Norway
ey.com/globaltaxguides
Oslo GMT +1
EY
Street address:
Mail address: Oslo Atrium
P.O. Box 1156 Sentrum Stortorvet 7 N-0155 Oslo 0155 Oslo Norway Norway
Executive contacts
Pål André Johansen +47 98-20-62-95
Email: pal.a.johansen@no.ey.com
Trond Olsen +47 90-82-34-52
Email: trond.olsen@no.ey.com
Helen Christensen +47 51-70-66-52 (resident in Stavanger)
Email: helen.christensen@no.ey.com
Immigration contact
Yngvild Valvik +47 90-09-09-64
Email: yngvild.valvik@no.ey.com
A. Income tax
Who is liable. Individuals resident in Norway are subject to tax on their worldwide income. Nonresidents are taxable on Norwegiansourced income only. Wages and remuneration may be considered Norwegian-sourced even if an employer has no permanent establishment in Norway.
Individuals present for a period or periods exceeding in aggregate 183 days in any 12-month period or 270 days in any 36-month period are considered to be residents for tax purposes. After emigrating from Norway, an individual continues to be considered a resident for tax purposes if the individual, or someone closely related to him or her, maintains a home in Norway. After emigrating from Norway, an individual who does not maintain a home in Norway is considered to be a resident if the individual stays in Norway for more than 61 days per income year.
Notwithstanding the conditions mentioned above, an individual who has been resident in Norway for more than 10 years is considered to be resident for tax purposes in the three-year period after emigration and for as long as he or she maintains a home in Norway or stays in Norway for more than 61 days during a year.
Special rules may apply to individuals working on the Norwegian Continental Shelf.
Income subject to tax. The taxation of various types of income is described below.
Employment income. Taxable income generally includes salaries and wages, bonuses, directors’ fees, benefits in kind, annuities and pensions, whether the benefit is earned over a period of time, occasionally or on a single occasion. Most allowances and fringe benefits are considered taxable income.
Taxation of employer-provided stock options. Stock options provided by employers to employees are taxed at the date of exercise as income from employment.
The taxable value at the date of exercise is the fair market value of the shares at the date of exercise, less the exercise price and any other costs incurred by the employee related to the grant of the options or the conversion of the options to shares.
Capital gains and losses. Capital gains derived from disposals of business assets, including real property, are subject to ordinary income tax at a rate of 22%.
Capital gains from the disposal of shares are multiplied by an adjustment factor of 1.72 (2024 rate), and the adjusted basis is then taxed as ordinary income at a rate of 22%. As a result, the effective tax rate for capital gains from the disposal of shares is 37.84%.
Capital losses derived from disposals of shares are deductible against ordinary income (22%). However, the taxable gain may be reduced by any unused tax-free amount with respect to dividends received (see Investment income).
The gain derived from the sale of a personal residence is not subject to tax if the owner lived in the residence for at least 12 months during the 24 months before the sale. Otherwise, the gain derived from the sale of a private residence is subject to ordinary income tax, and losses are deductible from ordinary income.
Nonresidents are taxed on capital gains from capital assets located in Norway only.
Exit tax. Norway imposes an exit tax on unrealized profits on shares or share units in Norwegian or foreign companies, including units in securities funds and stock options. The exit tax applies only to profit exceeding NOK500,000.
Individuals who have been resident in Norway for tax purposes are taxed on profits as if the shares, units, options and similar instruments were realized on the last day the individual was considered a tax resident of Norway for either domestic or tax treaty purposes. The deemed gain after an adjustment of 1.72 is subject to capital gains tax at the normal rate of 22%.
For individuals who have resided in Norway for more than 10 years or were born in Norway, the profit is calculated as the spread between the original cost price of the asset and the market value at the time of emigration. However, individuals who have resided in Norway for less than 10 years may choose to use the market price at the time he or she became tax resident in Norway instead of the actual cost basis. However, this rule applies only to shares and share units owned by the individual when he or she took up residence in Norway.
Effective from 29 November 2022, the rule to cease exit tax if gains were not realized within five years after emigrating from Norway no longer applies. It is not possible to cease exit tax; it is only possible to defer the payment under certain conditions. The new rules also apply if such assets are transferred to family members living abroad.
It is possible to defer the payment of the exit tax until actual realization of gain takes place. To achieve this deferral, the taxpayer needs to furnish adequate security for the payment obligation or move to a state within the EEA with which Norway has entered into an agreement for the exchange of information and assistance with recovery of taxes.
Deemed losses on emigration are also calculated using the same rules, and any loss is offset against gains chargeable at the capital gains rate of 37.84%. However, the loss may be excluded on emigration outside the EEA, and no loss is granted as a result of step-up of the historic cost price.
In general, strict documentation requirements apply at the time of emigration and for the following income years if the taxpayer chooses to defer the payment. If the deemed profit is less than NOK500,000 and, consequently, no exit tax applies, the taxpayer is still required to report the unrealized profit to the Norwegian tax authorities.
