Norway
This report analyses the implementation of the AEOI Standard in Norway with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall findings
AEOI legal framework
Norway’s legal framework implementing the AEOI Standard is in place and is consistent with the requirements of the AEOI Terms of Reference. This includes Norway’s domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) and its international legal framework to exchange the information with all of Norway’s Interested Appropriate Partners (CR2).
Effectiveness of AEOI in practice
Norway’s implementation of the AEOI Standard is on track with respect to the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice. This includes ensuring Reporting Financial Institutions correctly conduct the due diligence and reporting procedures (CR1) and exchanging the information in an effective and timely manner (CR2). Norway is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
Overall rating in relation to the effectiveness in practice: On Track
General context
Norway commenced exchanges under the AEOI Standard in 2017.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Norway:
enacted the Tax Administration Act of 27 May 2016 no. 14 (skatteforvaltningsloven);
introduced the Tax Administration Regulation of 23 November 2016 no. 1360 (skatteforvaltningsforskriften);
made reference to the Act relating to Measures to Combat Money Laundering and Terrorist Financing implementing the FATF Recommendations for the purposes of the identification of Controlling Persons under the AEOI Standard.
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2016. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High Value Individual Accounts by 31 December 2016 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2017.
With respect to the exchange of information under the AEOI Standard, Norway:
is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2017; and
put in place two bilateral agreements.1
Table 1 sets out the number of Financial Institutions in Norway that reported information on Financial Accounts in 2021 as defined in the AEOI Standard (essentially because they maintained Financial Accounts for Account Holders, or that were related to Controlling Persons, resident in a Reportable Jurisdiction). It also sets out the number of Financial Accounts that they reported in 2021. In this regard, it should be noted that Norway requires the reporting of Financial Accounts held by all non-residents and some accounts may be required to be reported more than once (e.g. jointly held accounts or accounts with multiple related Controlling Persons), which is reflected in the figures below. These figures provide key contextual information to the development and implementation of Norway’s administrative compliance strategy, which is analysed in the subsequent sections of this report.
Table 2 sets out the number of exchange partners to which information was successfully sent by Norway in the past few years (including where the necessary frameworks were in place, containing an obligation on Reporting Financial Institutions to report information, but no relevant Reportable Accounts were identified). These figures provide key contextual information in relation to Norway’s exchanges in practice, which is also analysed in subsequent sections of this report.
In order to provide for the effective implementation of the AEOI Standard, in Norway:
the Norwegian Tax Administration (NTA, the tax authority) has the responsibility to ensure the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions and for exchanging the information with Norway’s exchange partners;
technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place by the NTA and all the data is reported through the national transmission system, resulting in a close integration between reporting under the AEOI Standard and Norway’s domestic reporting requirements; and
the Common Transmission System (CTS) and is used for the exchange of the information, along with the associated file preparation and encryption requirements.
It should be noted that the review of Norway’s legal frameworks implementing the AEOI Standard concluded with the determination that Norway’s domestic and international legal frameworks are In Place. This has been taken into account when reviewing the effectiveness of Norway’s implementation of the AEOI Standard in practice.
Findings and conclusions on the legal frameworks
The detailed findings and conclusions on the AEOI legal frameworks for Norway are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Norway’s domestic legislative framework is in place and contains all of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (SRs 1.1 – 1.3). It also provides for a framework to enforce the requirements (SR 1.4).
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Norway has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Norway has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in accordance with the CRS and its Commentary.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Norway has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Norway has a legislative framework in place to enforce the requirements in accordance with the CRS and its Commentary.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Norway’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Norway’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Norway and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3)
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Norway has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Norway put in place its exchange agreements without undue delay.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Norway’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Findings and conclusions in relation to effectiveness in practice
The detailed findings and conclusions in relation to effectiveness in practice of AEOI for Norway are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Effectiveness in practice: Jurisdictions should ensure that in practice Reporting Financial Institutions correctly implement the due diligence and reporting procedures, which includes a requirement for jurisdictions to have in place an administrative framework to ensure the effective implementation of the CRS.
Norway’s implementation of the AEOI Standard is on track with respect to ensuring that Reporting Financial Institutions are correctly conducting the due diligence and reporting procedures and are therefore reporting complete and accurate information. This includes ensuring effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures (SR 1.5), and collaborating with exchange partners to ensure effectiveness (SR 1.6). Norway is encouraged to continue its implementation process to ensure its ongoing effectiveness.
