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Tax rates in Norway

Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax (VAT) - MVA (Merverdiavgift)
Tax Rate
25%
Reduced Tax Rate
A 15% rate applies to food and beverages (excluding alcohol and tobacco, and supplies in restaurants).

A 12% rate applies to domestic passenger transport, hotel accommodation, museums, amusement parks and cinema tickets, sports events, television licenses. Please note that, due to the COVID-19 pandemic, the rate has been reduced to 6% for accommodation, leisure and transport until 30 June 2021.

Certain goods and services are zero-rated, including exports, supplies to foreign ships and aircraft and ships involved in foreign trade, books and newspapers, the transfer of a business as a going concern, and international transportation services.

Other Consumption Taxes
Customs duty is imposed on several items, particularly on agricultural products, meat and certain textiles and clothing. Excise duties are imposed on alcohol, tobacco, motor vehicles, mineral oil products, electricity, waste, dangerous chemicals, chocolate, sugar and related products, beverages, beverage packaging and food production. Certain services are also subject to excise taxes, including: registration and use of vehicles, Emissions of NOx, sale of electricity, flight passengers.

A NOK 0.013 per kWh natural resource tax applies to hydro power activities, based on one-seventh of the produced kWh for the income year in question and the six previous years.

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Corporate Taxes

Company Tax
22%
Tax Rate For Foreign Companies
Norwegian resident companies are taxed on their worldwide income, whereas non-resident companies are liable for corporate income tax when engaged in a business that is conducted in or managed from Norway.
Capital Gains Taxation
Capital gains derived from the sale of depreciable and non-depreciable business assets, immovable property and securities are included in income for corporate tax purposes and taxed at a flat rate of 22%.
Gains from the sale of securities are included in taxable income and are subject to an effective tax rate of 35.2%.
Gains resulting from real estate transactions are taxed, regardless of whether they are incurred in connection with business activity.
Main Allowable Deductions and Tax Credits
Ordinary business expenses are generally deductible: research expenditure, depreciation (it is mandatory to capitalise an asset that has a value of NOK 15,000 or higher and has an economic life of at least three years), social security payments, losses as well as interest and royalty payments. In general, start-up expenses are deductible, provided that the costs are borne by the company. Donations to certain charitable institutions are tax-deductible (capped at NOK 50,000 per year - lowered to NOK 25,000 from 2022). Royalties and service fees paid to related foreign companies are fully deductible if they meet the arm’s-length principle. Entertainment expenses and anticipated losses, as well as fines and penalties, are non-deductible. Real estate tax and foreign income and capital taxes paid are deductible from the corporate income. Bad debts are tax-deductible when they are clearly irrecoverable or realised and sufficiently connected to the business. Acquired goodwill may be amortised according to the declining-balance method at a maximum of 20% per annum.

Losses may be carried forward indefinitely. Carryback of losses is permitted for losses incurred in the year of ceasing business (up to two years).

Other Corporate Taxes
Other taxes include CO2 tax (calculated on petroleum that is flared and on natural gas emitted into the air and on installations used for production or transportation of petroleum), petroleum revenue tax, stamp duty on the deed of transfer of ownership (2.5%) and real estate tax (ranges from 0.1% to 0.7% of the estimated value of the property, generally lower than the market value, across municipalities). Social security contributions paid by the employer vary by region, from 0% to 14.1%. Specific rates (a maximum of 11.2%) apply to income from self-employment and remuneration for work performed by partners in partnerships.

Entities within the financial services sector are usually subject to a special payroll tax. The tax rate is 5% and shall be calculated on the wage base. The tax is payable by companies where the employees spend more than 30% of their time on VAT-exempt financial services.

Some institutional holders - including mutual insurance companies, taxable pension funds, self-owned finance institutions, savings banks, co-operatives, mortgage credit associations - pay a 0.25% net wealth tax.

In certain cases, an exit tax calculated by reference to the accrued but unrealised gains at the time of migration is levied at a rate of 22% upon the migration of assets or liabilities.

A NOK 0.013 per kWh natural resource tax applies to hydro power activities, based on one-seventh of the produced kWh for the income year in question and the six previous years.

Other Domestic Resources
Norwegian Tax Administration - Skatteetaten
Doing Business Website, Consult the Doing Business website to obtain a summary of Norwegian taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Norway OECD United States Germany
Number of Payments of Taxes per Year 5.0 10.1 10.6 9.0
Time Taken For Administrative Formalities (Hours) 79.0 163.6 175.0 218.0
Total Share of Taxes (% of Profit) 36.2 41.6 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Municipal and National Tax Rate on Net Income (general income) A combined municipal and national rate of 22% applies to net income
Personal Income Tax If an individual's gross income exceeds NOK 190,349 a year or gross NOK 15,862 a month, a progressive bracket tax is levied on top of the 22% income tax. The tax rates for the bracket tax 2022 range from 0% to 17.4%
Between NOK 0 and NOK 190,349 0%

Between NOK 190,350 and NOK 267,899

1.7%
Between NOK 267,900 and NOK 643,799 4%
Between NOK 643,800 and NOK 969,199 13.4%
Between NOK 969,199 and NOK 1,999,999 16.4%
Exceeding NOK 1,999,999 17.4%
Top marginal rate 39.4% (22% + 17.4%)
Allowable Deductions and Tax Credits
General business expenses, losses incurred from the sale of securities and interest paid on debts are deductible. A personal deduction of NOK 58,250 is allowed for municipal taxation purposes (known as "personfradrag"). Charitable contributions to certain non-profit organisations are deductible up to NOK 25,000. Union dues are also deductible (capped at NOK 5,800). Both employers' and employees' contributions to various pension schemes may be deductible when certain conditions are respected. A loss or deficit arising during a business activity is generally deductible from other income in the year in which it occurs.

As an alternative to deductions for actual expenses, an individual taxpayer may claim a standard deduction - called minimum deduction ("minstefradrag") - amounting to 46% of the basis, between a minimum of  NOK 4,000 and a maximum of NOK 109,850 (2022).

Special Expatriate Tax Regime
Residents are subject to taxation on worldwide income while non-residents are taxed on Norwegian-source income.
Generally, non-resident individuals are not entitled to a foreign tax credit.

A PAYE scheme applies to limited tax liable non-resident workers who have a salary below bracket tax level 3 (NOK 643,799 in FY 2022), with a flat 25% rate (including 8% social security contributions). Where PAYE applies, deductions are not applicable.
A special tax rate applies to foreign artists and athletes (15% - "Foreign Artist Tax Act"). Social security exemptions are also provided for qualifying foreign citizens with short-term employment in Norway.
Foreigners who become tax residents are entitled to a standard deduction of 10% of taxable salary, limited to NOK 40,000 for the first two tax assessments. In general, this standard deduction replaces all other deductions except the personal deduction and the minimum deduction. Please note that from 2019 this deduction is limited to foreign seafarers and shelf workers only.
For further details, refer to the Norwegian Tax Administration website.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of Tax conventions signed between Norway and other states.
Withholding Taxes
Dividends: 0% (resident companies and individuals)/25% (for distributions to shareholders resident in low-tax jurisdictions and to non-resident individuals); Interest: 0% (resident companies and individuals)/15% (on payments made to certain related companies domiciled in low-tax jurisdictions, from 1 July 2021); Royalties: 0% (resident companies and individuals)/15% (on payments made to certain related companies domiciled in low-tax jurisdictions, from 1 July 2021)
Bilateral Agreement
The United Kingdom and Norway are bound by a double taxation treaty.

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Latest Update: June 2022

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