The total tax revenue – the sum of direct and indirect taxes, duties and excise – amounts to 42.4% of the Gross Domestic Product (GDP), higher than the EU average (40.6%) and the UK (35.3%), but lower than first-place Sweden (50.8%) and four other countries – Denmark, Belgium, Finland and France.

Capital gains tax (Gevinstskatt)

For companies as well as for private persons holding shares, gains (gevinst) realised upon sale of shares are subject to the 28% capital gains tax. Likewise, losses (tap) are deductible on tax returns. The gain or loss in a sale is in principle equal to the difference between the initial cost of the shares, including fees, and the price upon sale.

However, in some cases, gains could be taxed twice. Consider investors who chose the general partnership form to found a company with the required minimum share capital of NOK 100,000. In its first year, the company does well and declares a profit of NOK 100,000, which is taxed at 28%. The company then is worth NOK 172,000. Suppose that the investors then elect to sell their shares to others, who are willing to pay NOK 172,000. On paper, the original investors have realised a gain of NOK 72,000, the difference between the selling price and their original investment. But if that gain is taxed, the money that created it has been taxed twice.

Fortunately, there’s a provision that prevents such double taxation. It is called RISK, the abbreviation for Regulering av aksjens Inngangsverdi med Skattelagt kapital (“adjustment of the cost price of taxed capital”) and applies only to shares held in Norwegian companies. The effect of RISK computation is to adjust the original cost of shares by the net change in a company’s taxed capital, for the period of time that the shares are held. After closing their accounts for a tax year, usually in the autumn of the following year, companies having shares perform their RISK calculations and notify their shareholders of the RISK amount per share (RISK-beløp pr. aksje), which is valid for the calendar year after the tax year for which it was computed. Shareholders then use the RISK amount per share in computing gains or losses from any sales of shares to enter in their tax returns (selvangivelser). This means that unrealised gains are not taxed and unrealised losses cannot be deducted.

Customs and Excise (Tollvesenet)

Norwegian Customs and Excise collects duties and excises, acts to prevent the illegal import and export of goods and combats drug trafficking and economic crime. It comprises the central Directorate of Customs and Excise (Toll og Avgiftsdirektoratet) and the Regional Customs Administration (Distriktsforvaltning), which serves the public through 11 Customs Regions (Tolldistrikter), 34 Customs Offices (Tollsteder) and 10 Anti-smuggling and/or Customs Clearance Units (Ekspedisjons – eller kontrollenheter). You may call the nearest office, listed under tollvesenet in the Pink Pages for information and advice on customs matters, or visit the central website at www.toll.no. Common queries include:

• car import (Chapter 4)
• customs regulations in 15 countries with which Norway has agreements
• EU and EFTA forms and regulations
• excise
• import and export regulations and procedures
• pet import (Chapter 35)
• plant import (Chapter 24).

Customs import taxation (Avgift ved innførsel)

Customs taxes are payable on goods from other countries. If you import goods from abroad, such as by mail order from abroad (Chapter 40), you will be charged customs when you collect the goods, such as a package at a post office. The total customs taxation on an item consists of three parts: import duty (toll), special duty (særavgift) and value-added tax (MVA).

Import duty (toll) usually is based on the declared value (tollverdi) at the point of import, but for some goods is based on weight.

Special duties and other duties and fees (særavgifter og andre avgifter/gebyrer) are charged on selected categories of goods including alcohol in essences (alkohol i essenser), batteries (batterier), beer (øl), boat motors (båtmotorer), cassettes for sound and video recording (uinnspilte kassettbånd), chocolate and sweets (sjokolade- og sukkervarer), coal and coke (kull og koks), foodstuffs (næringsmiddel), liquor and wine (brennevin og vin), lubricants (smøreolje), motor vehicles (motorvogner) (car import, Chapter 4), packaging for drinks (emballasje til drikkevarer), petrol and diesel (Chapter 4), petroleum products (mineralolje), plants and parts of plants (planter og plantedeler) (plant import, Chapter 24), radio and TV receivers and accessories (radio- og fjernsynsmateriell), soft drinks (alkoholfrie drikkevarer), sugar (sukker), tobacco products (tobakkvarer) and tyres (dekk).

Value-added tax (MVA) is charged, with few exceptions, on all imported goods. As a general rule, the exceptions include goods exempt from MVA within the country, such as books for private use and not to be resold.

For rates and other details, contact the nearest customs office (tollsted) listed under tollvesenet in the Pink Pages, or visit the customs website at www.toll.no.

Document duty (Dokumentavgift)

Document duty is imposed on registrations of property transactions by the city recorder or district recorder (Chapter 38). It is equivalent to the stamp duty in the UK and the transfer tax in the USA, and is charged at 2.5% of the sale price of the property registered.

Excise (Avgift)

Excise is a tax levied on goods or services within the country of origin or on certain licences, including air travel (avgift på flyging), beer (øl), carbonated soft drinks (kullsyreholdige, alkoholfrie drikkevarer), chocolate and sweets (sjokolade og sukkervarer), coal and coke (kull og koks), diesel fuels for motor vehicles (autodiesel), electric energy consumption (elektrisk kraft), heavy motor vehicles annual weight fees (vektårsavgift), initial motor vehicle registration (engangsavgift på motorvogner) as upon car import (Chapter 4), liquor and wine (brennevin og vin), lubricants (smøreoljer), motor vehicle annual licence fees (årsavgift), motor vehicle re-registration (omregistering), motor vehicles built in Norway (motorvogen bygd opp her i landet), non-carbonated soft drinks (kullsyriefrie, alkoholfrie drikkevarer), petrol (bensin), petroleum products (mineralolje), radio and TV receivers and accessories (radio- og fjernsynsmateriell), recordable audio/video cassettetes (kassetter), refuse processing and tipping (sluttbehandling av avfall), sugar (sukker) and tobacco products (tobakkvarer).

