Norway

Social security contributions

The Social Security Law deals with the various benefits from and payments to the National Insurance Scheme.

The scheme is financed by the individual's and employer's social security contributions in addition to grants from the state and the municipalities. The individual's contribution is charged at a higher rate for self-employed persons (11%) than for employees (7.8%). The employer's contribution (14.1%) must be paid with respect to salaries, etc. The rates are determined by the Parliament in the annual decrees on contributions to the National Insurance Scheme.

Social security contributions are levied on the ‘personal income’ base.

Employee's contribution

Individuals, including non-residents receiving remuneration for services performed in Norway, are liable to social security and pension contributions, which are paid together with income taxes. Foreigners may be wholly or partly exempted from social security contributions, according to social security agreements, or upon application, provided they are satisfactorily covered in their home country. The EEA agreement may also exempt member-country citizens from Norwegian social security.

The following conditions apply to both employed and self-employed individuals:

• Income not exceeding NOK 99,650 is exempt; the contribution may not constitute more than 25% of the income for amounts in excess of NOK 99,650.
• Income derived by individuals under 17 or over 69 years of age is subject to the contribution, but at a low rate of 5.1%.
• Salary income, sickness benefit, etc., derived by individuals aged 17 to 69 is subject to the contribution at a rate of 7.8%.

The individual's contribution is not deductible for their tax purposes.

Employer's contribution

The employer must also make social security contributions. The contribution is based on total Norwegian gross salary (and taxable benefit) costs. The employer’s contribution is levied at a rate of 14.1% but could be lower when the employer is established in certain sparsely populated areas. The increased employer’s part of 5% (meaning a total rate of 19.1%) for income exceeding NOK 850,000 (2024) is be abolished from 1 January 2025. Companies with payroll expenses shall from that point on calculate employer's national insurance contributions according to the normal rate of 14.1%

Social security agreements may exempt the employer from this tax (see the Foreign tax relief and tax treaties section for a list of countries with which social security agreements exist). If a similar social security contribution is paid to another state based on the same salaries, etc., then a credit may be applied for against the employer's Norwegian social security costs.

The employer's contribution is deductible for tax purposes of the employer insofar as the wages to which it relates are deductible.

Consumption taxes

Value-added tax (VAT)

VAT is a tax on sales. It is due to be paid when sales of goods and taxable services are taking place at all stages in the chain of distribution within Norway. VAT is also levied on imports.

The expenses (actual costs) are included in the following VAT rates:

• Principal VAT rate: 25%.
• Train: 12%.
• Airplane: 12%.
• Taxi: 12%.
• Rental car: 25%.
• Hotel, boarding house and rent: 12%.
• Buying food, (e.g. in a grocery, take away): 15%.
• Buying food in a restaurant: 25%.

Wealth taxes

Individuals pay both municipal wealth tax and state wealth tax.

The municipal wealth tax rate is 0.525% and is calculated based on global assets exceeding a net threshold of NOK 1,760,000 for single/not married taxpayers and NOK 3,520,000 for spouses.

The state wealth tax rate is 0.475% and is calculated based on assets exceeding a net capital tax basis of NOK 1,760,000 for single/not married taxpayers and NOK 3,520,000 for spouses. For net wealth in excess of NOK 20,700,000, the rate is 0,575%.

Thus, the maximum wealth tax rate is 1.1%.

Inheritance, estate, and gift taxes

Inheritance and gift tax was removed as of 1 January 2014.

Property taxes

Tax on property is an optional tax and decided by each municipality. If tax on property is levied, for personal homes and vacation homes, the minimum is 1‰ and maximum is capped at 4‰. A basic deduction may apply.

Exit taxation

The exit taxation rules stipulate that if an individual is no longer considered a tax resident of Norway, either under Norwegian law or a tax treaty, and has latent gains on shares etc. exceeding NOK 3,000,000, they will be taxed as if the shares were realized the day before they moved from Norway.

This applies when the total gain from all taxable shares etc., net of deductible losses, exceeds NOK 3,000,000. Losses are deductible upon moving to an EU/EEA state, to the same extent and under the same conditions as gains are taxable. Losses incurred when realizing the shares are not deductible.

Deferral or waiver of tax payment

The tax can be paid in full upon emigration, in instalments over 12 years, or in full after 12 years. If the taxpayer pays the exit tax in instalments over 12 years, no interest will accrue. However, if the taxpayer chooses to delay  the exit tax in full for 12 years, the tax amount will include interest.

For those moving outside the EU/EEA, collateral must be provided to be eligible for the tax payment deferral. The collateral must correspond to the exit tax liability and can be provided through various means, such as:

• A bank guarantee
• A pledge in securities
• Other reassuring security

Dividend distribution during the 12-year period

For dividends distributed during the 12-year period on shares subject to the established exit tax, a proportional share of the exit tax claim will become due. This proportional share is set at 70% of the distributed dividend. 

Upon the taxpayer's death

If the taxpayer's heir(s) are resident in Norway, the exit tax will be waived. If the heirs are resident abroad, they can, under certain conditions, assume the deceased's tax position concerning the exit tax and the 12-year period. Note that the heir will step into the deceased's 12-year period - there will not be a separate 12-year period for the heir.

It is further proposed that if a foreign heir receives an inheritance from a deceased person resident in Norway, exit tax will be triggered. The heir will then also "inherit" the obligation to pay the exit tax.