Norway - Tax Guide for Contractors, Expatriates & Seafarers
We are a specialist consultancy of fully qualified and experienced chartered accountants providing advice and solutions on UK and Norwegian tax to companies and individuals who have any involvement with the Norwegian tax system.
The tax system in Norway is every bit as complex as in the UK or other countries, and has different rules and reporting requirements. Tax rates in Norway are generally high and therefore a full understanding of the Norwegian tax system is vital in order to meet your obligations and to ensure that you do not pay too much tax in Norway.
For expats working in Norway there are tax reliefs available to help reduce personal tax liabilities and various solutions to reduce both income tax and national insurance in Norway whilst working there. If you need any further help don't hesitate to contact us.
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 contract management services in Norway.
General Tax Information
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 for a period exceeding 183 days drung any 12-month period or 270 days during and 36-month period, and do not have the intention to stay only temporarily;
- Individuals do not become resident during the first caledar year if the time spent in Norway that year is less than 183 days;
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 91 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 2015:
The general combined rate of national and municipal income tax is 27% 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 550'550 and NOK 885'6000,
- 12.00% on income above NOK 885'600.
Allowances and deductions for Norwegian residents for national and municipal income tax for 2015 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 40% of the base subject to a minimum of NOK 4'000 and a maximum of NOK 81'300.
- a special 10% deduction can be claimed by expatriates, staying less than 2 years in Norway; 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.
- additional expenses incurred while living away from home,
- travel expenses,
- pension premiums,
- 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 72'000.
For other persons the personal allowance is NOK 48'800.
Norwegian Seafarers Tax
This is a specialised service to Seafarers working in Norway who may be eligible for the Norwegian Seafarers Tax Deduction. We ensure that you get everything back to which you are entitled to.
We provide a straight-talking and professional service that checks your eligibility for Norwegian Seafarers Deduction and makes the appropriate claims on your behalf, taking away the worry of dealing with the Norwegian tax authorities.
Our service provides support and advice throughout the year to ensure that you are fully aware of your Norwegian tax position on an ongoing basis.
Our fees for this service are currently from £250.00 for twelve months.
To find out more and to get started simply call us on 0845 867 9294 or by e-mail .
Background - Norwegian Seafarers Deduction
Seafarers who are tax resident abroad who are in service on Norwegian vessels, i.e. vessels registered in the Norwegian International Ship Register (NIS) or the Norwegian Ordinary Ship Register (NOR) are liable for tax in Norway.
The Norwegian tax year runs from January to December. Any work you carried out onboard Norwegian vessels all within the Norwegian Continental Shelf, which are oil or gas related is taxable.
If you work onboard a vessel, you may be able to claim a Seafarers Deduction. To be eligible to claim you must spend at least 130 days in a calendar year working onboard a ship which is registered to work in Norway. The vessel does not have to be in the Norwegian sector, but must be registered to work there.
There is also a limited list of work activities that are vessel can undertake which can contribute to allowable time for a Seafarers Deduction claim. These include construction and maintenance but NOT anchor handling, supply boat runs or survey.
The following are deemed to be ships in service:
- Ships engaged in international shipping which have their own propulsion machinery, irrespective of the size of the ship.
- Vessels used in the petroleum activities that are engaged in supply, standby and anchor handling services, seismic or geological surveys and other comparable activities, as well as construction, pipe-laying or maintenance activity.
- Naval vessels on active service.
- Ships of 100 gross register tons or more that have their own propulsion machinery and are not included in the exceptions listed below.
The following are deemed not to be ships in service:
- Ferries or passenger vessels that only sail between Norwegian ports where the distance between the first and last port of call is less than 300 nautical miles.
- Vessels used in petroleum activities that are engaged in exploration, exploration drilling, extraction, exploitation and pipeline transportation.
- Ships that sail on Norwegian lakes and rivers.
- Ships engaged in stationary activity and harbour traffic or other activity over a limited distance where the distance sailed does not exceed 30 nautical miles.
- Accommodation ships or ships used as work platforms, missionary ships, theatre ships etc.
- Pleasure craft, vessels used for hospitality purposes, shuttle boats etc.
- Fishing, whaling and sealing vessels, but only for the period the vessel is used for fishing and whaling/sealing.
At the end of the tax year a Norwegian tax form is completed together with a Seafarers Allowance form.
The seafarers' deduction is 30 per cent, maximum NOK 80,000, of taxable income on board. The basis for calculating the deduction includes ordinary gross pay plus other taxable remuneration paid to the taxpayer and which is remuneration for work on board, or which replaces such remuneration.
If you are a self-employed seafarer then normally you will not be able to claim the Seafarers Deduction. However, we now have a range of solutions for you that will enable you to fulfil the Norwegian tax authorities requirements and make a claim for a tax refund assuming you meet the basic eligibility rules.
There are various methods that can be adopted depending on individual circumstances. If you would like an example specific to you then please get in touch.
Even if you find that you are not eligible for the Norwegian Seafarers Deduction in one year it may be that we have a solution for you to reduce your Norwegian tax liability in any case.
To find out more and to get started simply call us on 0845 867 9294 or by e-mail.
The Norwegian tax authorities do not like self employed workers who are not resident in Norway.
Therefore, to work in Norway as a contractor you must work through a company that is registered as a business enterprise in Norway. We can provide a full range of payroll services in Norway due to their local registration. You are employed by your own company and income is paid in the form of salary, allowances and expenses, the proportions depend on individual circumstances.
Salary, Tax & Social Security
We calculate income tax and social security liabilities on a Norwegian PAYE basis, and payments are made to the relevant authorities. The taxable amount may be reduced by offsetting certain business expenses.
Tax and Social Security Exemptions
There may be various income tax and social security exemptions and allowances available subject to individual circumstances.
To find out more and to get started simply call us on 0845 867 9294 or by e-mail.