Taxation of individuals

Residents are subject to tax on all income and capital gains from any source and for non-residents only from Norwegian sources. You are considered a resident if you are present in the country for 183 days in the last 12 months or 270 days in the last 36 months.
Every person who starts working as an employee must request a “deduction card” containing, in addition to his tax code, also the amount of deductions that the employer must make from the salary. In the absence of this, the employer must make deductions equal to 50% which will then be compensated at the moment in which the card is acquired. If the contractual and personal conditions of the taxpayer are significantly modified, these must be communicated to the Administration which will provide a new card. If, on the other hand, you believe you are earning an income lower than the minimum taxable amount, then you need to request an "exemption card" which authorizes the employer not to make any withholding taxes.
Taxpayers are divided into three classes that give access to different types of deductions:  

• class 0 includes non-residents, those who have only occasional income and entities considered non-companies for tax purposes.

• class 1 includes singles and families where both spouses have an income and declare separately;

• Class 2 applies to single-income households (with a dependent spouse or income of less than NOK 44,751) and to those declaring income jointly.

Taxable income is calculated by subtracting the deductions provided for by law from the total taxable income. Losses on the sale of securities are deductible from income. Dividends are taxed at a fixed rate of 22% after their amount is increased by 44%. Thus the effective tax rate is 31.68%.
Taxpayers can choose whether to deduct the expenses actually incurred and duly documented or request the standard flat-rate deduction. In the first case, the deductible expenses are:

• interest on debts;

• social security contributions;

• transport costs to and from the workplace;

• childcare costs (kindergarten, babysitter, post-school activities, etc.). The spending limit is 25 thousand crowns for the first child and 15 thousand for the following ones;

• losses on financial instruments;

• donations to charitable organizations . 

The standard deduction is instead equal to 46% of the income with a minimum of 4,000 crowns and a maximum of 109,850 crowns (double for couples who submit a joint declaration).
The general tax is applied to all income (work, business, capital), has a rate of 22% (19% for residents in the Finnmark and Nord-Troms regions) and is divided between the State, the County and the Common.
A progressive tax (called "bracket tax") is also applied to income from work and retirement, which is applied in brackets with an exempt threshold of 190,349 crowns and ranging from a minimum of 1.70% to a maximum of 17.4 % for incomes over 2 million crowns.

Income relating to sole proprietorships is calculated with the same rules as corporate tax and discounted at a rate of 22% plus any bracket tax.
At the beginning of April of the year following the reference year, a pre-filled return is sent to the taxpayer which must be checked, corrected and re-submitted by the end of the month.

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Social Contribution  

The Social Security Act sets out the various benefits and payments to the national insurance scheme.

The scheme is financed by social security contributions from the individual and the employer as well as subsidies from the state and municipalities. The individual contribution is charged more for self-employed workers (11.2%) than for employees (8.0%). The employer contribution is 14.1%. The rates are determined by Parliament in the annual decrees on contributions to the national insurance scheme.

Social security contributions are collected on the basis of "personal income".

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Contributions paid by the employee
Individuals, including non-residents who receive remuneration for services rendered in Norway, are subject to social security and pension contributions, which are paid together with income taxes. Foreigners can be fully or partially exempted from social security contributions, according to social security agreements, or upon request, provided they are adequately insured in their country of origin. The Agreement on the European Economic Area (EEA) can also exempt nationals of member countries from Norwegian social security.

The following conditions apply to both employed and self-employed workers:

Income not exceeding NOK 64,650 is exempt; the contribution cannot constitute more than 25% of the income for amounts exceeding NOK 64,650.
The income received by people under the age of 17 or over 69 is subject to the contribution, but with a reduced rate of 5.1%.
The contribution of the natural person is not deductible for tax purposes.

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Employer contribution
The contribution is based on the total costs of the Norwegian gross salary (and the taxable benefit). The employer contribution is collected at a rate of 14.1%, but may be lower if the employer is established in some sparsely populated areas.

Social security agreements can exempt the employer from this contribution . 

The employer's contribution is deductible for tax purposes by the employer to the extent that the wages to which it relates are deductible.

Taxation of legal persons

The tax is paid on all income and capital gains of resident companies and on Norwegian source of income for non-residents. You are considered resident if you are established under Norwegian law and, in general, if the control and management center of the company is located in the country.
Taxable income is calculated starting from the result for the year and applying the changes required by law. Passive income and capital gains are also included in taxable income, with the exception of those from equity investments which are exempt. The expenses necessary for the production and maintenance of taxable income are deductible with some limitations provided for by law. Fixed assets with a value of less than 15,000 crowns and with a duration of less than 3 years can be deducted immediately, while for the others, the amortization table required by law must be respected. For intangible assets for which no depreciation percentages are set, the useful life period is considered. Interest expense in excess of interest income is deductible only if it does not exceed SEK 5 million or is paid to unrelated parties.
A differentiated system is envisaged for dividends received according to the country of origin of such income. For countries belonging to the European Economic Area there is 97% exemption while the remainder is taxed at the ordinary rate. For countries outside the EEA, this exemption is only valid if you have a stake of at least 10% for at least two years and the country is not considered to have privileged taxation. In the case of tax havens, it is also necessary to demonstrate that there is a concrete economic activity in the country in question. The exemption is total for intra-group dividends from Norwegian companies controlled directly or indirectly for at least 90%. Dividends paid, if not exempt, are instead subjected to a withholding tax of 25% unless a different rate is provided for in the double taxation agreements with other countries.
Losses can be carried forward indefinitely while, only in the event of liquidation of the company, it is possible to carry back losses for up to two years.
Taxable income is taxed at a single rate of 22%. This rate increases to 25% for companies that carry out financial activities. Special taxation regimes are envisaged for oil activities, shipping and the production of hydroelectricity. The tax return must be filed by the end of May. During the year, two advances must be paid (on February 15th and April 15th) on the basis of the income of the previous year, any balance deriving from the return must be paid within three weeks of its presentation.

 
Value Added Tax - VAT

The Norwegian value added tax works with a system of deducting the tax paid on purchases from that due on sales in a manner substantially similar to that existing in the European Union and affects all internal transactions of goods and services and imports. There are three rates: an ordinary rate of 25%, a reduced rate of 15% for food and a minimum rate of 12% for public transport, hotel services and some types of shows. The zero rate is foreseen for exports, international services and some specific goods and services. Healthcare, financial, educational services, property rentals and some cultural and entertainment services are exempt.
Despite the fact that Norway is part of the European Economic Area, transactions with EU member countries are considered as real imports/exports and therefore subject to the related customs formalities and VAT processing.
Commercial entities with a turnover exceeding 50,000 crowns (140,000 for philanthropic and charitable associations or organizations) are obliged to register for the application of VAT. It is possible for groups (fiscal unit) to register as a unitary entity. The tax is due at the end of each two-month period. ​

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The wealth tax
The tax is paid by all taxpayers (with the exception of corporations) on the basis of the net value of their assets. For residents, all properties owned everywhere are considered, while for non-residents only specific types of wealth owned in the country.
For real estate the tax varies between 0.2% and 0.7% depending on the municipality in which they are located (Municipalities have the right not to apply the tax). For other assets, the single rate for natural and legal persons is 0.95% made up of 0.7% of municipal tax and 0.25% of state tax (for capitals higher than 20 million crowns the state tax rate is raised to 0.4% for a total of 1.1%). For resident natural persons there is an exemption of 1.7 million crowns (doubled for couples who make a joint declaration).