SR 1.5 Jurisdictions should ensure that in practice Reporting Financial Institutions identify the Financial Accounts they maintain, identify the Reportable Accounts among those Financial Accounts, as well as their Account Holders, and where relevant Controlling Persons, by correctly conducting the due diligence procedures and collect and report the required information with respect to each Reportable Account. This includes having in place:
an effective administrative compliance framework to ensure the effective implementation of, and compliance with, the CRS. This framework should:
be based on a strategy that facilitates compliance by Reporting Financial Institutions and which is informed by a risk assessment in respect of the effective implementation of the CRS that takes into account relevant information sources (including third party sources);
include procedures to ensure that Financial Institutions correctly apply the definitions of Reporting Financial Institutions and Non-Reporting Financial Institutions;
include procedures to periodically verify Reporting Financial Institutions’ compliance, conducted by authorities that have adequate powers with respect to the reviewed Reporting Financial Institutions, with procedures to access the records they maintain; and
effective procedures to ensure that Financial Institutions, persons or intermediaries do not circumvent the due diligence and reporting procedures;
effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions;
strong measures to ensure that valid self-certifications are always obtained for New Accounts;
effective procedures to ensure that each, or each type of, jurisdiction-specific Non-Reporting Financial Institution and Excluded Account continue to present a low risk of being used to evade tax; and
effective procedures to follow up with a Reporting Financial Institution when undocumented accounts are reported in order to establish the reasons why such information is being reported.
In order to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, Norway implemented all of the requirements in accordance with expectations. The key findings were as follows:
Norway implemented an overarching strategy to ensure compliance with the AEOI Standard developed after conducting a risk assessment that took into account a range of relevant information sources, such as compliance with other domestic reporting requirements and the reports submitted by Financial Institutions under the AEOI Standard and the error messages received from its exchange partners as well as publicly available information. Norway’s compliance strategy facilitates compliance and incorporates a credible approach to enforcement. Norway intends to keep its compliance strategy and risk assessment under review to ensure its effectiveness on an ongoing basis.
Norway has worked effectively to understand its population of Financial Institutions, utilising various relevant information sources, such as other registers of entities, information from industry associations and industrial codes, which is cross-checked against the list of regulated entities maintained by Norway’s financial regulators, the Foreign Financial Institution list for FATCA purposes and the list of financial institutions reporting financial information for domestic purposes. Norway has taken action to ensure that Reporting Financial Institutions are classifying themselves correctly under Norwegian domestic rules and are reporting as required. Norway intends to continue to keep its understanding of its Financial Institution population up to date on a routine basis.
The institution responsible for implementing Norway’s compliance strategy appears to have the necessary powers and resources to discharge its function. With respect to resourcing, Norway has allocated the equivalent of 25 staff to monitor and ensure compliance by financial institutions, including with respect to their domestic reporting requirements, which have access to IT systems and tools to conduct risk assessments. Overall, they appear to have effectively implemented an operational plan to verify compliance with the requirements, incorporating appropriate compliance activities.
It appears that Norway effectively enforces the requirements, including through the inspection of records of Reporting Financial Institutions. Norway has not yet identified a need to apply any sanctions or penalties on Financial Institutions which have been found to have reported incorrect information. Instead, Norway has engaged with the Financial Institutions to ensure they implement the right procedures or correct other errors identified and amend the data sent.
Norway is ready to take effective action to address circumvention of the requirements if such circumvention is detected. It is also noted that Norway has formal procedures in place to ensure that self-certifications are obtained as required and to follow up on undocumented accounts.
Norway will also keep its jurisdiction-specific lists of Non-Reporting Financial Institutions and Excluded Accounts under review to ensure they continue to pose a low risk of being used for tax evasion purposes.
Table 3 provides a summary of the specific activities undertaken, or that are planned to be undertaken, in relation to each of the key parts of the framework described above.
In terms of the Financial Account information collected and sent by Norway, it was found to include a high proportion of Tax Identification Numbers with respect to individual Account Holders when compared to most other jurisdictions. Statistical data on TINs reported for Controlling Persons is not readily available in Norway, but it could be extracted if needed. The level of undocumented accounts appears to be in line with most jurisdictions.
Norway monitors whether Financial Accounts that are reported include information on the dates of birth with respect to the individuals associated with them, validates the dates of birth and follows up with the Reporting Financial Institutions as necessary.
More generally, many of the exchange partners that received a significant number of records from Norway indicated that they achieved a success rate when matching the information received from Norway with their taxpayer database that was broadly equivalent to, or better than, what they usually achieve.
Based on these findings it was concluded that Norway is fully meeting expectations in ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, including by having in place the required administrative compliance framework and related procedures. Norway is therefore encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 1.6 Jurisdictions should collaborate on compliance and enforcement. This requires jurisdictions to:
use all appropriate measures available under the jurisdiction’s domestic law to address errors or non-compliance notified to the jurisdiction by an exchange partner; and
have in place effective procedures to notify an exchange partner of errors that may have led to incomplete or incorrect information reporting or non-compliance with the due diligence or reporting procedures by a Reporting Financial Institution in the jurisdiction of the exchange partner.
