The legal basis for the standard deduction is section 6-70 of the Tax Act.
- The standard deduction is 10 %
- The deduction is limited to NOK 40 000
- The standard deduction may be granted for the first two assessments a person is considered resident in Norway
- If the standard deduction is chosen, this also applies to the spouse
The standard deduction
The standard deduction is 10 % of the calculated gross income including taxable payments in kind and expenses/allowances covered by the employer.
Who may claim the standard deduction?
- Employees working on the Norwegian Continental Shelf, taxable pursuant to the Petroleum Tax Act, may choose the standard deduction. The employees may claim the standard deduction regardless of the duration of working periods.
- Seafarers liable to taxation pursuant to section 2-3 (1) h of the Tax Act, are granted the standard deduction regardless of the duration of the working period.
- Employees staying temporarily in Norway, tax liable pursuant to section 2-3 (1) d and (2) of the Tax Act.
- An employee tax liable pursuant to the Tax Act section 2-1 (1) as resident, may be granted the standard deduction for the first two assessments he/she is considered resident in Norway.
The standard deduction is ment to cover
- Additional expenses for board, lodging and travel incurred when working away from home (commuter expenses)
- Interest on debt
- Loss in connection with realisation of shares
- Expenses in connection with care of children (for example: kindergarten)
- A special deduction for old age and disability
- A special deduction for excessive medical expenses
- Tax deduction for Young people’s housing saving (BSU) scheme
Deductions not covered by the standard deduction
When certain conditions are met, the following deductions may be granted in addition to the 10 % standard deduction:
- minimum deduction
- seafarer’s deduction
- deductible premium to public or private Norwegian Pension Schemes
- deductible trade union fee
Residents within the EEA have an expanded right to claim deduction for expenses. This applies for kindergarten-expenses, a special deduction for old age and disability, a special deduction for excessive medical expenses and deduction for interests on dept. For further information regarding these deductions – see Tax Topics no 12, 13 and 17. Such deductions as mentioned above can not be allowed to persons who claim the standard deduction.