailored legal solutions that drive successful outcomes for clients navigating an increasingly dynamic and competitive market landscape. Moreover, our commitment to innovation and strategic advisory positions us as a trusted partner in shaping Norway’s transactional legal environment.
Save the Date – Upcoming Events
Welcome to Nordic Buy Out Forum 2025
Every year, Wiersholm organises the Nordic region’s largest annual M&A conference, the Nordic Buy Out Forum. The conference is a recognised arena for networking and knowledge sharing for the venture capital and private equity industry and others involved in the transaction market in Norway and the Nordic region.
This year, the conference will be held on Thursday, 4 December 2025.
Wiersholm initiates and organises Nordic Buy Out Forum with support from the Norwegian Venture Capital & Private Equity Association (NVCA). The conference is a recognised arena for networking and knowledge sharing for the venture capital and private equity industry and others involved in the transaction market in Norway and the other Nordic countries.
Since the first conference was organised in 2011, the number of participants has increased every year. We are now proud to say that the conference attracts the most important players in the industry.
For more information and register here
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