Taxnorway - International pages

Deductions

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An overview is given below of the most commonly used deductions which you may be entitled to as an employee in Norway. You can enter these deductions on your tax return and receive a reduction in your tax.

Other deductions apply to seafarers. You can find information on this here.

The deduction guide gives you an overview of some of the most common expenses you can deduct.

list of items in the tax return.

Personal allowance

The personal allowance is a deduction which you receive automatically. This amount is not to be declared in the tax return. Note that if you have stayed in Norway for a limited part of the income year, the personal allowance will be reduced based on how long you have been in Norway. It is therefore important that you state how many days you have stayed in Norway during the income year in order to ensure that your personal allowance is calculated correctly. See an example of  tax calculation.

The personal allowance is divided into tax class 1 and tax class 2. In tax class 2, you receive a higher allowance. This tax class will be assigned if:

  • you have a spouse resident in your home country who earns less than NOK 45,870 during the income year 2016
  • you and your spouse are assessed jointly

Read more about how you can be assigned tax class 2.

Standard deduction for foreign employees

The standard deduction is a deduction which is intended for foreign employees with a limited tax liability. The deduction is intended to replace a number of other deductions. The deduction is 10 per cent of gross employment income, subject to a maximum of
 NOK 40,000. The deduction is entered in item 3.3.7.

You can claim the standard deduction if:

  • you are not resident for tax purposes* in Norway or
  • this is one of your first two years as being resident for tax purposes* in Norway


*You will be considered as being resident for tax purposes if you:

• have stayed in Norway for more than 183 days in any 12-month period, the residence status being valid from  the income year in which your period of stay exceeds 183 days, or

• have stayed in Norway for more than 270 days in any period of
36 months, the residence status being valid from the income year in which your period of stay exceeds 270 days.

These rules mean that you can always choose the standard deduction during the first two income years in which you are staying in Norway.

Note that the number of days relates to periods of stay on land and not the number of days on the continental shelf. You can never be resident for tax purposes based on periods of stay on the Norwegian continental shelf.

Read more about the standard deduction


Deductions for commuters

The deduction for commuters is a deduction for the extra costs you have incurred for travel, subsistence and accommodation as a result of stays away from your actual home. Note that the deduction for commuters is an alternative to the standard deduction. If you choose the deduction for commuters, you cannot claim the standard deduction at the same time. The deductions are entered in items 3.2.7 and 3.2.9.

Check if you are a commuter and which deductions you might be entitled to.

 


Benefits in kind and expense reimbursements

Most benefits with a financial value that you receive from your employer will generally constitute taxable income. These are called benefits in kind and expense reimbursements. As an exception to this general rule, typical commuter benefits such as free home visits, free subsistence and free accommodation will be exempt from being classed as taxable income. Note also that the deduction for commuters is an alternative to the standard deduction. You can only choose one of these deductions. If you choose the standard deduction, you will be taxed on commuter benefits you receive from your employer.

Read more about benefits in kind and expense reimbursements

Deductions for interest on debts

In some cases, you may be entitled to claim a deduction for interest that you have paid on loans during the income year.

Read more about the deduction for interest on debts


Parental allowance

You can claim the parental allowance for documented costs for the minding and care of children at home who are under 12 years of age during the income year. The following conditions must be met:
• Your real home must be situated in another EEA Member State.
• If you have a limited tax liability, 90% of your family income must be liable to tax in Norway.

A parental allowance of up to NOK 25,000 will be granted for one child. This allowance is increased by NOK 15,000 for each additional child.