Norway proposes amendments to implement the OECD’s January 2026 Pillar Two Safe Harbour package

The proposals are mainly intended to implement the OECD/G20 Inclusive Framework’s administrative guidance of 5 January 2026, including the new Safe Harbour rules introduced as part of the Side-by-Side Package. The consultation paper also proposes a targeted adjustment to the transitional UTPR Safe Harbour following further administrative guidance published by the Inclusive Framework on 18 May 2026.

The Norwegian Pillar Two rules were introduced in January 2024 to implement the global minimum tax framework in Norway. The Income Inclusion Rule and the Norwegian domestic minimum top-up tax have applied from income year 2024, while the UTPR applies from income year 2025. The rules are intended to ensure that in-scope multinational groups are taxed at an effective rate of at least 15% in each jurisdiction where they operate.

Why it matters

The proposal is the Norwegian follow-up to the OECD guidance covered in our previous newsletter on the Side-by-Side Package. That package introduced four new Safe Harbours and extended the Transitional CbCR Safe Harbour by one year. The Norwegian proposal seeks to incorporate those simplifications into Norwegian law and regulations

For in-scope groups, the proposals are primarily relevant from a compliance perspective. Several of the proposed rules may allow top-up tax to be deemed zero in low-risk jurisdictions or in situations covered by a qualifying domestic regime, but the rules remain elective and subject to specific conditions. The Ministry expects the proposals mainly to reduce administrative burdens, improve coordination between domestic tax systems and the global minimum tax rules, and provide more equal treatment of certain substance-based tax incentives.

See our 13 January, 2026, newsletter for information about Administrative Guidance establishing a “Side-by-Side Package” under the Pillar Two global minimum tax rules.

Main proposals

New statutory structure for safe harbour rules

The statutory changes are mainly structural. The current general authorization to issue regulations in section 5-7 is proposed to be replaced by a new chapter 8 in the Supplementary Tax Act. The new chapter 8 will grant the Ministry specific regulatory powers for each Safe Harbour rule, enabling it to prescribe further rules through regulations. The Ministry states that this is intended to make the rules more clearly anchored in statute and more accessible to users.

The consultation paper sets out draft regulations for the following Safe Harbours:

• Extension of the Transitional CbCR Safe Harbour: Under the proposal, the Transitional CbCR Safe Harbour is extended by one year. Under the proposed extension, the Safe Harbour applies to fiscal years beginning on or before 31 December 2027, but not to fiscal years ending after 30 June 2029. The transition rate for fiscal years beginning in 2027 would remain 17%, the same as for fiscal years beginning in 2026.
  
  This extension is intended to ensure a smoother transition while the Inclusive Framework continues work on permanent simplifications that may replace elements of the Transitional CbCR Safe Harbour. The existing “once out, always out” limitation would remain relevant, meaning that groups that do not use or qualify for the Safe Harbour in a jurisdiction in the first relevant year may lose access for later years in that jurisdiction.
• Simplified ETR Safe Harbour: The proposal implements in Norwegian law the Simplified Effective Tax Rate Safe Harbour introduced in the January 2026 OECD guidance. The Safe Harbour is intended for jurisdictions where the risk of top-up tax is low and a full GloBE calculation would impose disproportionate administrative burdens. Where the simplified ETR is at least 15%, or there is a simplified loss, top-up tax for the tested jurisdiction would be deemed zero.
  
  In addition to fewer mandatory adjustments and a greater number of elections, the Simplified Effective Tax Rate Safe Harbour simplifies the calculations by allowing them to be based on aggregated figures from the consolidated financial statements, rather than on figures aggregated from the accounts of each individual constituent entity in the tested jurisdiction.
  
  Although the OECD guidance generally contemplates application from 2027, the Ministry proposes to make the Simplified ETR Safe Harbour available from income year 2026 in certain cases where coordination issues between jurisdictions do not arise.
• Substance-based Tax Incentive Safe Harbour: The proposal implements in Norwegian law the Substance-based Tax Incentive Safe Harbour introduced in the January 2026 OECD guidance. Under this rule, a group may set top-up tax to zero to the extent the calculated top-up tax is attributable to qualifying tax incentives. The rule is designed to distinguish between profit-shifting incentives and incentives linked to real economic activity in a jurisdiction.
  
  A qualifying tax incentive must generally be broadly available and linked to qualifying expenditure or production-based activity. The benefit is limited by a substance cap tied to payroll costs or the value of tangible assets in the jurisdiction.
• Side-by-Side Safe Harbour and UPE Safe Harbour: Two of the proposed Safe Harbours relate specifically to the Side-by-Side system: the Side-by-Side Safe Harbour and the UPE Safe Harbour. Both rules are based on the jurisdiction of the group’s ultimate parent entity and whether that jurisdiction has a regime approved by the Inclusive Framework.
  
  Under the Side-by-Side Safe Harbour, where the ultimate parent entity is located in a jurisdiction with a qualified Side-by-Side regime, top-up tax under both the Income Inclusion Rule (IIR) and the Undertaxed Payment Rule (UTPR) would be set to zero for the group. The rule would not prevent the application of qualified domestic minimum top-up taxes in jurisdictions where the group operates. The Ministry notes that the United States is currently listed on the Central Record as having a qualified Side-by-Side regime for fiscal years beginning on or after 1 January 2026.
  
  The UPE Safe Harbour would apply more narrowly. It would set UTPR top-up tax to zero for the ultimate parent entity jurisdiction where the ultimate parent entity is located in a jurisdiction with a qualified UPE regime. It would not eliminate IIR exposure or domestic minimum top-up tax (QDMTT), and it would not apply to group entities located outside the UPE jurisdiction. No qualified UPE regimes are currently listed on the Central Record, so the rule will be relevant only if the Inclusive Framework later approves a jurisdiction’s pre-existing domestic tax regime as a qualified UPE regime and lists it on the Central Record.

Entry into force

Most of the proposed amendments would enter into force immediately and apply from income year 2026 for fiscal years beginning after 31 December 2025. The existing section 5-7 regulation-making authority in the Supplementary Tax Act is proposed to be repealed on 4 January 2027.

Opportunity to comment

The proposal is currently at the consultation stage, and affected groups and other stakeholders may use the consultation process to provide input on the proposed implementation, including practical issues relating to elections, reporting and effective dates. The consultation deadline is 3 August 2026.