Foreign tax affairs (Skatt – utenlandssaker)

In principle, you are subject to taxation as soon as you start earning income in Norway, regardless of your citizenship. However, Norway has tax treaties with more than 80 countries, principally for the avoidance of double taxation and to prevent tax evasion. Consequently, the taxation of your income may depend on various circumstances, such as the length of your stay in Norway, whether your employer is a foreign company and whether you have a permanent home in Norway. In short, your tax status depends on the particular tax treaty between Norway and the country in which you are or were a resident before arriving in Norway, as well as the particular circumstances in your case. However, in general, income from employment will in most cases be taxable in Norway if your stay exceeds 183 days during a 12-month period or a calendar year. The tax treaties are available in Norwegian and English editions, as well as French and Spanish editions for some countries. A list of the treaties is available at www.finans.dep.no in Norwegian (click on “skatteavtaler” under “skatter/avgifter”) and in English (click on “tax treaties” under “taxes”). The treaties are available in print from the Government Administration Services (Statens forvaltningstjeneste) information and press centre in downtown Oslo; Møllergt 17, 0179 Oslo, Tel: 22545055, Fax: 22249520, pressesenteret@ft.dep.no.

Income tax (Inntektsskatt)

Personal income taxes are calculated from two tax bases: ordinary income and personal income.

Ordinary income (alminnelig innttekt) is a net income tax base and is equal to the total income from employment, pensions and all types of capital income, less tax deductions (fradrag). The principal deductions are tax-deductible interest on debts and a basic tax allowance on employment and pension income, excluding self-employment income. Moreover, travel expenses to and from work in excess of NOK 9,200, trade union fees, documented expenses for child-care and other legitimate expenses are deductible. A class allowance (klassefradrag) is deducted according to the class to which the taxpayer belongs.

Personal income (personinntekt) is a gross income tax base and is equal to the sum of gross employment and pension income, from which social security taxes and surtax are calculated. Employment income is a broad term that is defined as the sum of wages, income from self-employment that is related to labour input and fringe benefits such as company cars, free phone, free stock options and the like.

There are two tax categories, Class 1, mostly for single people, and Class 2, principally for joint tax returns. Married couples may elect to file separately in Class 1 or be taxed jointly in Class 2, whichever results in the lowest total tax. Couples with one income usually elect Class 2, whilst couples with two incomes usually file two Class 1 returns. Single parents are taxed in Class 2. The principal tax differences between the categories are that in Class 2, the class allowance is twice the amount allowed in Class 1, so surtax thresholds are higher.

The marginal tax on employment income is currently 55.3%. Taxpayers living in the northernmost two counties, Nord-Troms and Finnmark, are generally taxed at lower rates and enjoy higher surtax thresholds.

Wealth, or estate tax, is generally paid on net worth minus a standard deduction. It is paid at the municipal level, now 0.7%, and at the national level, now 0.4%.

Pre-filled-in (forhåndsutfyllt) tax returns (selvangivelser) are due 30 April, and paper tax forms are due 31 March. Taxes are then computed, and taxpayers notified within five to six months, usually in September.

MVA

MVA is the abbreviation for merverdiavgift, the country’s value-added tax (VAT) of 25%. It is imposed on businesses at each stage of production or turnover of goods and services. It applies mostly to turnover (omsetning), so it is sometimes called moms, which is the abbreviation of meromsetningsavgift the Danish word for VAT. Stated prices include MVA. For instance, if the pre-tax retail price of an item is NOK 50, its listed price in a shop will be NOK 62.50, which is NOK 50 plus 25% of NOK 50. When you buy an item costing NOK 62.50, you can compute the MVA by taking 20% of NOK 62.50, which is NOK 12.50.

MVA always applies to final prices. So if you order an item from a catalogue, MVA will be charged on the total of its price plus packing and shipping charges. By international agreements preventing double taxation, MVA is not collected on exports. But it is collected on imports and applies to the total cost of an import, including all customs duties. Some goods and services are exempted from MVA, including:

• art sold by the artist or the artist’s agent
• articles, new and used, sold by charities
• bank safe-deposit box rentals
• books, newspapers and some magazines sold by retail
• film rights, except advertising films
• medical and dental care
• used cars.

The Revenue Service (Skatteetaten)

The Revenue Service collects taxes and other duties and provides other services, including the National Register (Chapter 38). As an individual taxpayer, you principally will be concerned with the National Register (Chapter 38) and with the local tax office (Likningskontor) in connection with your income tax. If you are a citizen of a foreign country, you may be concerned with foreign tax affairs. For further information on The Revenue Service and on taxes, contact a local tax office or visit the central website at www.skatteetaten.no.

Tax card (Skattekort)

Employers are obliged to withhold taxes from salaries and wages paid. So once you have a job, you should request the tax details from your employer and apply for a tax card (skattekort) at the local tax office (likningskontoret). When you receive the tax card, you should give it to your employer, as it states the percentage tax to be withheld. If you start work without a tax card, your employer is required to withhold 50% tax.

The Taxpayers Association (Skattebetalerforening)

The Taxpayers Association is an independent public watchdog and consultant in tax and duty matters. It has a staff of six tax lawyers, two tax consultants and eight others at its headquarters in Oslo, and serves 24,000 individual and company members. It publishes a magazine, Skattebetaleren (“the taxpayer”), two yearly guides to income tax returns, Skatte-nøkkelen (“tax key”) for personal income taxpayers, as well as other guides for businesses and various tax matters. For further details, contact Skattebetalerforening, Øvre Vollgt 13, PO Box 213, 0130 Oslo, Tel: 22420727, Fax: 22337180, www.skatt.no, post@skatt.no.