Norway - Tax Guide for Freelance Contractors
Welcome to our guide to Norwegian Taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in, Norway.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in Norway. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in Norway.
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Norwegian Income Tax
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Tax residents in Norway: are liable to pay tax on their worldwide income,
Non tax residents in Norway: are liable to pay tax on their Norwegian-source income only.
Individuals will be regarded as tax residents:
- if they stay in Norway and do not have the intention to stay only temporarily;
- a stay of at least 6 months is sufficient for the taxpayer to be considered a resident from the date of arrival even if the stay is only temporary;
Losing tax residence:
- a taxpayer is regarded as having terminated his/her residence only if he/she has established a permanent home in another state and is present in Norway for less than 61 days during the tax year;
- neither the taxpayer nor his/her spouse or dependent children may have a permanent home available in Norway.
A taxpayer who has been resident in Norway for 10 years or more before emigration will be regarded as being resident for 3 more years, starting on the date on which the above conditions are met.
Married couples are usually taxed jointly. If both spouses have income they can be taxed separately, though, at the request of either spouse.
All types of employment income, whether in cash or kind, are normally taxable.
Taxable remuneration in kind includes:
- free housing,
- free car,
- free travel.
Income tax rates for 2012:
The general combined rate of national and municipal income tax is 28% on all taxable income.
A further national income tax, called “top tax” or “surtax”, is levied on gross income:
- 9.00% on income between NOK 490'000and NOK 796'400,
- 12.00% on income above NOK 796'400.
Allowances and deductions for national and municipal income tax for 2012 include:
- a standard deduction (minimum allowance) to cover expenses connected with the generation of income, calculated on the basis of salaries and other types of income;
- for employees it is 38% of the base subject to a minimum of NOK 40'000 and a maximum of NOK 75'150.
The minimum allowance does not cover:
- additional expenses incurred while living away from home,
- travel expenses,
- child care expenses and alimony.
Such expenses can be claimed in addition to the minimum allowance, and in all events, the taxpayer may choose to claim a deduction for actual expenses if these are higher than the minimum allowance.
Jointly assessed married couples and single persons with dependents can benefit from a personal allowance of NOK 90’700.
For other persons the personal allowance is NOK 45’350.
- a special 10% deduction can be claimed by expatriates,staying less than 2 years in Norway; it is applicable to earned income for the national and municipal tax (not for the surtax which is levied on gross income);
- the maximum deduction is NOK 40’000 and replaces all other deductions except the minimum allowance and personal allowances.