No, not immediately — Norway taxes profits, not the investment itself, so a NOK 20 million experimental rig would be capitalised and deducted over time rather than taxed upfront, and with no revenue there would be no corporate income tax payable for that year. The 20 million becomes a fixed asset that is written off through tax depreciation, so the tax effect arrives gradually via annual deductions and potential loss carryforwards rather than as tax on the purchase amount itself.[1][2][3]
Corporate income tax is 22 percent in 2025 and is levied on taxable profit, calculated from accounting profit with tax adjustments; with no profit, no corporate income tax is due for that year. Norway applies accrual taxation for companies, meaning expenses and income are recognised when incurred/earned, not when cash moves, which is why capital expenditure is treated through depreciation rather than immediate tax.[3]
There is a duty to capitalise assets that cost at least NOK 30,000 and have a useful life of at least three years, which covers a NOK 20 million pilot rig; the asset is then depreciated for tax purposes. Typical declining-balance rates include 20 percent for machinery and equipment (group d), 14 percent for ships/vessels/rigs (group e), and 4/6/10/20 percent for buildings/installations depending on useful life (group h), and the correct group depends on whether the buoy rig is treated as equipment, a “rig,” or an installation. The annual depreciation creates tax-deductible expenses that can generate losses in early years, reducing future tax when profits arrive.[4][2][1]
Norway’s SkatteFUNN gives a 19 percent tax deduction (refundable if in loss) on approved R&D project costs, capped at NOK 25 million per year in the cost base per company, which can materially improve cash flow during long development phases. For capital items, only the depreciation allocable to the project period (or rental/usage costs) is eligible in the SkatteFUNN cost base, not the entire purchase price, and only for the proportion of capacity used by the project. Applying early and structuring the project budget to capture eligible labour, purchased R&D, and on-project depreciation is key to maximising the SkatteFUNN benefit.[5][6][7][8]
Input VAT on equipment can be deducted only once registered in the VAT Register, but pre‑registration is possible for businesses making major upfront investments so input VAT can be recovered before turnover starts. Pre‑registration generally requires documented VAT‑liable purchases of at least NOK 250,000 and more than four months until reaching the ordinary NOK 50,000 turnover threshold, after which input VAT on the rig and related costs can be reclaimed in VAT returns. If not pre‑registered, input VAT would initially be a cash cost until hitting the threshold and registering, at which point subsequent input VAT becomes deductible.[9][10]
If the project generates losses for several years due to depreciation and R&D costs without revenue, those tax losses carry forward and must be used against future profits as soon as available, effectively deferring taxation until profitability. Norwegian practice allows losses to be carried forward indefinitely, so long development horizons do not forfeit the deductions generated in the early years.[11][12][13]
- Capitalise the rig and determine the correct tax depreciation group (likely machinery/equipment at 20 percent or “rigs” at 14 percent), then begin tax depreciation to capture annual deductions.[2][1]
- Apply for SkatteFUNN early, and include on‑project labour, purchased R&D, and the project’s share of depreciation of the rig in the SkatteFUNN cost base up to NOK 25 million per year at a 19 percent rate (refundable if in loss).[6][5]
- Consider VAT pre‑registration based on the NOK 250,000 major‑purchase rule so input VAT on the rig can be reclaimed even before exceeding the NOK 50,000 turnover threshold.[10][9]
In short, the NOK 20 million is not taxed; it is capitalised and deducted over time via depreciation, with additional relief potentially available through SkatteFUNN and VAT input credits once registered.[2][6]
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