Norway

Flag Tax of Norway

Corporate tax

Rate

The corporate tax rate of Norway is 28%. Corporate tax is imposed on company profits. Company profits consist of business income, capital gains and passive income. Business expenses are deducted from these incomes in order to arrive at the profit.

Taxation of dividends

Dividends received by Norwegian companies which reside in the EEA are exempt from tax p to 97%. The remaining 3% are taxed at the standard 28% tax rate. The 97% tax exemption rule can only be applied if there are actual business activities conducted in the corresponding country. Diveidens received from non-EEA countries are 97% exempt if the Norwegian company has had a minimum 10% Stock ownership during the last 2 years at the very least. Dividends from intragroups can be exempt completely from tax if certain conditions are met. Among these conditions is the stock ownership percentage of both companies which needs to be more than 90%.

Capital gains

Capital profits are taxable at 28%. Tax exemptions apply for capital profits on stocks.

When Companies or assets are migrated from Noway an exit taxation legislation is applied. There are a few exemptions to the exit taxation rules if companies are migrated to other EEA jurisdictions. The main condition is that the migrated company will conduct actual business in the new jurisdiction. Capital profits made from shares in companies outside of the EEA are tax exempt if a minimum of 10% of the outstanding stocks have been held for a minimum of 2 years.

Losses

Losses can be carried forward indefinitely. Liquidation losses may be carried backwards for up to two years.

Withholding tax

There is no withholding tax for royalties. interests or technical service fees. No withholding tax on dividends is imposed for EEA corporate residents, as long as there is a real business activity in the relevant country. Dividends outside of the EEA are subject to  a 25% withholding tax, unless otherwise is stated in a corresponding tax treaty.

 

Individual  tax

General

To be considered a permanent resident of Norway you should spend more than 183 days per year in the country. Also if you spend more than 270 days during the last 3-year period you are considered a permanent resident.

Taxable income

Residents and domiciles of Norway are subject to norwegian income tax on their world-wide income.

Nonresidents are taxed on income received from Norwegian property and Norwegian directors´fees.

Nonresidents temporarily present in Norway who are carrying out services, and nonresidents working in Norway on behalf of employment agencies are taxed. In some cases Noway´s mandate to tax these non-residents may be restricted under a tax treaty

Rates

A combined national and municipal tax rate of 28% applies to all net income. A national marginal tax of 9% applies on all income between NOK 490.000 and NOK 796.400. A national marginal tax of 12% applies on all income above NOK 796.400.

Penalties

Penalties are between 30% and 60% of the tax that has been avoided. On top of this interest can be charged.

Capital Gains

Capital profits are taxed at a rate of 28%. Permanent residence sales are subject to tax if the object has ben possessed for less than one year. Stock profits are included in taxable income.

Deductions

Stock transaction losses are 100% deductible from taxable income. All resident taxpayers have the right to enjoy unlimited deduction for interest paid on debts. Incidental personal expenses of up to 38% of salary (minimum NOK 4.000 and maximum NOK 78.150) are subject to a standard deduction from ordinary income

Real Estate

Stamp Duty Tax at 2,5% is charged. A municipal occupation rate is charged on real property. A property tax corresponding to between 0,2% and 0,7% of the property value is to be paid on a yearly basis.

Net Worth Tax

A wealth tax on individuals is applicable in the form of a 1,1% flat rate yearly tax on all capital exceeding NOK 750.000.

Inheritance Tax

Inheritance tax is payed on transferred assets in excess of certain thresholds. Progressive rates apply up to the maximum of 15%.

Social Security

All persons working in Norway or residents are members of the National Insurance Scheme. The financing is made oup of several bases. The employee contributes 7,8% of gross employment income. The employer contributes anywhere between 0% and 14,1%, depending on region. The contribution of pensions is 4,7%. Self-employment has specific rules in place.

VAT

VAT applies to all sales of goods, services and imports. The VAT is 25%. VAT for food is 15% and VAT for hotel acommodation, cinema tickets and passenger transport is at 8%. There are specific transactions that are exempt from tax.

 

Other

Tax year. Calendar year.

Tax treaties. Norway currently has 85 treaties.

Filing requirements. There are a total of six filing and payment dates per year.

Registration (for VAT purpose). Annual turnover above NOK 50.000 means a business must register for VAT purposes.

 

Links

Tax authorities. Norwegian Revenue Authorities

Consulate

Local Tax Resources

Chamber of commerce

(Online realtor/stock exchange)