Norway

Personal deduction (personfradrag)

Individuals are entitled to a personal deduction for municipal taxation purposes. The allowance amounts to NOK 88,250. As of 2018, no special deduction is granted to spouses who are assessed jointly on their total income and capital.

Minimum deduction (minstefradrag)

As an alternative to deduction for actual expenses, the taxpayer may claim a standard deduction, called the minimum deduction. The minimum deduction is intended to cover expenses normally connected with employment. The taxpayer may, however, choose to claim a deduction for actual expenses if these are higher. On the other hand, the minimum deduction may be claimed even if the taxpayer has not incurred any of the expenses the deduction is supposed to cover.

The deduction is 46% of the basis, the maximum being NOK 104,450 and the minimum NOK 4,000. The minimum deduction covers all expenses normally connected with employment, except additional expenses incurred through living away from home, interest payments, travelling expenses necessary for work, and union dues. Pension contributions, alimony, etc. are also not covered by the minimum deduction. Thus, such expenses may be deducted in addition to the minimum deduction.

Interest expenses

As a general rule, interest expenses are deductible irrespective of whether the debt has any connection with the earning of income or not. Interest expenses are deductible irrespective of what the loan has been contracted for and irrespective of whether the loan is secured by mortgage or not.

If the taxpayer owns immovable property situated abroad or performs or participates in a business abroad and income from such property or business is exempt from tax in Norway under a tax treaty, only a proportional part of the business expenses is deductible, corresponding to the relationship between the value of the immovable property or assets abroad and the value of the total assets. Note that this is not applicable if immovable property is located in the EEA area.

Alimony

In general, alimony is not deductible (and not taxable for the recipient).

Charitable contributions

Deductions may be claimed for contributions to certain non-profit organisations. The total deduction per year may not exceed NOK 25,000.

Contingent liabilities/pension schemes

Union dues are deductible (capped at NOK 7,700).

Both employers' and employees' contributions to various pension schemes may be deductible when certain conditions exist. The rules are of a very technical and extensive character.

Fines and penalties

Fines and penalties are normally not deductible, including interest on tax due.

Business versus non-business expenses

Expenses related to taxable income will normally be deductible (however, the minimum deduction will comprise expenses normally connected with employment). Private expenses not related to taxable income are not deductible.

Losses

A loss or deficit incurred in business is normally deductible from other income in the year in which it occurs.

A capital loss is deductible to the extent a gain under similar conditions would have been taxable as general income.

As a general rule, a loss or deficit may be carried forward against a later year's income for an infinite period. The loss must be deducted the first year a profit arises.

A loss may only be carried forward in case of the taxpayer's bankruptcy to the extent that outstanding debts after the bankruptcy have been paid to the creditors.

A loss may normally not be carried back. However, when a business is terminated, a loss incurred in the year of termination or the previous year, which has not been set off, may be carried back for two years or one year, as the case may be.