The National Budget 2023Press releases
Adjusting the tax rules for the petroleum sector
Press release | No: 47/2022 | Date: 06/10/2022 | Ministry of Finance
Oil and gas prices have increased significantly since the introduction of the temporary tax rules for the petroleum sector in 2020. As a result of this, the Government will now be adjusting these rules.
The Government proposes changing the temporary tax rules for the petroleum sector. The proposal entails that the uplift rate is reduced from 17.69 per cent to 12.4 per cent.
The adjustment in the uplift rate will take effect for expenses incurred from and including 1 January 2023.
In connection with the pandemic and subsequent fall in oil prices, the Storting enacted temporary tax rules for the petroleum sector in June 2020. The current situation with very high oil and gas prices is completely different.
“Many of the investment projects covered by the rules have matured since the temporary rules were adopted. The consideration of neutral tax rules therefore needs to be weighed up against the consideration of predictability. With the Government's proposal, all profitable investments before special tax will also remain profitable after tax,“ says the Minister of Finance Trygve Slagsvold Vedum (Centre Party).
“The Government considers the proposal to represent a reasonable balance point. We acknowledge that investment decisions have been made based on the temporary rules, however we are adapting the rules to the current profitability situation, which is completely different to when the rules were introduced,“ says the Minister of Finance.
The reduction in the uplift rate is estimated to increase tax revenues by NOK 2 billion accrued in 2023. When aggregated over the years in which the temporary rules will apply, central government revenues are estimated to increase by NOK 11 billion. The extra revenues will be transferred to the Government Pension Fund and will therefore not be a component in the 2023 National Budget.