by Espen Nordbø
Business income is taxed at a flat rate of 28%. Recognition of taxable income will to a large extent be based on the leasing company's financial statements, with adjustments made for tax deprecation.
Generally, the person holding legal title to an asset used in income deriving activities will have the right to tax depreciation. However, the Directorate of Taxes has stated that when determining ownership for tax purposes, all rights, risks and obligations relating to the asset's residual value must be taken into account together with other contractual aspects. The Directorate has defined certain indicators for determining tax ownership which are similar to the indicators applied under Norwegian GAAP and IAS 17. However, the tax rules have a more generous threshold before the lessor loses the right to depreciation.
