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TAXES IN NORWAY

Taxes in Norway are something that cannot be avoided if you run a business there. They depend on the type and scope of your business. In this section you will find all the necessary information about the rates and obligations of entrepreneurs, and the deadlines for paying taxes in Norway.

BUSINESS AND TAX

Tax liability is a staple that every entrepreneur in Norway must keep in mind. The rates and types of taxes depend on the type of business - different rules apply to owners of sole proprietorships and others to owners of companies.
The basis is income tax, or 22% on the company's profit, and social security contributions - 11.4% on the company's profit. Entrepreneurs are required to declare their projected profit for the following year, and on this basis the authority calculates the advance payments, which must be paid on certain dates: March 15, June 15, September 15 and December 15.
Other taxes in Norway depend on the turnover of the business and whether the entrepreneur has employees - over time it is necessary to register the company as a VAT payer and pay taxes on the employment of employees.

Taxes in Norway - Employment costs A company with a turnover of more than NOK 50,000 in a consecutive 12-month period should be entered in the VAT register - once registered, the company should pay value added tax - settlement is made through a tax return submitted through the altinn.no portal.

TAXES RELATED TO THE EMPLOYMENT OF EMPLOYEES

Employing employees in a Norwegian company means incurring costs on this account other than the salary itself - some of which are fixed and must be paid regularly, and others relate to the performance of work assigned by the employer.
Fixed costs are:
  • employment fee (14.1% on gross salary),
  • pension insurance (2% on gross salary),
  • feriepenger (10.2% on gross salary - employees under 60, 12.5% on gross salary - employees over 60).
Fixed costs total 26.3% on gross pay.
Variable costs are:
  • sick pay,
  • employee training,
  • work clothes, etc,
  • insurance for accidents at work.
Variable costs are about 5% of the gross salary amount.

INCOME TAX IN A SOLE PROPRIETORSHIP

An entrepreneur in Norway is required to declare the amount of anticipated profit - overskudd (form RF-1102), either after starting business or at the beginning of the year - on this basis the office calculates the tax due. Advances on income tax must be paid on the specified dates: The entrepreneur should, by May 31 of the following year, submit to the office a Skattemelding - a tax return showing the financial state of the company (Selvangivelse for næringsdrivende), through which the office can calculate the tax due for the past year. After receiving the document from the office (Skatteoppgjøret - by October 17), the entrepreneur should finally settle with the office - pay the outstanding tax or receive a refund of overpaid tax.

Taxes in Norway - income tax Income tax in Norway is 22% on the company's profit - the amount of tax increases with the company's income. Tax thresholds have also been established - changing each year - beyond which the company is required to pay the appropriate amount of tax.
The tax thresholds in Norway for 2021 are:
  • up to NOK 184,800 - 22%,
  • from 184,800 NOK to 260,100 NOK the surplus is multiplied additionally by 1.7%,
  • from 260,100 NOK to 651,250 NOK the surplus is multiplied additionally by 4%,
  • from NOK 651,250 to NOK 1,021,550 the surplus is multiplied by an additional 13.2%,
  • from 1,021,550 NOK the surplus is multiplied additionally by 16.2%.

INCOME TAX IN THE AS COMPANY

For AS Company, income tax in Norway is paid in two installments:
  • February 15,
  • April 15.
Advance payment amounts are calculated by the office on the basis of the company's profit in recent years - advances are paid in the year following the tax year (information on the amount of tax is sent to the entrepreneur in January).

The entrepreneur has the opportunity to ask the office to change the calculated advance payment amount - this should be done by the end of January on the form Søknad om endring av/krav om forskuddsskatt for upersonlige skattytere.

Taxes in Norway - Documents AS

VAT

The obligation to register as a VAT payer in Norway applies to companies with a turnover of more than NOK 50,000 in a consecutive 12-month period (sales of goods and services at any stage of sale - tax is charged on the sales price and on imports - tax is charged on the statistical value of the goods in question).
If the company does not have a permanent establishment in Norway, it should have a representative (a person living or doing business in Norway) who will register the business and be responsible for the tax liability to the office.

