Norwegian tax legislation distinguishes between full tax liability for resident taxpayers and limited tax liability for non-resident taxpayers. Residents are liable to income tax on their worldwide income, whereas non-resident taxpayers are only subject to income tax on specific types of income from Norwegian sources.
Non-residents are liable to Norwegian (income) tax on:
- Income from conducting or participating in business carried out or managed in Norway, including the hiring out of labour.
- Income from movable or immovable property situated in Norway (including dividends from shares in Norwegian companies).
- Remuneration (including pensions) received as a director or member of a board of directors or the like of a Norwegian company or entity, or bonus, gratuity, or the like received in any capacity from such company or entity.
Where an individual is tax liable to Norway only a part of the income year, the income is annualised. The same applies for certain deductions (i.e. personal deduction and minimum deduction, see the Deductions section).
The Norwegian income tax system for individuals is based on a dual tax base system: general income and personal income.
General income tax
General income is taxed at a flat rate of 23%. The general income tax base comprises all categories of taxable income (i.e. income from employment, business, and capital). Tax allowances, expenses, and certain losses are deductible when computing general income. The taxes on general income are the county tax, the municipal tax (Norway is divided into 19 counties and subdivided into 426 municipalities), and the state tax.
Bracket tax on personal income
Personal income between 169,000 Norwegian kroner (NOK) and NOK 237,900 is subject to a bracket tax of 1.4%. For personal income between NOK 237,900 and NOK 598,050, the bracket tax rate is 3.3%. For personal income between NOK 598,050 and NOK 962,050, the bracket tax rate is 12.4%. Personal income exceeding NOK 962,050 is subject to a bracket tax of 15.4%. The personal income tax base comprises income mainly from employment, including benefits in kind, and pensions.