In order to collaborate on compliance and enforcement, it appears that Norway implemented all of the requirements in relation to issues notified to them (i.e. under Section 4 of the MCAA or equivalent) in accordance with expectations. While no such notifications have yet been received, Norway has the necessary systems and procedures to process them as required. It appears that Norway also notifies its partners effectively of errors or suspected non-compliance it identifies when utilising the information received.
Based on these findings it was concluded that Norway is fully meeting expectations in relation to collaborating with its exchange partners to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures. Norway is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
CR2 Effectiveness in practice: Jurisdictions should exchange the information effectively in practice, in a timely manner, including by sorting, preparing, validating and transmitting it in accordance with the AEOI Standard.
Norway’s implementation of the AEOI Standard is on track with respect to exchanging the information effectively in practice, including in relation to sorting, preparing and validating the information (SR 2.4), correctly transmitting the information in a timely manner (SRs 2.5 – 2.8) and providing corrections, amendments or additions to the information (SR 2.9). Norway is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.4 Jurisdictions should sort, prepare and validate the information in accordance with the CRS XML Schema and the associated requirements in the CRS XML Schema User Guide and the File Error and Correction-related validations in the Status Message User Guide (i.e. the 50000 and 80000 range).
Feedback from Norway’s exchange partners did not raise any specific concerns with respect to their ability to process the information received from Norway and therefore with respect to Norway’s implementation of these requirements. More generally, three (or 4 %) of Norway’s exchange partners reported rejecting more than 25% of the files received, due to the technical requirements not being met, although none reported rejecting more than 50%. This is broadly in line with the general experience of other jurisdictions. It was noted that Norway has already successfully addressed all of the issues.
Based on these findings it was concluded that Norway is fully meeting expectations in relation to sorting, preparing and validating the information. Norway is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.5 Jurisdictions should agree and use, with each exchange partner, transmission methods that meet appropriate minimum standards to ensure the confidentiality and integrity of the data throughout the transmission, including its encryption to a minimum secure standard.
In order to put in place an agreed transmission method that meets appropriate minimum standards in confidentiality, integrity of the data and encryption for use with each of its exchange partners, Norway linked to the CTS.
Based on these findings it was concluded that Norway is fully meeting expectations in relation to agreeing and using appropriate transmission methods with each of its partners. Norway is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.6 Jurisdictions should carry out all exchanges annually within nine months of the end of the calendar year to which the information relates.
Feedback from Norway’s exchange partners did not raise any concerns with respect to timeliness of the exchanges by Norway and therefore with respect to Norway’s implementation of this requirement.
Based on these findings it was concluded that Norway is fully meeting expectations in relation to exchanging the information in a timely manner. Norway is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.7 Jurisdictions should send the information in accordance with the agreed transmission methods and encryption standards.
Feedback from Norway’s exchange partners did not raise any concerns with respect to Norway’s use of the agreed transmission methods and therefore with Norway’s implementation of this requirement.
Based on these findings it was concluded that Norway is fully meeting expectations in relation to sending the information in accordance with the agreed transmission methods and encryption standards. Norway is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.8 Jurisdictions should have the systems in place to receive information and, once it has been received, should send a status message to the sending jurisdictions in accordance with the CRS Status Message XML Schema and the related User Guide.
Feedback from Norway’s exchange partners did not raise any concerns with respect to Norway’s receipt of the information and therefore with Norway’s implementation of these requirements.
Based on these findings it was concluded that Norway is fully meeting expectations in relation to the receipt of the information. Norway is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.9 Jurisdictions should respond to a notification from an exchange partner as referred to in Section 4 of the Model CAA (which may include Status Messages) in accordance with the timelines set out in the Commentary to Section 4 of the Model CAA. In all other cases, jurisdictions should send corrected, amended or additional information received from a Reporting Financial Institution as soon as possible after it has been received.
Norway appears ready to respond to notifications and to provide corrected, amended or additional information in a timely manner and no such concerns were raised by Norway’s exchange partners and therefore with respect to Norway’s implementation of these requirements.
Based on these findings it was concluded that Norway appears to be fully meeting expectations in relation to responding to notifications from exchange partners and the sending of corrected, amended or additional information. Norway is encouraged to continue to ensure the ongoing effectiveness of its implementation.
Note
← 1. With Singapore and Türkiye. Norway has also activated a relationship under the CRS MCAA with Türkiye.