A company in Norway that is a VAT payer should include the abbreviation MVA (Merverdiavgift) on its invoices - this means that VAT is added to each good or service.

VAT in Norway is settled by means of a tax return, which should show the company's costs and revenues - the document should be submitted within the deadlines set by the tax office.

Taxes in Norway - Company VAT The tax return should include, among other things, account statements for a given period of time (kontoutskrifter), invoices issued by the company (revenue invoices), costs incurred during a given period of time (invoices, receipts), and other documents such as a vehicle card or premises rental agreement.

The VAT return can be submitted via altinn.no.
Norwegian VAT is divided into three rates:
  • basic (25%),
  • reduced (15%) - applies to food and beverages,
  • low (12%) - is charged for passenger transportation and culture (TV, radio, cinemas).
Registration in the VAT payers' register (Merverdiavgiftsregisteret) can be done: A company's registration as a VAT payer in Norway means that the entrepreneur is obliged to keep accounts in accordance with applicable regulations (the Accounting Act of November 19, 2004 No. 73, the VAT Act) - the company should calculate and pay tax on sales of goods and services.

Foreign businesses are required to create sales statements (omsetningsoppgaver) on set dates and pay the VAT due on a regular basis - they can also deduct VAT charged by customs and when purchasing goods necessary for doing business in Norway.

An entrepreneur in Norway has the opportunity to recover tax paid before the company was registered for VAT - an additional return must be filed showing tax from costs from the period before registration for VAT.

MVA DECLARATION

The MVA (Merverdiavgift) declaration is a tax return, which is a form of accounting for VAT (value added tax) by companies registered in the taxpayer register. The tax return must show the company's expenses and revenues
The VAT return must be submitted via altinn.no within the deadlines set by the authority.

Taxes in Norway - tax return
The accountant will need the following documents to complete the VAT return:
- account statements for a given period of time (kontoutskrifter),
- invoices issued by the company (revenue invoices),
- costs incurred during the given time period (invoices, receipts),
- other documents such as a vehicle card or premises lease agreement.
In 2017, there have been changes regarding the filing of the tax return in Norway - VAT-registered individuals and companies should settle import fees through the return (the regulations regarding shipping documents and customs duties have not changed). The value of imported goods should be shown in the import section for statistical purposes, but it does not affect the settlement with the authorities - VAT cannot be deducted, as it has not been paid at the border.

TAX BREAKS

In the annual tax return in Norway, an entrepreneur can make certain deductions based on the tax credits to which he is entitled - either by virtue of his pendler status or standard deduction. An entrepreneur should know which deductions he can make in order to take full advantage of his deductions.

Taxes in Norway - settlement *Note: As of 2019, the 10% relief is eliminated.

Individuals with pendler status can deduct:

Pendler status in Norway can be obtained by foreign workers who commute to their place of permanent residence - for work's sake they live outside their proper place of residence, which they visit regularly, and have family (spouse, child) in their home country.

To be able to deduct commuting expenses (pendlerutgifter):

Standardfradrag is a standard deduction - 10% on employment income (gross salary and allowances such as cash bonuses, benefits in kind, excess reimbursement of expenses), but not more than NOK 40,000.

Using Standardfradrag, you cannot use any other deductions you are entitled to.
The standard deduction entitles you to deduct:
  1. deductible expenses (minstefradrag),
  2. tax-free amount (personfradrag).
Note: Starting in 2019, the 10% deduction is eliminated.

Individuals who do not use the standard deduction are entitled to deduct:
  1. travel to the place of permanent residence,
  2. costs of ferry and barge tickets,
  3. accommodation costs,
  4. food costs,
  5. interest on loans taken out in Poland and Norway.

