Taxation in Oslo, Norway
What are the tax rates in Oslo, Norway? How are corporations taxed? Here’s Teleports overview of personal, corporate and other taxation topics in Oslo, Norway.
Personal taxation in Oslo
Effective personal income tax rate
| Annual income | $25,000 | $40,000 | $80,000 | $125,000 | $200,000 |
|---|---|---|---|---|---|
| Rate | 28% | 28% | 31% | 34% | 36% |
Teleport city rankings for personal income tax
Personal taxation puts Oslo in position 155 of all Teleport Cities.
Basis
All individuals domiciled or permanently resident in Norway are subject to Norwegian income tax on their worldwide income. Nonresidents are taxed on income received from real and personal property in Norway and on directors’ fees from Norwegian corporations. In addition, income from personal services carried out through private or public employment in Norway by nonresidents temporarily present in Norway, including persons sent to Norway by employment agencies, is taxable. Norway’s right to tax may be limited under an applicable tax treaty.
Residence
An individual becomes a permanent resident in Norway if he/she is present in Norway for a period exceeding 183 days during any 12-month period, or 270 days during any 36-month period. Individuals do not become resident during the first calendar year if the time spent in Norway in that year is less than 183 days.
Filing status
While spouses generally are taxed as individual taxpayers, if each spouse derives income, a separate assessment may be claimed. Separate assessment also is used if this results in a lower tax burden.
Rates
A combined municipal and national tax rate of 25% applies to net income. Income/loss due to ownership in companies and partnerships, such as gain on realization and distributions, is subject to a 1.15 multiplier before taxation; the effective tax rate is 28.75%
Deductions and allowances
Losses incurred on the sale of securities are fully deductible from taxable income. A standard deduction from ordinary income is available for incidental personal expenses of up to 43% of salary, subject to a minimum of NOK
Taxable income
Income tax liability is based on worldwide income, net of expenses (including interest paid) and foreign income taxes. Taxable income includes salaries; dividends, interest and royalties; income from real property and other capital; industrial, commercial and agricultural profits; and shares of partnership net income, whether or not withdrawn from the partnership.
Capital gains
Capital gains are taxed at 25%. Gains from the sale of real property used as a permanent residence are taxable if the taxpayer owned the property for less than one year (five years for a vacation home). Gains from the sale of securities are included in taxable income.
Other taxes on individuals
Real property tax
Municipal authorities levy "rates" on the occupation of real property. A property tax applies to the assessed value of real property, at rates ranging between 0.2% and 0.7%, depending on the location of the property. Some municipalities do not levy the tax.
Social security
A person resident or working in Norway is a compulsory insured "member" under the Norwegian National Insurance Scheme (NI-scheme). The NI-scheme is financed by contributions from its members, employers of members and the Norwegian state. Parliament sets the contribution rates annually. The employee’s contribution is 8.2% of gross income derived from employment. The employer’s contribution is differentiated regionally and ranges between 0% and 14.1%. Specific rates (a maximum of 11.4 %) apply to income from self-employment and remuneration for
Compliance for individuals
Penalties
Penalties normally are 30% or up to 60% of the tax that is, or could have been, avoided. Interest also can be charged.
Filing and payment
Tax payable on employment income is withheld at source by the employer. The deadline for tax return filing for individuals is 30 April following the year end.
Corporate taxation in Oslo
Teleport city rankings for corporate income tax
Corporate taxation puts Oslo in position 86 of all Teleport Cities.
Basis
Norwegian residents are taxable on worldwide income (unless income is exempt under an applicable tax treaty). Nonresidents are taxed only on Norwegian-source income. Branches are taxed in a manner similar to Norwegian limited companies, but only on Norwegian-source income.
Taxation of dividends
Dividends received by a Norwegian resident limited company from another Norwegian limited company or a limited company resident in the European Economic Area (EEA) are 97% exempt from tax, with the remaining 3% taxed at the ordinary rate of 25%. For dividends received from a company in a low-tax jurisdiction within the EEA, the 97% exemption applies only if real business activities are conducted in that jurisdiction.
Residence
Limited companies incorporated in Norway and foreign companies with their effective management and control in Norway are treated as resident in Norway.
Losses
Losses may be carried forward without limit. Liquidation losses may be carried back two years.
Incentives
Limited R&D credits are available.
Participation exemption
Capital gains derived by a Norwegian limited company on the disposal of shares in another Norwegian (or EEA resident) limited company are exempt from taxation. For gains realized on the disposal of shares in a company in a low-tax jurisdiction within the EEA, the exemption applies only if real business activities are conducted in that jurisdiction. Capital gains realized by a Norwegian limited company on shares in a company resident in a non-EEA country are exempt from taxation if at least 10% of the shares have been held for at least two years and the foreign company is not resident in a low-tax jurisdiction.
