Tax-free or taxable organisation
Family day care centres which have a commercial object are taxable organisations. In special cases where the organisation/institution which runs the family day care centre does not have the object of generating a profit, but is run on a non profit-making business, the organisation may be considered a tax-free organisation following a specific individual assessment. Such day care centres will not be taxable for any income they generate linked to running of the day care centre. For more information, see the brochure entitled "Tax for non profit-making organisations and institutions". This brochure and other information is also available from the tax office.
Family day care centres that are owned by a private organisation, parent group or similar must be subject to accounts-based assessment if the conditions for being considered a tax-free organisation are met. This means that a deduction will be given for actual documented expenses and the standard deduction may not be chosen. Family day care centres must keep accounts in accordance with the Bookkeeping Act and retain receipts for the expenses they incur. The day care centre must submit Income statement 1 (RF-1175) together with the tax return for self-employed persons (RF-1030).
The deadline for submission of tax returns via Altinn is 31 May. the year after the income year.
Deduction for expenses
Family day care centres receive a deduction for all the expenses they incur linked to the running of the centre, e.g. salary expenses, holiday pay, employer's national insurance contributions, compensation to the host home or rent, toys, food, museum visits, drawing paper, etc.
Family day care centres are not entitled to a deduction for wear and tear on assets, e.g. furniture and toys which belong to the family from which the day care centre rents premises. If the family day care centre owns objects which are primarily used in the running of the centre, the centre will be entitled to a deduction under the ordinary rules concerning deductions. If an object costs NOK 15,000 or more and has a useful life of at least three years, a deduction will be given in accordance with the rules concerning depreciation. If the object costs less or has a shorter useful life, the family day care centre may deduct the cost price in the year in which the object is purchased.
Compensation to the host home
If no one from the host home actively participates in the running of the family day care centre, i.e. does not carry out work linked to the day care centre such as administration or employer's responsibilities, the compensation paid to the host home will be treated as rental income for the home-owner.
For more information concerning exemption-based assessment or tax obligations for such rental income, see the brochure entitled "Tax on the letting of housing and holiday homes”.