Permanent residents in Norway are entitled to tax benefits - they can deduct expenses such as:

IMPORT / EXPORT

The exchange of goods and services between Poland and Norway is possible through the European Economic Area (EEA). Customs rates are set by Norwegian Customs at www.toll.no - goods are assigned specific customs rates and tariffs, as well as exemption from fees and duties.
VAT-registered companies do not pay VAT at the border, but settle through a tax return.
Information about the goods is contained in the SAD (prepared by customs agencies), which must be presented at the Norwegian border - an invoice for the purchase of goods must be attached to the document.

In a situation where the company issues an invoice to the entrepreneur with VAT, you should send a confirmation of the export of goods and ask for a correction of the invoice, so that the input VAT will be corrected.

MVA tax on imports is: Electric cars, ships and their parts, electric windmills (energy sources), etc. are not taxable.

VAT for exported goods should be paid by the recipient.

Taxes in Norway - export In order to treat the sale of goods as an export, the export outside the European Union must be confirmed at customs - sometimes the export of goods requires special permits as in the case of medicines (www.legemiddelverket.no), weapons (www.politi.no), food and dietary supplements (www.mattilsynet.no), or alcohol.
FAQ

TAXES IN NORWAY:


1. What taxes apply to entrepreneurs in Norway?

First of all, you must pay income tax - 22% on the company's profit, in addition, after exceeding the thresholds established for the tax year, the Norwegian entrepreneur must add specific amounts to interest on the excess. It is compulsory to pay social security contribution - 11.4% and VAT, if the company is registered in the register of payers. When an entrepreneur employs at least one employee, he must pay an employment tax of 14.1% on the amount of gross wages.

2. What is the output tax in Norway?

Input tax is value added tax - calculated on the value of goods and services sold - paid to the tax office.

3. What is input tax?

Input tax is value-added tax - added to the value of taxable goods and services - which can be deducted in the VAT return.

4. What services are not subject to Norwegian VAT?

Financial, insurance, health and cultural services are not subject to VAT - this means that if you are operating in one of the listed industries, you are not required to register in the register of payers and issue invoices with input VAT.

5. Who is required to have a tax identification number in Norway?

In Norway, every registered business must have a tax identification number (Organisasjonsnummer).

6. What is a tax identification number used for in Norway?

A tax identification number (Organisasjonsnummer) is necessary to deal with the formalities of running a business - it is used to identify legal entities, pay insurance premiums, advance tax payments or VAT.

7. How do you obtain a Norwegian identification number?

You can get a tax identification number (Organisasjonsnummer) after registering your business with the Enhetsregisteret.

8. What is a double taxation agreement?

The Double Taxation Agreement (dated September 9, 2009) is about defining the rules of cooperation between Norwegian and Polish entities so that taxes are paid in only one of the countries. It also aims to prevent income tax evasion.

9. Who is affected by limited tax liability in Norway?

Limited tax liability applies to those who stay in Norway for no more than 183 days in a year or less than 270 days in three consecutive years, in which case only income received from a Norwegian employer is taxable in Norway (all income must be reported in the tax return in the home country).

10. Who is a tax resident in Norway?

To be a tax resident, you must be in Norway for more than 183 days in a year or more than 270 days in three consecutive years, in which case all income is taxable, and all income earned is shown on your Norwegian tax return. You can also show ties to Norway, such as the fact that you own an apartment, bank account or business in the country.

11. What deductions can be made on the Norwegian tax return?

Deductions depend on the tax credits that are available and used - taxpayers can deduct, among other things, travel expenses (e.g. airline tickets), housing rental costs, kindergarten costs, loan interest, etc.

12. Can the deadline for filing a tax return in Norway be postponed?

To extend the deadline for filing a tax return, you must file an application stating the reason for the delay - this can be done through Altinn.no.

13. The tax base is calculated on net or gross turnover?

Income tax in Norway should always be calculated on income calculated in net amounts.

