Norway

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Tax Policy

TAX POLICY

Income Tax Rate – 28%

Corporate Tax Rate – 28%

Sales Tax / VAT Rate – 25%

Tax rates and limits - 2012

Personal Income Taxation

Net Wealth Tax – Increasing Threshold

Wealth tax

Municipality / State

NOK 0 - NOK 750,000

0 %

Municipality / State

NOK 750,000 -

1.1 %

Rates/Thresholds and Surtax

The maximum marginal tax rate for year 2011 taxable income remains unchanged.

Surtax on Personal Income (Toppskatt til staten)

The surtax is calculated on personal income above a certain amount. The following table illustrates the proposed changes to the income brackets for 2012. Year

Bracket 1 (NOK)

Bracket 2 (NOK)

Surtax Rates

9%

12%

2011

Over 471,200

Over 765,800

2012

Over 490,000

Over 796,400

National insurance contribution

Earned income

7.8 %

Pension income

4.7 %

Lower limit for paying national insurance contribution

NOK 39,600

Tax on ordinary income

Persons

28.0 %

Persons in Finnmark and Nord-Troms

24.5 %

Maximum marginal tax rates

Ordinary income

28.0 %

Pay

47.8 %

In Norway, it is up to each municipality to establish a tax on real property. Contact your local municipality to find out if you have to pay property tax.

Corporate taxation

A flat tax rate of 28 per cent applies to corporate taxable profits (ordinary income). The tax base is the sum of operating profit/loss, financial revenues and net capital gains minus tax depreciation.

As from 2005, the general rules for the timing of income and expenditure for tax purposes are no longer based on the accounting rules. Taxable income is recognized when it is earned and expenditure when it is incurred, according to the so-called realization principle.

The general regulations for tax-related depreciation are based on the declining balance depreciation method. An exception is hydroelectric power plants where linear depreciation schedules apply for certain fixed capital categories.

For tax depreciation purposes fixed assets are divided into 9 different categories according to the expected life of the assets. These are the following:

Depreciation categories

Maximum tax depreciation rate

a) Office equipment etc.

30 %

b) Acquired goodwill

20 %

c) Delivery, vehicles, lorries, trucks, buses etc.

20 %

d) Passenger vehicles, machinery, furniture and fixtures

20 %

e) Ships, vessels, rigs etc.

14 %

f) Aircrafts

12 %

g) Power lines and electro technical equipment in power plants

5%

h) Plant and equipment, hotels etc.

4(8) %

i) Commercial buildings

2 %

Double tax depreciation rates apply to assets category h when the expected total useful lifetime of the asset is no longer than 20 years. Depreciated asset values below NOK 15 000 are fully deductible from taxable profits. When assessing inventories, application of the First In – First Out (FIFO) principle is mandatory.

VAT Rate

The current Norway VAT (Value Added Tax) is 25.00%. The VAT is a sales tax that applies to the purchase of most goods and services, and must be collected and submitted by the merchant to the Norway governmental revenue department.
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Sources: https://www.nordisketax.net/main.asp?url=/files/nor/eng/i07.asp&s=&m=&w=
http://world.tax-rates.org/norway/sales-tax