Withdrawal of assets or services

Tax liability may arise for the company when an asset or service is withdrawn for internal use, transferred as a gift or distributed as a dividend.

Tax on withdrawals may be relevant in cases where the company acquires assets that are primarily used privately by the shareholder or related parties of the shareholder and the asset is not paid for in full.

As a rule, the transfer of assets to/from the limited liability company must be priced at market/retail value. Market value or retail value is the price a vendor of the assets/goods can expect to charge an independent customer.

The sale of overpriced assets to limited liability companies or the  purchase of underpriced assets is a taxable withdrawal to be added to the shareholder’s income in the tax return.

The income/withdrawal benefit for the shareholder is usually calculated to the difference between the price paid and the retail value.

In cases where the retail value does not cover the company’s costs or a reasonable return on the investment, the withdrawal benefit may be set by discretionary assessment.

The company must declare the withdrawal in its tax return and report the dividend for the shareholder in the shareholder register statement.

For more information, please refer to “Uttak av formuesobjekter og/eller tjenester” (Withdrawal of assets and/or services) in Skatte ABC (a guide to the Norwegian tax rules, available in Norwegian only).