14. Is it possible for an entrepreneur to deduct the tax-free amount in Norway?

The tax-free amount (Minstefradrag) applies only to employees (104,450 NOK for a full year of work) - this means that an entrepreneur cannot take advantage of this particular deduction. Business owners have the option to deduct Personfradrag - on income less than NOK 52,450 the entrepreneur does not have to pay tax.

15. How much is Norwegian income tax?

Income tax is 22% on the company's profit - but once you exceed the tax thresholds established in Norway, you must pay an additional percentage on the excess income.

The tax thresholds in Norway for 2021 are:

16. How are income tax and advance tax payments calculated in Norway?

Income tax in Norway is calculated by the office on the basis of the income declaration for the next year submitted by the entrepreneur (either after the start of the business or at the beginning of the year) - 22% for income tax and 11.4% for social security contributions. Income tax is paid in the form of advance payments on specific dates.

17. What does the amount of income tax in Norway depend on?

The amount of income tax depends on the income and the period for which the entrepreneur has worked in Norway - the amount of tax payable is also affected by the tax credits to which you are entitled.

18. When is the deadline for paying advance payments for Norwegian income tax?

Advance payments for income tax (in four installments) should be paid on the dates specified by the office:

19. By what date should an entrepreneur file a tax return in Norway?

An entrepreneur should file a tax return by May 31 - the return (Skattemelding) should show income earned and tax deductions applied.

20. What are the consequences of not filing a tax return in Norway by the deadline?

Failure to file a tax return will result in the office charging the tax due for payment - an entrepreneur who fails to meet his tax return obligation will receive a financial penalty for failing to meet the required deadline.

21. What fees are payable by an entrepreneur in Norway who employs employees?

An entrepreneur who employs workers should pay employment tax - Arbeidsgiveravgift of 14.1% to 0% (depending on the zone). You should also pay Feriepenger - 10.2% of the gross salary amount and mandatory pension insurance OTP (Obligatorisk tjenestepensjon) - at 2% of the gross salary amount. Entrepreneurs in Norway also have to reckon with the possible costs of sick leave (the company pays the employee for the first 16 days of benefits), training (including HMS training) or work clothes.

VAT:


1. What does MVA mean in Norway?

MVA (Merverdiavgift) is the tax on goods and services, or VAT, in Norway. VAT payers should put the abbreviation MVA after the company's organizational number on their invoices.

2. What is the abbreviation MVA used for?

The abbreviation MVA should be placed after the organizational number on invoices issued by a VAT-paying company.

3. Who is obliged to pay VAT in Norway?

In Norway, the obligation to pay VAT applies to companies with a turnover of more than NOK 50,000 in a consecutive twelve-month period - you must then register your business in the VAT register.

4. How can you report your business to the VAT payers' register in Norway?

Notification of the business to the VAT payers' register is done by filling out the Samordnet registermelding DEL 2 form and sending it to the office together with the invoices issued by the company for NOK 50,000 in sales (inclusive) - you can also apply through the Altinn.no portal.

5. How long does it take to register for VAT in Norway?

It takes about a month to register your business as a VAT payer.

6. How much is the VAT rate in Norway?

The amount of Norwegian VAT depends on the type of goods / services:

7. On what dates should VAT advances be paid in Norway?

Advance payments for VAT in Norway must be paid on the dates specified by the office:

8. How can you file a VAT return in Norway?

You can file your VAT return electronically via Altinn.no within certain deadlines.

9. How is Norwegian VAT calculated for imported goods?

For imported goods, the amount of Norwegian VAT is calculated on the amount of purchase of the goods.

10. How often is VAT settled in Norway?

VAT must be settled every two months on the dates set by the office - April 10, June 10, August 31, October 10, December 10, February 10. Businesses whose income does not exceed NOK 1,000,000 have the option to settle once a year.

11. Can Norwegian VAT be settled once a year?

Businesses whose income does not exceed NOK 1,000,000 have the opportunity to settle once a year - an appropriate application must be submitted to the office by the end of January.

