Fixed assets in onshore wind power
There are specific rules for adjusting the depreciation base for assets acquired before 01.01.2024, and these calculations must be made for each individual asset for non-depreciable assets, linearly depreciated assets, and for each balance for balance-depreciated assets.
If an asset or balance concerns assets both within and outside the resource rent taxable activity, they must be split into two parts: one for resource rent taxable activity and one outside the resource rent area, to ensure that depreciation, gains, and losses within and outside the resource rent area can be reported separately in the future. Alternatively, separate reports outside of Period & Year with these calculations must be kept. The latter option will require overrides for individual assets or balances for each year, and it is not recommended.
The specific transition rules for fixed assets can be found on the Norwegian Tax Administration’s website, under the section for Resource rent tax on onshore wind power.
The cost price of tangible fixed assets reduces taxable income according to several different regulations that must be treated separately:
- Depreciation, gains, and losses under the normal rules for calculating the company’s general income
- Depreciation of the adjusted depreciation base as of 01.01.2024, with one-fifth annual depreciation for resource rent income
- Direct deduction of acquisitions that can be directly deducted from the resource rent income
- Depreciation of assets that are to be deducted in the calculation of corporate tax in the resource rent income
Taxable objects can be one of the following:
- Balance depreciation of assets in balance group e-j (special balances for each unit)
- Balance depreciation of the master balance in balance groups a, c, and d
- Non-depreciable assets
- Linearly depreciated assets
Used in resource rent taxable activities
Here, the company must specify whether the taxable object is an asset used in resource rent taxable wind power installations.
It is recommended to separate the objects so that there are separate master balances in groups a, c, and d for each wind park and for those outside the resource rent taxation. For other assets with mixed use, it is also recommended to separate assets into their own objects for each wind park and areas outside the resource rent zones.
No deduction is allowed for activation costs for the acquisition of land or other payments to landowners, rights holders, municipalities, etc., as mentioned in the Tax Act § 18-10 third paragraph letter a number 1 third sentence, nor for costs related to the acquisition of existing wind power installations. These objects must therefore be treated as objects outside the resource rent area.
Wind power installations that are realized without taxation, cf. Tax Act § 18-10 seventh paragraph letter b, must be treated separately regarding the continuation of the seller’s tax positions.
If the depreciation applies to assets linked to several wind power installations, the depreciation must be allocated between the wind power installations. It is recommended that for Period & Year, one object is created for each wind power installation, so that automatic calculations can be applied without the need for overrides.
Separate treatment of assets acquired before 2024 and assets acquired in 2024 or later
Assets acquired before 01.01.2024 shall have a new depreciation base calculated, which is only used when determining resource rent income, and this new depreciation base is depreciated with one-fifth annually from 2024 to 2028. Acquisitions made from 2024 onward will be directly deducted from the resource rent income.
It is recommended to separate balance depreciation and other taxable objects from previous years and new objects to ensure that assets acquired before 01.01.2024 and assets acquired in 2024 and later are not recorded on the same balance or the same taxable object, thus simplifying the calculation of taxable depreciation.
Directly expensed investment costs
These are taxable objects marked with Yes, with direct deduction, but the field can be overridden if desired. Overriding is not necessary if assets acquired before and after 01.01.2024 are kept separate.
The direct expensed investment cost for resource rent income in this year is entered in this field as an amount in NOK. This applies to investments made from 01.01.2024.
On the Wind Power tab Deductions, the directly expensed investment cost will be deducted from the corresponding field in the depreciation of taxable objects.
On the Wind Power tab Corporate Tax, the directly expensed investment cost will be reversed and replaced by the regular taxable depreciation of the same objects marked with Yes, with direct deduction. This field can also be overridden.
Fixed assets from previous years
The taxable value as of 01.01.2024 and the adjustment of the balance as of 01.01.2024 according to the specific rules for wind power installations must be registered manually, and depreciation of the depreciation base will be distributed with one-fifth depreciation in 2024 and the following four years (2025-2028) until the recalculated taxable value is fully depreciated in the resource rent income.
Depreciation in resource rent tax with one-fifth annually from taxable depreciation will automatically transfer to the field for depreciation under Wind Power Installations tab Deductions.
On the Wind Power-tab Corporate Tax, depreciation in resource rent tax will be reversed and replaced by taxable depreciation under other rules. These depreciations must be calculated separately and registered on this page.
DThe specific transition rules for assets can be found on the Norwegian Tax Administration’s website, under the section for Resource Rent Tax on onshore wind parks.