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The Office of the Auditor General’s investigation of the Norwegian Tax Administrations’ control of the pricing of transactions in commonality of interest across national borders

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​Background and objectives of the investigation

Increased global trade and growing numbers of multinational companies have actualised the challenge of surplus moving out of Norway as company-internal transactions. The Storting’s Finance Committee has shown that this often happens in the form of debt displacement and tax-motivated pricing of internal transactions, and that it is important to maintain a good balance between Norway’s desire to appear competitive for foreign investments, and the need to protect Norway’s tax base.

The goal of the investigation was to evaluate the results of the Norwegian Tax Administrations’ control of the pricing of such transactions. In connection with this, it was investigated how and to what extent the Tax Administration uses available means.


The Tax Administration’s control of internal pricing leads to significant revenue corrections

  • The Administration’s controls from 2009–2016 resulted in approximately NOK 79 billion in revenue corrections for the companies, or about NOK 10 billion a year on average.
  • In many cases, decisions regarding revenue increases don’t necessarily mean increased tax revenue now, but in the longer term.

The Tax Administration carries out few controls of internal pricing

  • In the period 2009–2016, the proportion of controls started in relation to the number of companies with at least one group-internal transaction varied between 2.2 per cent (110 cases) in 2012 and 0.6 per cent (30 cases) in 2015.
  • Despite increased resource allocation, the number of new cases per year was at the same level in 2016 as in 2009.

The execution time for internal pricing cases is long and the deadlines are somewhat unclear

  • The average processing time from the start of the control to a decision is two years. In 13 of 32 completed cases, it was over 1,000 days.
  • In some cases, the Tax Administration is reticent both in setting deadlines and in following up when deadlines are not met.

Little use is made of the possible sanctions. Coercive fines are considered to be of little relevance in internal pricing cases

  • From 2009–2016, the Tax Administration imposed additional taxes in 16 of 304 cases.
  • From 2017, coercive fines of a maximum of approximately NOK 50,000 can be imposed when mandatory information is not provided within the set deadline. The Directorate of Taxes considers this amount to be low and of little relevance in this type of case. The Ministry of Finance states that it is too early to conclude that coercive fines are of little relevance.

The Ministry of Finance has not secured any information regarding the tax-related effects of the internal pricing controls

  • The Ministry has postponed an evaluation of the task and documentation regulations pending a standard which existed in 2015. The Ministry of Finance states that it will consider carrying out an evaluation.
  • The Directorate of Taxes’ reporting did not include the tax-related effect of internal pricing corrections, nor did the Ministry secure such information through evaluations or analyses.


The Office of the Auditor General recommends that the Ministry of Finance:

  • Evaluate whether the scope of internal pricing control is sufficient given the necessary priority
  • Contribute to the completion of a national system for improved risk management and sampling of internal pricing cases for control
  • Evaluate whether the available sanctions in internal pricing cases are sufficient
  • Contribute to clarifying what companies’ duties entail with regard to supplying necessary documentation about internal pricing before the statutory deadline
  • Ensure that it has an adequate overview of the final tax effects of the controls on the tax base

Riksrevisjonen, Storgata 16, P.O. Box 6835 St. Olavs plass, 0130 Oslo, Norway

Phone: +47 22 24 10 00 974 760 843