Foreign tax credit
Tax credits for foreign tax paid are available in two baskets: either low-tax or other. The maximum credit within each basket is limited to the lower of the foreign tax paid or 25% of the foreign-source income. Credit for underlying tax is available if a dividend is (fully) taxable in Norway and the Norwegian limited company has held at least 10% of the shares in the foreign payer for at least two years.
Taxable income
Corporate income tax is imposed on a company’s profits, which consist of business/trading income, passive income and capital gains (subject to an exemption for capital gains on shares). Normal business expenses may be deducted in computing taxable income.
Capital gains
Gains generally are taxable, subject to an exemption for capital gains on shares (see below under “Participation exemption”).
Holding company regime
There is no special regime, but the participation exemption is available for some dividends and capital gains.
Other taxes on corporations
Real property tax
Municipal authorities levy "rates" on the occupation of real property. A property tax applies to the assessed value of real property, at rates ranging between 0.2% and 0.7%, depending on the location of the property. Some municipalities do not levy the tax.
Social security
The employer’s contribution is differentiated regionally and ranges between 0% and 14.1%.
Other
Other taxes include petroleum revenue tax and tonnage tax.
Payroll tax
There is no payroll tax. The employer must withhold tax
Compliance for corporations
Consolidated returns
There are no provisions for consolidated returns, but Norwegian group companies may make group contributions.
Penalties
Penalties normally are 30% or up to 60% of the tax that is, or could have been, avoided. Interest also can be charged.
Rulings
The tax authorities may issue an advance ruling at the request of the taxpayer on the tax consequences of a specific future transaction.
Tax year
The tax year is the same as the accounting year, which normally is the calendar year.
Filing requirements
Advance payments of corporate taxes are due twice a year (on 15 February and 15 April in the year following the tax year). Any (remaining) shortfall is payable during the fall, normally in November. The tax authorities estimate the amount of the first two payments based on the previous year’s income. The last payment is based on a tax return, which companies must file by 31 March if filed in hard copy. Resident companies are allowed to file tax returns electronically by 31 May.
Other taxation in Oslo
Value added tax
Filing and payment
There are six filing and payment dates each year (every second month).
Rates
The standard rate is 25%; a lower rate of 15% applies for food and a 10% rate applies for passenger transport, hotel accommodation and cinema tickets. Certain transactions are zero- rated or exempt.
Taxable transactions
VAT applies at each stage of production and distribution to most goods and services, including royalties, advertising and hotel services.
Registration
Businesses with annual turnover above NOK 50,000 must register for VAT purposes.
Anti-avoidance rules
Controlled foreign companies
If at least 50% of the shares in the foreign company resident outside the EEA are held directly or indirectly by Norwegian resident taxpayers and the foreign company is effectively subject to less than 2/3 of the Norwegian tax on the same income, the foreign company is treated as a CFC unless Norway has entered into a tax treaty with the relevant country and the income is not of a mainly passive nature. The same conditions apply to companies resident in an EEA country, except that the foreign company will not be a CFC if real business activities are carried out in the relevant jurisdiction.
Transfer pricing
In principle, intercompany transactions are acceptable for tax purposes if they are based on the arm’s length principle. Documentation requirements apply.
Thin capitalization
Interest on related party debt generally may be deducted to the extent the interest does not exceed 25% of adjusted EBITDA.
Other
There is no general anti-avoidance provision in the legislation, but a doctrine has developed under which a transaction may be disregarded for tax purposes if the transaction has no, or only minor, consequences other than the reduction of tax, and the result of respecting the transaction would be contrary to the basic policy of the tax provision in question.
Investment basics
Accounting principles/financial statements
Norwegian GAAP and IFRS. Statutory accounts must be prepared annually.
Principal business entities
These are the public and private limited company (ASA/AS), limited partnership (KS), general partnership (ANS), branch of foreign company (NUF) and individual enterprise.
Withholding tax
Dividends
No withholding tax is imposed on dividends paid by a Norwegian limited company to an EEA resident corporate shareholder, provided the shareholder conducts a real business activity in the relevant jurisdiction. Otherwise, the applicable tax treaty rate will apply. Distributions to shareholders resident outside the EEA are subject to a 25% withholding tax, unless the rate is reduced under a treaty.
Technical service fees
Norway does not levy withholding tax on technical service fees.
Interest
Norway does not levy withholding tax on interest payments.
Royalties
Norway does not levy withholding tax on royalty payments.
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