Norwegian Shipowners Depressed About New Tax Proposals

Reactions among Norwegian shipowners to the new tax reforms have ranged from outright hostility to depressed resignation. The main thrust is aimed at reducing the overall tax rate, while extending its application to areas which enjoyed complete or partial immunity. In practice, this will mean that the privileged position of K/S partners will be under threat, with significant implications for the shipping industry.

The provisions also include more restrictions on tax depreciation allowances and the repeal of most tax credit arrangements, which will broaden the tax base. Thus actual income will form the basis for the new tax regime. However, corporate tax has been reduced from 50.4% to 28%. This should help to stem the outflow of capital from Norway, and ensure that there will be no overall change in the actual tax level for the business sector.

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