A permanent establishment for foreign companies arises when the company’s activity is carried out from a business location through which the company operates, either fully or partially. It is generally required that the business has been ongoing for a “sufficient period.” In most cases, a permanent establishment will trigger tax liability in Norway.
Examples of permanent establishments:
- Presence of local management
- Establishment of an office
- Local production / factory
- Store
- Participation in construction and/or assembly projects lasting more than 12 months
- Persons acting on behalf of the company (e.g., agents) who can enter into agreements on behalf of the company (e.g., contracts or sales)
In several bilateral tax treaties, there is often (but not always) an exemption for auxiliary activities when assessing the permanent establishment. Auxiliary activities may include premises used solely for display or storage.