Norway: Living There - Tax Issues

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Living There

INDIVIDUAL TAXATION

Residents are taxed on their worldwide income. An individual is deemed to be a resident if he spends more than 183 days in Norway in a 12-month period or more than 270 days during any 36-month period. Married persons are generally taxed jointly. They may, however, be taxed separately if the resulting tax liability is lower.

INCOME TAX

Residents in Norway are classified into two groups for taxation purposes. Single taxpayers are classified as Class 1, while taxpayers with dependants are classified as Class 2. Income tax is levied at a flat rate of 28%. This tax rate is composed of the state tax rate, levied at 12.2%, and the county and municipal tax rate, which is at 15.8%. Taxpayers in Class 1 are entitled to an allowance of NOK35,400 (€4,492), while those under Class 2 are entitled to NOK70,800 (€8,983), when calculating the state and county/municipal tax liability.

Surtax on Personal Income

Aside from the state and county/municipal taxes, residents are also liable to pay a surtax levied on personal income. This surtax is progressive.

Personal Allowances, Deductions and Credits

• Taxpayers who are at least 70 years of age are entitled to a special old-age allowance of NOK1,614 (€205) per month. Spouses and cohabitants are entitled to only one old-age allowance for both. Between the ages of 67 and 70, the allowance is given if the taxpayer receives a pension according to the Social Security Law. If the taxpayer receives a reduced pension, the allowance is reduced accordingly.
• Taxpayers receiving rehabilitation payments or a pension because their capacity for work is reduced are entitled to a full disability allowance of NOK1,614 (€205) per month.
• Taxpayers entitled to the old-age or full disability allowance, their general income does not exceed NOK95,300 (€12,092) for single taxpayers or NOK156,300 (€19,831) for married taxpayers are not liable to pay tax.
• Deductions for contributions made to institutions which carry out scientific research or vocational training in cooperation with the state, may be claimed. If the contribution amounts to more than NOK10,000 (€1,269), the deduction may not exceed 10% of the taxable income of the taxpayer in the year of the contribution.
• Deductions up to NOK12,000 (€1,523) may be claimed for contributions to certain non-profit organizations.
• Deductions can be made for interest payments.

Capital Gains

Capital gains are taxed as ordinary income, at 28%. Taxable capital gains are generally computed as the selling price, less acquisition costs, related expenses and depreciation. Gains from the sale of a taxpayer’s private residence are not taxable, provided that the taxpayer has owned the dwelling for more than 1 year, and lived there for at least 1 year within the 2-year period prior to disposal. Holiday houses are also exempt from capital gains tax if the taxpayer has owned them for more than 5 years and has used the property for at least 5 years in the 8-year period prior to selling the property.

Norway - more data and information

• Lawyers (attorneys) with property law practices in Norway

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