Norway

Proposals for special rules for private consumption in companies

On 9 May 2022, the Ministry of Finance sent out proposals for special rules for private consumption in companies. Originally, the consultation deadline for the proposal was set for 1 August 2022 and the planned entry into force in the income year 2023. In connection with the proposed national budget for 2023, the introduction of the rules has been postponed, and there will be published a new proposal in 2023, which is planned to take effect from 2024. In the 2024 state budget, the special rules were not implemented. A new proposal is expected in 2024, with potential entry into force in 2025.

Changes regarding taxation of pension

The pension income tax free deduction and the thresholds for reducing the deduction are decided based on the pension level in the national budget issued in October, while the actual regulation of the deductions in the revised national budget issued in the spring are based on wage and price growth. Since there has been an increase in wage and price growth since October, there is a mismatch between the original estimate and actual pension growth.

The government is therefore increasing the threshold for step 1 for reducing the pension income deduction from 219,950 to 246,800 Norwegian kroner (NOK). In 2023, the deduction is phased out at a pension income level of NOK 567,650. The deduction will therefore apply to a smaller portion of pension income, resulting in a higher deduction. This is estimated to give an overall tax relief of NOK 4,500 for those who receive pension above the new threshold and up to the current threshold for step 2.

Further, this change results in a higher taxation of low pension income, since the rate for reducing the deduction is higher in step 1 than step 2 (16.7% and 6%, respectively). In order to steer the tax relief towards low pension income, the threshold for step 2 is therefore increased from NOK 331,750 to NOK 373,650. 

Changes regarding deductions for commuter travel and long-haul drivers

The government is changing the tax-free deduction for additional costs for stays in barracks, boarding houses, and dormitories without cooking facilities when commuting from NOK 177 to NOK 250 per day. The rate for long-haul drivers will change from NOK 300 to NOK 350 per day. The changes come into effect on 1 September 2023, and it is therefore not necessary for employers to retroactively correct previously submitted salary reporting.

Additional employer share

In 2023, an additional social security contribution was implemented, entailing 5% extra employer’s contribution on income exceeding NOK 750,000. (i.e. total contributions of 19.1%). The additional employer’s contribution will be phased out, starting by increasing the income threshold to NOK 850,000 for 2024. It is 'promised' that the additional 5% will be removed by 2025.

Possible changes in exit taxation

On 20 March 2024, the Ministry of Finance issued a proposal for consultation regarding the amendment of the rules on the taxation of capital gains, etc. upon emigration. The proposed rules entail that individuals moving from Norway will be subject to an exit tax, which is to be paid in full upon emigration, in instalments over 12 years, or in full after 12 years. The rules have an uncertain aspect in relation to European Economic Area (EEA) law and could severely impact heirs. The consultation deadline expired on 21 May 2024, and the hearing is currently marked as not yet concluded.