As remote work and flexible working arrangements become increasingly common, companies sending employees on assignments to Norway must consider whether a home office may constitute a “place of business” for tax purposes. This article examines the circumstances under which a home office may be deemed a permanent establishment and outlines the associated tax implications.
Under most tax treaties, an enterprise may be taxed in Norway if it has a permanent establishment in the country. A permanent establishment is generally defined as a fixed place of business through which the enterprise’s activities are wholly or partly carried on.
Also read: What is considered permanent establishment in Norway
Because “an office” is explicitly listed as an example of a permanent establishment, the question naturally arises: Can a home office qualify as a place of business and thereby trigger tax liability for the employer? This assessment may also affect individuals working from a home office, who could become subject to Norwegian taxation.
According to the Commentary on the OECD Model Tax Convention—on which most Norwegian tax treaties are based—the mere fact that part of an enterprise’s business is carried out from an individual’s home does not automatically mean that the home is at the disposal of the enterprise. Whether a home office constitutes a place of business depends on the specific facts and circumstances.
The following sections outline scenarios where a home office typically does not constitute a permanent establishment, and situations where it may.
A home office will generally not be considered a location at the disposal of an enterprise when:
Business activities conducted at the home are intermittent, incidental, or minor in nature.
The employee works from the home only for a limited part of their total working time for the enterprise.
The permanence requirement is not met. Short-term or temporary use of a home office—such as for a project lasting only a few months—will often fall short of establishing a permanent establishment.
The activities performed are preparatory or auxiliary in nature, falling within treaty exceptions that exclude such activities from creating a permanent establishment.
The employee works from home primarily for personal reasons rather than because of business needs of the enterprise.
In these situations, the home office is unlikely to trigger corporate tax liability or related reporting obligations.
A home office may be considered a permanent establishment when:
The home office is used on a continuous basis to carry out core business activities for the enterprise.
A significant part of the employee’s working time is spent at the home office, and the enterprise has a commercial reason for the work to be performed from that location.
The employee’s physical presence in the country facilitates the enterprise’s business there, for example through client interactions, local project management, or the delivery of services requiring presence in that State.
In such cases, the home office may be deemed to be at the disposal of the enterprise, creating a permanent establishment in Norway.
If a permanent establishment is deemed to exist, several obligations may arise, including:
Corporate tax liability in Norway
Employer’s national insurance contributions
Payroll reporting requirements
Corporate tax return filing obligations for the foreign employer
Even where the Norwegian permanent establishment has primarily costs (typically salary expenses) and little or no revenue, the Norwegian tax authorities may apply a cost-plus method to determine taxable income attributable to Norway.
Working from a home office in Norway—whether fully remote or hybrid—may constitute “work” for immigration purposes. This can trigger work permit requirements, particularly for individuals who are not citizens of an EU or EEA member state.
Also read: Do you need a visa to work in Norway
A home office does not automatically constitute a “place of business” or “permanent establishment” for tax purposes. The assessment depends on the extent, regularity, and business purpose of the activities carried out from the home.
Following the OECD’s 2025 update to the Commentary on Article 5, particular importance is now given to how much of the employee’s working time is spent in the home office and whether there is a commercial reason for the work to be performed from that country.
Businesses with employees working from Norway—whether occasionally or permanently—should assess their exposure to Norwegian tax and immigration law and take proactive steps to mitigate potential risks.