Changes to the exit tax are suggested in the 2025 Fiscal Budget with effect from 20 March 2024; however, the outcome is uncertain. There is an ongoing debate in the parliament, and the final budget must be accepted by the parliament by 15 December 2024.
New legislation implies exit tax being payable within a 12-year period, either by 1/12-part annually or all after 12 years. The exit tax is abolished if the individual moves back to Norway within 12 years. Exit tax applies only for a latent gain (an unrealized capital gain or profit on shares or other financial instruments) above NOK3 million. There are separate regulations if dividends on shares and other instruments subject to exit tax are distributed with exit tax then being payable.
The exit tax is complicated and changes regularly; therefore, a case-by-case evaluation is required.
Deductions
Deductible expenses. A 10% standard deduction can be claimed by foreign seafarers and shelf workers because they cannot be included in the new regime for foreign workers (see Optional simplified tax regime for foreign workers).
Personal allowances. In calculating ordinary income tax for 2024, individuals are allowed a standard minimum allowance of 46% of gross compensation, with a maximum of NOK104,450. This allowance is reduced proportionately if the individual is taxable in Norway for only part of the fiscal year.
Business deductions. To be deductible for tax purposes, items must be included in the statutory financial statements. In principle, all expenses for earning, securing or maintaining income, with the exception of gifts and entertainment expenses, are deductible. Valuation and depreciation rules for individuals earning self-employment or business income are the same as those for corporations.
Rates
Personal income tax. Personal income tax (step tax) is levied on income from employment and pensions, and no deductions are
allowed. The step tax rates for 2024 are set forth in the following table.
Ordinary income tax. A 22% ordinary income tax (county municipal tax, municipal tax and state tax) is levied on taxable net income from all sources after taxable income is reduced by NOK88,250 for individuals both with and without dependents. The personal allowance in tax Class 2 for individuals with dependents was terminated from 1 January 2018.
If an individual is taxable in Norway for part of a fiscal year only, the income brackets and excludable amounts are reduced proportionately.
Relief for losses. In general, losses may be carried forward for 10 years.
B. Other taxes
Wealth tax. A municipal and national wealth tax is levied at a rate of 0.7% on taxable net assets exceeding NOK1.7 million. An additional 0.3% is levied for taxable net assets between the values of NOK1.7 million and NOK20 million. This levy rises to 0.4% for taxable net assets exceeding NOK20 million.
Inheritance and gift taxes. Effective from 1 January 2014, inheritance and gift taxes no longer apply in Norway.
C. Social security
Contributions. Employers and employees, as well as selfemployed individuals, must make social security contributions. Contributions are payable on all taxable salaries, wages and allowances and, for self-employed individuals, on personal income.
For employees, contributions are withheld by employers together with income tax, and the total amount is paid to the tax authorities. Employers’ contributions, payable bimonthly, are deductible for income tax purposes. Employees’ and self-employed individuals’ contributions are not deductible. The 2024 contribution rates are 7.8% of salary for employees and 11% for self-employed individuals. For 2024, the employer’s contribution is 14.1%. In certain municipalities, the employer rate is lower.
An additional employer’s contribution was introduced from 1 January 2023. In 2024, an additional employer’s contribution of 5% is applied for employees with salary income exceeding NOK85,000. The additional employer’s contribution is proposed to be discontinued from 1 January 2025.
Expatriates and foreign employers of employees working in Norway are subject to these contributions if an exemption (or reduction) is not available under a social security convention
between Norway and the country where the expatriate or the employer is domiciled.
Totalization agreements. To provide relief from double social security taxes and to assure benefit coverage, Norway has entered into social security agreements with the following jurisdictions.
Australia
Austria (a)
Belgium (a)
Bosnia and
Herzegovina
Bulgaria (a)
Canada (b)
France (a)
Germany (a)
Greece (a)
Hungary (a)
Iceland (a)
India
Ireland (a)
Chile Israel
Croatia
Cyprus (a)
Czech
Republic (a)
Denmark (a)
Estonia (a)
Finland (a)
Italy (a)
Latvia (a)
Liechtenstein (a)
Lithuania (a)
Luxembourg (a)
Malta (a)
Netherlands (a)
Poland (a)
Portugal (a)
Romania (a)
Serbia and
Montenegro
Slovak
Republic (a)
Slovenia (a)
Spain (a)
Sweden (a)
Switzerland
Türkiye
United
Kingdom (c)
United States
(a) EEA countries’ agreement. European Union (EU) Regulation 883/2004 was implemented 1 June 2012 in Norway.
(b) Separate agreement with Quebec.
(c) New agreement effective from 1 January 2024.
D. Tax filing and payment procedures
Income tax and wealth tax on net taxable assets are assessed for a fiscal year ending 31 December. For most individuals resident in Norway who do not have trading income, annual tax returns must be submitted by 30 April in the year following the income year. An extension of one month may normally be obtained. For self-employed individuals, annual tax returns filed electronically must be submitted by 31 May.
