General information concerning the annual accounts and bookkeeping obligation
Associations which had assets worth more than NOK 20 million or an average number of employees exceeding 20 full-time equivalents during the year are obliged to submit annual accounts under Section 1-2 first paragraph of the Accounting Act of 17 July 1998. If an enterprise is organised as a private limited company or foundation, the annual accounts obligation will be independent of the size of the enterprise or whether commercial activity is carried on.
The annual accounts obligation means that annual accounts and an annual report must be submitted in accordance with the provisions of the Accounting Act. The annual accounts must cover all activity that is carried on by the organisation. Under Section 4-1 third paragraph of the Accounting Act, non-profit associations and foundations subject to the accounting obligation may deviate from some of the fundamental accounting principles in the Accounting Act and instead follow the “Generally accepted bookkeeping practice for non-profit organisations” published by the Norwegian Accounting Standards Board (NASB).
Organisations which are subject to the accounting obligation will also be subject to a bookkeeping obligation under Section 2 first paragraph of the Bookkeeping Act of 19 November 2004. Organisations which carry on activity and which are obliged to submit tax returns for wealth and income tax or tax returns for VAT are subject to the bookkeeping obligation even if they are not required to submit annual accounts. See Section 2 second paragraph of the Bookkeeping Act. Provisions concerning bookkeeping, specification, documentation and retention of accounting documents are laid down in the Bookkeeping Act and associated regulations and must be followed by all entities that are subject to the bookkeeping obligation.
Organisations may also be subject to the accounting obligation under special legislation or internal rules. An example of this is the accounting and audit provisions for all organisational entities affiliated to the Norwegian Olympic and Paralympic Committee and Confederation of Sports (NIF) adopted by NIF on 17 February 1999 (Regnskaps- og revisjonsbestemmelser for små organisasjonsledd tilsluttet Norges Idrettsforbund og olympiske og paralympiske komité). It is otherwise recommended that all organisations prepare accounts, even if they are not formally obliged to do so. This is important, both to ensure internal control and to enable the enterprise to present accounts as documentation as and when necessary. The tax offices may also impose the bookkeeping obligation on any entity that is considered to carry on commercial activity; see Section 2 third paragraph of the Bookkeeping Act.
Bookkeeping, specification, documentation and retention of accounting documents
A description is presented below of key provisions from the Bookkeeping Act; see also Regulation No. 1558 of 1 December 2004 on bookkeeping (the Bookkeeping Regulation). The rules must be followed by everyone who is subject to the bookkeeping obligation. The description of the rules is not exhaustive, and the regulations must be reviewed in their entirety by the individual, if necessary with the professional assistance of an accountant or auditor, for example.
Sales documentation for cash sales
If an enterprise that is subject to the bookkeeping obligation makes cash sales, such sales must be registered on an ongoing basis on cash registers, terminals or some other equivalent system which produces dated and numbered cash register rolls or equivalent reports and which can print out sales documentation (receipts). Cash must be counted daily and entered in a daily settlement and then reconciled against dated and numbered total cash register rolls (Z reports) or equivalent reports. It must be stated who performed the daily settlement and it must be dated. See sub-chapter 5-3 of the Bookkeeping Regulation.
Sub-chapter 5-4 of the Bookkeeping Regulation sets out certain exceptions from the requirements concerning the documentation of cash sales. Section 5-4-1 contains an exception for entities subject to the bookkeeping obligation which make occasional or itinerant cash sales not exceeding three times the National Insurance basic amount during a financial year. Instead of cash registers, etc., entities subject to the bookkeeping obligation which fulfil the conditions can document cash sales on an ongoing basis in a bound book in which the pages are pre-numbered, or through copies of dated and pre-numbered sales vouchers, including pre-numbered tickets; see Section 5-4 first paragraph of the Bookkeeping Regulation.
Section 5-4-2 of the Bookkeeping Regulation contains an exception for sales made to the public at sports events, concerts, etc. However, this exception only applies to outreach sales to the public and not to sales from specific fixed sales outlets such as kiosks.
For more information on what sales documents must contain in general terms, see sub-chapter 5-1 of the Bookkeeping Regulation.
You can find more about bookkeeping here.
