| Norway Income Tax Norway Personal Income Tax rates for 2009:
The general combined rate of the national and municipal income taxes: 24.5% - 28.0% + Income tax payable on gross personal income: 0% - 12%
The general combined rate of the national and municipal income taxes is 28%. A lower rate of 24.5% applies for the counties Finnmark and Nord-Troms. A personal allowance of NOK 81,600 (2009) is available to jointly assessed married couples and for single persons with dependants. The allowance for single persons without dependants and married persons assessed separately is NOK 40,800 (2009).
An additional national income tax is payable on "gross personal income" (which includes gross income from employment or self-employment, including pensions).
With effect from 1 January 2009, the rates of the national gross personal income tax are:
Taxable Income (NOK) / Rate (%)
0 - 441,000: 0%
441,001 - 716,600: 9%
716,601 and above: 12%
In addition, social security taxes are paid. Employees pay 7.8% of gross salary income. For self-employed individuals the rate is 11%.
Wealth tax is charged on the net value of assets. The rates are progressive from 0% to 1.1% including national and municipal net wealth taxes.
Income tax is payable by Norwegian residents on income derived from all sources. Non-residents are only required to pay tax on Norwegian-sourced income. Residency is determined by domicile or where the individual has spent, or intends to spend, more than six months of the tax year.
Under almost all Norwegian tax treaties, foreign-earned income is exempt from Norwegian tax. Where there is no treaty, credit for foreign taxes is given up to the amount of Norwegian tax on foreign income.
Income tax is payable on assessable income less allowable deductions. Assessable income includes business income, employment income, certain capital gains, rent and interest income. Some expenses incurred in earning the assessable income are deductible. Some actual expenses can be replaced by standard deductions.
Norway Corporate Tax RateCorporate tax rate in Norway for 2009 is 28%.
Company tax is payable by Norwegian resident companies on non-exempt income derived from all sources. Non-resident companies are required to pay tax on income sourced in Norway.
A company is treated as resident if its central management and control or head office is located in Norway and, for all practical purposes, a company registered in Norway is also considered a resident.
The company tax rate on income is 28%. The tax year is usually the calendar year, although this can be deviated from in certain circumstances.
Tax is payable in three instalments. A preliminary assessment is issued after the end of the tax year corresponding to the accrued taxes not yet assessed. This tax is due in two instalments on 15 February and 15 April. The balance is to be paid within three weeks after the assessment is made public. Company tax returns must be filed by the end of March for the preceding tax year (this is extended to the end of May for electronically filed returns). It is possible to get an agreed postponement.
Capital gains tax: There is no separate capital gains tax. Capital gains are treated as ordinary income.
Branch profits tax: Shipping companies are not taxed on profits but when they pay dividends. There is no other special profits tax on branches of foreign companies in Norway.
Fringe benefits tax (FBT): Both residents and non-residents are taxed on fringe benefits. The value of the benefits is taxed as the top slice of employment income. The highest marginal tax rate is 51%.
Social security contributions: Employers are liable to pay social security contributions relating to salaries and benefits paid to their employees. The fee levied is 14.1% in central areas. Lower rates are available for certain employees in areas in the North of Norway.
Local taxes: Property taxes in some urban areas are levied at a maximum 0.7 % of the tax value of the property.
Other taxes: Real estate transactions are subject to 2.5% stamp duty. Property transferred by gift or on death is taxable at rates varying from 6% to 15%. Special taxation regimes apply to oil and gas. Tax rate for these companies is 78% (28% + 50%).
Foreign sourced income: Norway has rules designed to ensure that profits sourced in low tax countries are included in the controlling Norwegian company's taxable income. Generally, income from a foreign company will be included if 50% or more of the company is owned or controlled by Norwegians. A low tax jurisdiction applies where the tax payable is less than two-thirds of the tax that would have been payable in Norway.
Norway Value Added Tax (VAT) RatesThe standard VAT rate in Norway is 25%.
Reduced VAT rates are:
- 14% on food,
- 8% on passenger transport, cinema tickets and letting of rooms in hotels, motels and tourist cabins etc.
Some goods are exempt but VAT on the purchase of materials and goods is still deductible. This also applies to exports, newspapers, certain periodicals and international transportation. Other areas are exempt without any credit for input tax. This is the case for health services, cultural activities and financial services.
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