Individuals who are self-employed or who have income from sources other than salaries, wages and similar compensation, receive from the tax authorities an individual estimate of taxes to be paid during the tax year. These estimated taxes are due in four equal installments on 15 March, 15 June, 15 September and 15 December. Assessments have normally been made in the third quarter of the year following the income year. Beginning with 2011, the Norwegian authorities announce the assessments in four different months. An individual may receive an assessment in June, August, September or October. At the time of assessment, an individual receives a tax computation showing total assessed taxes compared to taxes paid. Any amount of tax overpaid is refunded to the taxpayer, and any tax due is payable in two equal installments.
Taxes are withheld by employers from salaries, wages and other remuneration paid to employees. Nonresident employees who do not provide their employers their tax-deduction cards issued by the tax authorities are subject to 50% withholding. Employees who present their tax-deduction cards are eligible for the reduced rate specified in the cards. The withholding taxes are preliminary
payments and are credited to the taxpayers in their tax assessments.
Individuals who are part of the simplified tax regime are not required to file an annual individual tax return.
E. Tax treaties
Norway’s double tax treaties generally follow the Organisation for Economic Co-operation and Development (OECD) model. Norway has entered into double tax treaties with the following jurisdictions.
Albania Greenland Portugal
Argentina Hungary Qatar
Australia Iceland Romania
Austria India Russian Federation
Azerbaijan Indonesia Senegal
Bangladesh Ireland Serbia
Barbados Israel Sierra Leone
Belgium Italy Singapore
Benin Jamaica Slovak Republic
Bosnia and Japan Slovenia
Herzegovina Kazakhstan South Africa
Brazil Kenya Spain
Bulgaria Korea (South) Sri Lanka
Canada Latvia Sweden
Chile Lithuania Switzerland
China Mainland Luxembourg Tanzania
Côte d’Ivoire Malawi Thailand
Croatia Malaysia Trinidad and Cyprus Malta Tobago
Czech Republic Mexico Tunisia
Denmark Morocco Türkiye
Egypt Nepal Uganda
Estonia Netherlands Ukraine
Faroe Islands Netherlands United Kingdom
Finland Antilles United States
France New Zealand Venezuela
Gambia Pakistan Vietnam
Germany Philippines Zambia
Greece Poland Zimbabwe
F. Immigration regulations
All foreign nationals, except EEA nationals, are required to obtain a work permit before entering the country. Entrance for short-term visits, tourist visits, family visits, business trips and certain other purposes for a duration up to three months is allowed in accordance with the applicable visa.
All foreign nationals (except Nordic nationals) who wish to enter Norway must also carry valid passports or other identification officially recognized as valid travel documents.
Norway entered into the Schengen Agreement on 25 March 2001. Under the agreement, no passport controls apply to pass borders within the Schengen area. Passport controls will apply to pass the Schengen area’s outer border, both to enter and depart the area. Non-EEA nationals are subject to extended controls, that is, a
search of the Schengen Information System to determine whether the individual is registered with a denial to enter. As a general rule, under the agreement, visas issued by Norwegian authorities are valid to enter the entire Schengen area. Likewise, visas issued by other Schengen countries are valid to enter Norway.
Norway has visa-free arrangements for short-term visitors with 63 jurisdictions, in addition to all of the EU/EEA countries. Citizens of these countries are not required to obtain visas to enter Norway for short-term visits. Other exceptions to the visa requirement may exist. For further details, contact a Norwegian Foreign Service mission or the Directorate of Immigration (UDI).
A new practice from the Norwegian authorities allows for some remote work activities for non-EEA nationals who are visiting Norway. For example, individuals can check and answer emails, make telephone calls, and participate in digital meetings. It is a prerequisite that the remote work is not the main purpose of a person’s stay and that the remote work does not create value in Norway or is connected to Norway. Individuals cannot perform remote work for an employer or client in Norway, nor can they perform remote work as part of running a business in Norway.
G. Work permits
Foreign nationals for whom a visa is required must apply for a visa or residence permit in order to stay or work in Norway for any length of time. Once the permit a granted, visa-required nationals will also be issued an entry visa.
Residence permits are granted only if a particular reason for living or working in Norway exists, such as a work assignment, a trainee assignment, cultural exchange or family immigration. Any person who applies for a work permit must receive a concrete offer of employment in advance. The applicant must also have adequate income.
Nordic citizens do not need a residence permit to reside or work in Norway.
EU/EEA nationals do not need to apply for residence permits in Norway. They can do an advance registration online and attend an appointment with the authorities in person on arrival in Norway. EU/EEA nationals need to register in Norway only if they intend to work and stay in Norway for more than three months.
Work permit application process. The residence permit application must generally be submitted from abroad before an individual enters Norway. An application can also be submitted through a power of attorney by a third party in Norway. A first-time work permit must be granted before entry. However, for individuals holding a legal immigration status in Norway, such as visa-free travelers and skilled workers, a residence permit application can be submitted after entry. If they apply in Norway, they can submit the application either to the police district where they live or at a service center for foreign workers.
Prior to submission, all applications must be registered through the Application Portal, and the relevant documents can be uploaded electronically to the immigration authorities. The