12. Should an AS company also settle tax in Norway every two months?

AS company (with income not exceeding NOK 1,000,000) has the option to pay tax once a year - by the end of January, the appropriate application must be submitted to the office.

13. Who is a VAT attorney in Norway?

A VAT attorney represents a company in tax matters and is responsible for calculating and paying VAT on behalf of a foreign company that does business with a Norwegian contractor - an attorney can be a company or a person with a Norwegian permanent personal number.

14. Is it possible to recover VAT for goods purchased prior to registration of the business in the payer's register?

It is possible to recover VAT on goods purchased prior to registration of a business in the payer's register - you should submit an appropriate application to the office.

15. How can VAT be recovered for goods purchased before registering the business in the payers' register?

An entrepreneur who wants to recover VAT for goods purchased before registration of the business in the VAT payers' register should, together with the first VAT return, submit a return for the period before registration of the business as a VAT payer.

16. How can VAT be recovered for goods imported from Poland?

When the vendor has issued an invoice to the entrepreneur with input VAT, one should insist on issuing a corrected invoice - after receiving a zero invoice, the company will receive a refund of the overpaid VAT.

17. What to do when the office charges too much VAT?

When the VAT charged by the office is too large, you should re-check the tax return sent to the office and possibly appeal the office's decision with the reasons for the request.

18. How to check if a company is a Norwegian VAT payer?

A company registered in the VAT payer register will be marked on www.brreg.no - in the foretak/selskap field, enter the name of the company, if it displays: Registrert i Merverdiavgiftsregisteret, the company is a VAT payer.

19. What is a zero invoice?

A zero invoice is an invoice without input VAT - issued by foreign sellers (for imported goods) and for exports of goods abroad in Norway.

20. How to file a tax return online?

You can file a tax return using Altinn.no - you need to fill out form RF-0002, based on the completed application the system will calculate the amount of tax to be paid (field avgift å betale) or to be refunded (field til gode).

TAX BREAKS:


1. What are the applicable tax benefits in Norway?

The tax breaks that apply in Norway are Standardfradrag, pendler status and ordinary settlement.
Note that as of 2019, the 10% relief is eliminated.

2. What is Standardfradrag?

Standardfradrag is a tax deduction (10%) - the write-off cannot be greater than NOK 40,000.

3. Who can benefit from the Standardfradrag write-off?

The Standardfradrag write-off is available to those who have been working in Norway for no more than two years - the duration of stay is documented with, for example, a registration certificate.

4. What documents are needed to settle the 10% relief?

When settling the Standardfradrag, you must fill out a preliminary tax return (Skattemelding) marking the relief and stating the amount of the deduction - the office verifies whether the deduction is legitimate and sends the taxpayer the final amount of tax to be paid (Skatteoppgjøret).

5. What does it mean to have Pendler status?

Pendler status is granted to individuals who meet certain conditions, including that they regularly visit family in their place of permanent residence - this type of relief allows for the deduction of expenses such as travel to the home country or the cost of renting an apartment in Norway.

6. Who can benefit from Pendler status?

Pendler status can be used by a person who has a family (spouse/children) in the home country - a marriage certificate and proof of joint registration with the family must be presented to confirm this fact. Regular visits to the home country can be proven with airline tickets, bus tickets or from boat trips.

7. What can a person with Pendler status deduct?

A person with Pendler status can deduct the cost of renting an apartment, electricity bills (in a rented property) or travel to the home country - the person taking advantage of the deduction should show copies of rent or electricity bills, a rental agreement or confirmations of travel to Poland.

8. What documents are needed to settle as a Pendler?

To settle as a Pendler, a set of documents must be provided:

9. What is an ordinary settlement in Norway?

Ordinary settlement is a type of tax deduction in Norway that can be used by people who are not eligible for other deductions - you can deduct childcare costs (kindergarten, day care center), commuting expenses or interest on a loan.

10. What documents are needed to make an ordinary settlement in Norway?

To file an ordinary settlement you must have: