TAX RETURN IN NORWAY

TAX RETURN IN NORWAY

In Norway, the obligation to settle tax with the tax authorities applies to entrepreneurs and persons living and working in Norway. If you do not submit your annual tax return in time, the tax office will calculate your tax without taking into account any allowances you may be entitled to, which is why it is so important to settle your tax with the Norwegian tax office on time and correctly. On this page we have compiled detailed information about the entire process of submitting your tax return and the reliefs you may be eligible for when settling your tax return with the Skatteetaten.

TYPES OF SETTLEMENTS

[Infographics] [TYPES OF ALLOWANCES

  • pendler,
  • ordinary settlement,
  • standardfradag.

The standardfradag has been abolished in 2019!]

Norwegian entrepreneurs and employees are required to file an annual tax return. When settling the tax return with the tax authorities, you may be entitled to deductions that reduce the tax base – the deduction of the indicated costs requires that the documents proving the necessity of the costs are attached to the return submitted by the deadline.

ANNUAL ACCOUNTING - DEADLINES

[Infographics] [BY WHEN SHOULD I SUBSCRIBE?

  • private individuals: by 30 April,
  • entrepreneurs: by 31 May]

Skatteetaten has set deadlines within which the annual tax return must be submitted. Norwegian entrepreneurs have until 31 May, while employees have until 30 April. In order to be entitled to deductions, it is necessary to meet the deadlines – otherwise, the office will automatically calculate the tax due for the taxpayer, without taking into account any allowances, which means that the office’s calculations will exceed the minimum necessary, and the taxpayer will not be able to appeal against the result of the return, due to failure to submit the return in time.

In addition to the lack of relief and the possibility of filing a clage, a settlement by the office also means a longer waiting time for a tax refund (which can be delayed by up to six months). In such a situation, it is advisable to provide the relevant tax office with a letter justifying the delay in the settlement.

Settling your tax via Altinn.no is more advantageous than submitting your tax return directly to the tax office, as electronic tax returns are usually processed first and refunds of overpaid tax can be paid as early as June.

Skattemelding is a preliminary return sent by the office, the correctness of which should be verified by the taxpayer - if changes need to be made, this can be done on the form received or via the Altinn portal.

TYPES OF SETTLEMENT DOCUMENTS

A correct settlement with the Norwegian tax authorities requires the collection of a number of documents confirming earned income, on the basis of which the amount of tax to be refunded or paid is determined.

The annual return is accompanied by copies of the indicated documents with the taxpayer’s signature and personal number. Completing the documents can be time-consuming – waiting times for issuance or translation are sometimes as long as several weeks – so it is advisable to deal with this issue well in advance.

The specific requirements for the documents that accompany the tax return depend on the allowances and related deductions the taxpayer intends to make. The Norwegian tax return may include deductions for e.g. housing costs or interest on loans. When claiming tax deductions, it is important to remember to provide documents proving the right to deductions, e.g.: rent and electricity bills, airline tickets or nursery school fees. 

[Infographics] [WHAT DOCUMENTS MUST BE INCLUDED IN THE TAX RETURN?

  • Sammenstilling,
  • Skattemelding,
  • Årsoppgave.]

Sammenstiling, which is a statement of annual wages and paid bills that every employee should receive in January. The employer should provide the employee each month with information on the amount of wages and tax deducted therefrom. Selvangivelse, which is the preliminary statement that the Norwegian office sends out, and årsoppgave, which is the information sent out by the bank about the taxpayer’s account balance.

APPEAL - KLAGE

In the event of any irregularities in the preliminary return sent out by Skatteetaten, the person who has submitted the return by the deadline has the right to appeal against the result of the tax office's calculations.

The Klage, or appeal, should be submitted within six weeks of receiving the letter from the office – this can be done via Altinn.no or directly to the relevant tax office that issued the Skattemelding. An appeal submitted within the deadline should be processed within three months.

A klage submitted before the expiry of twelve months from the date of receipt of the initial return (Skattemelding) will normally be considered favourably, but after this time, the tax office is not obliged to consider the application – the Skatteetaten’s decision is mainly influenced by the circumstances by which the clage was submitted late and the type of error shown, together with the taxpayer’s arguments. It is crucial that the klage is submitted with correctly documented changes that will leave no doubt as to the legitimacy of the appeal against the earlier calculations.

Incorrectly calculated tax must be paid! Failure to pay will incur interest for the period waiting for the authority's decision on the appeal. If the application is decided in favour of the taxpayer, the office will reissue the return and refund the overpaid tax.

KILDESKATT

[Infographics] [KILDESKATT

  • foreign employees (who are not Norwegian tax residents),
  • foreign employees (in the year of residence),
  • permanent residents abroad receiving styrehonorar or other benefits from Norwegian companies].

Kildeskatt is a form of taxation that taxes arbeidsinntekt, i.e. the labour income of foreign employees. Kildeskatt is 25 per cent of the salary earned in Norway (including 8.2 per cent Trygdeavgift).

The tax payer is the Norwegian employer who, when paying the employee’s salary, automatically deducts 25% of the tax paid to the authorities.

With Kildeskatt, there is no obligation to file an annual tax return, which in turn means that no deductions can be made. When settling with the Kildeskatt, it is possible to recover the tax refund after submitting the appropriate form to the tax office.

The Kildeskatt does not apply to:

– self-employed workers,

– seafarers,

– employees with an income higher than NOK 639,750 in 2020,

– persons with income from state salary, rental of movable and immovable property, running a business, income earned on Norwegian ships outside Norway, income earned on the Norwegian continental shelf, income subject to Norwegian Trygdeavgift, untaxed income according to tax treaties.

Running a joint-stock company means that the shareholders' assets are separate from the company's assets - Aksjeselskap's liabilities are only collected up to the company's share capital.

RELIEF FOR FISHERMEN AND SEAFARERS

A special relief for Norwegian fishermen and seafarers – Særskilt fradrag – allows a deduction of 30 per cent of earned income from the tax base. The relief is available to fishermen and seafarers who have been on board a vessel for a minimum of 130 days in a calendar year. The deduction limit for the Særskilt fradrag relief is: – up to NOK 80,000 for seafarers, – up to NOK 150,000 for fishermen (up to NOK 80,000 from the navy and up to NOK 70,000 from fishing). Særskilt fradrag relief may be combined with other deductions to which you are entitled.

ORDINARY SETTLEMENT

[Infographics] [Ordinary settlement

  • Permanent residence in Norway,
  • no possibility to benefit from the 10% allowance,
  • no Pendler status].

Ordinary settlement in Norway applies to persons who are not eligible for other deductions.

[Infographics] [DEDUCTIONS RELATING TO ORDINARY SETTLEMENT:

  • tax-free amount,
  • childcare costs (kindergarten, day care),
  • commuting costs,
  • interest on loans taken out].

Required documents:

– statement of annual wages and expenses paid (Sammenstilling),

– pre-settlement statement (Skattemelding),

– statement of account (årsoppgave),

– confirmation from school/pre-school,

– confirmation from the bank/institution where you have taken out loans,

– confirmation from the institution where you have securities, deposit.

PENDLER STATUS

Pendler status can be obtained by persons who, while working or operating in Norway, regularly (at least once a year) visit family in their home country.

According to Norwegian regulations, family is:

– spouse and children (in the case of married persons),

– parents (in the case of persons under 21 years of age).

[Infographics] [PENDLER STATUS DEDUCTIONS:

  • travel costs (airline tickets, bus tickets, tolls),
  • costs of renting accommodation in Norway (lease agreement),
  • electricity bills (bills issued),
  • daily allowance (rate determined each year)].

Required documents:

– statement of annual salaries and paid bills (Sammenstilling),

– pre-settlement statement (Skattemelding),

– account statement (årsoppgave),

– certificate of residence in Poland,

– certificate of registration of residence in Norway,

– title deed to dwelling in Poland or tenancy agreement,

– marriage certificate (married persons),

– birth certificate of children (persons with children),

– proof of travel (tickets, toll fees),

– tenancy agreement for accommodation in Norway (specifying size),

– rent receipts,

– electricity bills.

Some documents (marriage certificate, children’s birth certificates) must be translated into English or Norwegian – certified translations are valid for two months.

If they meet certain conditions, single people can also apply for Pendler status. In this situation, it is necessary to document having two households: an address of permanent residence in Poland and a flat in Norway (with an area not exceeding 30 m2 per person).

STANDARDFRADRAG

[Infographics] [STANDARDDFRADRAG

  • no Pendler status,
  • residence in Norway of less than 183 days within one year,
  • residence in Norway of less than 270 days within two years.

From 2019, only foreign workers on the continental shelf and seafarers are eligible].

Standardfradrag (10% allowance) is a tax allowance that allows a 10% tax deduction on employment income. The amount of the deduction may not exceed NOK 40,000.

Required documents:

– statement of annual wages and paid bills (Sammenstiling),

– pre-settlement statement (Selvangivelse),

– account balance information (årsoppgave).

In 2019, a new tax system for foreign workers - PAYE - has been introduced in Norway to replace the previous 10% allowance. The Standardfradrag can be used for the last time this year.