Do I have to pay tax in Norway?
How much tax do I have to pay?
Where can I get a tax deduction card?
What happens if I have to wait for the tax deduction card?
What is a tax return?
How should I fill in the tax return form?
Which deductions can I claim?
What are the tax classes?
How do I submit the tax return form?
What is a tax settlement notice?

Taxation in Norway

Employees working for a Norwegian employer are obliged to pay tax in Norway. If your stay in Norway is temporary, that is 183 days within a 12-month period or 270 days within a 36-month period, you are only liable to pay tax on income received from your Norwegian employer for work performed in Norway. If you stay longer, you are considered to be a tax resident and you will be liable to pay tax in Norway on all your capital and income in accordance with Norwegian tax regulations.

In order to avoid double taxation, countries enter into tax treaties with each other. International researchers who are citizens of the USA, Brazil, China, France, Hungary, Italy, Israel, Poland or Turkey, may be exempt from paying tax in Norway for up to two years (three for China). Details vary and are specified in the tax treaties with these countries (cf. USA Art. 15, Brazil Art. 20, China Art. 20, France Art. 21, Hungary Art. 20, Italy Art. 20, Israel Art. 20, Poland Art. 21, Turkey Art. 20).

Tax treaties cover only income tax, not National Insurance contributions.

Two bases for calculating tax:

1. Personal income (gross pay and taxable benefits and allowances from your employer). Surtax payable to the state is calculated on this basis. The basic tax-free allowance for calculating surtax is so high that many taxpayers do not have to pay surtax. National Insurance contributions are also calculated on the basis of personal income.

2. Ordinary income (gross income minus deductions). Tax payable to municipal and county authorities and equalisation tax to the state is calculated on the basis of ordinary income. The basic tax-free allowance for ordinary income is called your personal allowance.

 

Income tax: The basic rate of tax is 28 % of your gross income. National Insurance contributions are 7.8 % of your gross income. Surtax of 9 % is paid by employees who earn more than NOK 441 000.

 

You can use a tax calculator (in Norwegian) to estimate how much tax you will have to pay.

Other taxes:

Value Added Tax (VAT): The standard rate of VAT is 25 % of the net price. Reduced rates apply to certain goods and services, notably to food (14 %) and to passenger transport, accommodation services, travel agent services and cinema tickets (8 %).
Wealth tax (“formuesskatt”) is charged on the net wealth of an individual as of 1 January every year. The rate is 1.1 % of amounts exceeding NOK 470 000 for single people, NOK 940 000 for married couples.

Tax deduction cards

Everyone who works in Norway must have a tax deduction card. You must submit your tax deduction card to your employer. The tax deduction card shows how much tax your employer must deduct before paying your salary.

In order to be able to calculate the correct tax deduction, the tax office must have information about how much you expect to earn in Norway and how long you intend to stay here. To obtain a tax deduction card, you must contact the tax office where you live. If you start working before you have obtained a tax deduction card, your employer is obliged to deduct 50 % of your gross income. The difference between 50 % and the correct rate will be reimbursed as soon as the tax deduction card has been submitted to your employer.

To obtain a tax deduction card, take the following to the tax office:
A valid passport. For nationals of EEA countries and Switzerland, other identity cards are also accepted if approved as travel documents within the EU.

Read more about tax deduction cards

A residence or work permit

Your employment contract with your Norwegian employer.
Your Norwegian D-number or national identity number, if you have one.
Read more about tax deduction cards

Tax return

Everyone who works in Norway must submit a tax return. It must be submitted to the tax office by 30 April in the year following the income year. If the tax return is pre-completed and contains information from your employer, for example, you must check that the information is the same as that contained in the Certificate of Pay and Tax Deducted, which you receive from your employer in January. If it is incorrect, you must correct the information in the tax return. Keep the pay slips you receive from your employer. They provide a record of how much tax you have paid.

 

The most common deductions you may be able to claim  Minimum deduction of 36 % of gross income (“minstefradrag”). In 2009 the minimum amount was NOK 31 800 and the maximum NOK 70 350. Personal allowance   Parental allowance (“foreldrefradrag”) of NOK 25 000 for the first child, then NOK 15 000 extra per child for subsequent children. Standard deduction for foreign employees of 10 % of your gross income, maximum NOK 40 000 (not included in the pre-completed form). Deductions for commuters (only relevant to some EU/EEA citizens). Includes travelhome, accommodation costs in Norway and a per-diem deduction for food (not included in the pre-completed form).

If you stay in Norway for the whole income year, you will be entitled to the full minimum deduction and personal allowance (12/12). If you only stay in Norway for part of the income year, the deductions and allowances will be reduced accordingly. If, for example, you stay in Norway for between three and four months in the income year, the allowances and deductions will be 4/12 of the full amounts. Read more about tax return and deductions.

Tax class 1 or 2?

Your tax class is stated at the top of page one of your tax return. The tax class determines the amount of the basic deductible allowance (called the personal allowance) when calculating tax on net income (called general income). Most people will be in tax class 1. If you provide for a spouse in your home country, you may claim class 2. In such cases, you must submit proof that you are married (marriage certificate) and provide details of your spouse’s income. The personal allowance used when calculating tax on general income is twice the amount in tax class 2 as in tax class 1.

Tax return form check list:

• Are all relevant deductions included?
• Are the amounts listed on the form the same as those on your pay slips and annual statements from your bank and employer?
• Check if there is a tax treaty between Norway and the country in which you lived before coming here.
• Is your current bank account number listed on the information sheet?
• If you submit the form by post, please make sure you sign it on page two. 
  
  
  

  Submission of the tax return form

If you have not made any changes to the pre-completed form, you do not need to submit the tax return. If changes have been made, the submission date is 30 April. You can submit the tax return electronically on Altinn (in Norwegian). You can order PIN codes online (in Norwegian) or by sending an SMS to 2080 with the message “PINKODER” and your Norwegian national identity number (11 digits). You can also submit the tax return form by post.

An English version of the tax return form will be available by 2010. Until then you will have to use the translation of relevant terms and the guidelines for individual items.

Tax settlement notice

A form entitled “Foreløpig beregning av skatter og avgifter” (preliminary calculation of tax payable) is sent together with the tax return. This form shows the tax office's preliminary calculation of tax due for the past income year. You might get tax back (“foreløpig beregnet skatt til gode”) or you might owe tax (“foreløpig beregnet restskatt”). Additional taxes should be paid by 30 April, otherwise interest will be charged on the amount due.

The Tax Administration offers a simple tax calculation tool (in Norwegian) or you can calculate the amount manually (in Norwegian).

 

Once the tax office has processed your tax return, you will receive a tax settlement notice. It contains information about the income on which tax has been calculated, how much tax your employer has deducted and whether you have paid too much or too little tax. The tax settlement notice arrives in either June or October in the year following the income year.

Appeals

If you think your tax settlement is incorrect, you can appeal. If you receive your tax settlement notice in June, the deadline for appealing is 10 August. If you receive your tax settlement notice in October, the deadline is three weeks after the tax settlement notice was sent. Appeals must be submitted to the tax office.

 

The Norwegian Tax Administration has published several brochures about tax regulations   Information for foreign employees: The tax return – checking, changing, submission Information for foreign employees: Standard deduction Information for foreign employees: Deductions for commuters Information for foreign employees and Norwegian employers of foreign employees: About tax, tax deduction cards and tax returns.

 

 

See also: Norwegian Taxpayers’ Association – provides assistance about tax Nordisk e Tax – Nordic taxation portal, especially relevant to citizens of the Nordic countries