Salary/tax deductions/employer’s National Insurance contributions
Salary and other reportable benefits, as well as withholding tax and garnishments must be specified for each counterparty. The following information must be registered; see Section 5-6 of the Bookkeeping Regulation:
- National ID number
- Name and position
- Tax municipality
- Table number and/or the deduction percentage shown on the tax deduction card
For each period in which withholding tax and mandatory deductions (garnishments) are reported, the following information must be specified for each counterparty:
- Date of payment of benefits and, if possible, the period to which the benefit relates
- Gross benefit
- Any supplements for payments in kind from which deductions must be made
- Deductions for pension contributions, maintenance deductions and trade union fees not subject to withholding tax
- Basis for the deduction
- Amount of withholding tax and mandatory deductions (garnishments) made
For employees who are entirely or partly remunerated on the basis of number of hours worked, the following additional information must also be documented for each counterparty:
- Date on which the work was performed
- Number of hours worked on the date concerned
- Total number of hours during the period concerned
When employer’s National Insurance contributions are payable on the benefits, the benefits that are subject to contributions must be presented collectively, per contribution rate and zone; see Section 3-1 first paragraph 9.
Retention of accounting documents
Accounting documents referred to in Section 13 first paragraph (1) to (4) of the Bookkeeping Act must be retained in Norway for five years after the end of the financial year. This concerns:
- Annual accounts and other mandatory accounting reports, annual reports and audit reports
- Specifications of mandatory accounting reports (see Section 5 of the Bookkeeping Act)
- Documentation of posted and deleted information, documentation of audit trails, etc. and the balance sheet
- Numbered letters from auditor.
Accounting documents referred to in Section 13 first paragraph (5) to (8) of the Bookkeeping Act must be retained in Norway for three years and six months after the end of the financial year. This applies for example to agreements concerning the activity, with the exception of agreements of minor importance, and correspondence which provides important additional information in connection with posted information.
Rules for organisations which are not subject to the bookkeeping obligation under the Bookkeeping Act
If an organisation is not subject to the bookkeeping obligation and does not apply the provisions in the bookkeeping legislation (see above), in accordance with Section 5-11-2 of Regulation No. 1766 of 21 December 2007 pursuant to the Tax Payment Act, a payroll list must be compiled for each recipient of salary payments or other remuneration.
Each list must include:
a) national ID number,
b) name and position,
c) tax municipality,
d) table number and/or the deduction percentage shown on the tax deduction card
If the tax deduction card is not made available to the employer and the employer does not obtain information which must be given in the tax deduction card in any other way, the employer’s documentation must state the name and number of the municipality in which the remuneration recipient (the taxpayer) claims to be resident as of 1 November in the year before the deduction year. If the remuneration recipient is foreign and was not resident in Norway on 1 November in the year before the deduction year, the documentation must state the municipality in which the person concerned was resident at the time of arrival in Norway.
If the employer has received an order concerning garnishments under Chapter 14 of the Tax Payment Act, the documentation must also state the following:
a) who issued the order,
b) when the order was received,
c) the amount that is to be covered by the garnishment,
d) the income year that the garnishment order concerns, and
e) the deduction percentage or amount that is to be deducted for each payment period.
For each period with mandatory reporting of withholding tax and garnishments, the documentation must provide the following information for each taxpayer:
a) date of payment of benefits and, if possible, the period to which the benefit relates,
b) gross benefit, if specifying the number of reimbursed hours is relevant,
c) any supplements for payments in kind from which deductions must be made,
d) deductions under Section 5-9 of the Tax Payment Act,
e) deductions from salary payments under the Ministry of Finance's Regulation No. 1158 of 19 November 1999
Section 5-15-4 (home PCs),
f) the deduction basis, and
g) the amounts deducted as withholding tax and mandatory deductions.
For employees who are entirely or partly remunerated according to number of hours worked, the following additional information must also be documented for each taxpayer:
a) date on which the work was performed
b) number of hours for the date concerned, and
c) total hours for the period concerned
Documentation of salary, etc. which must be issued no later than the date on which it is possible to receive the benefits concerned.
Ordinary salary during holiday, holiday pay and salary before Christmas must be entered in the list. Salary and remunerations which as of the date of payment are below the applicable minimum thresholds for the calculation of withholding tax, the calculation of employer's National Insurance calculations or the salary reporting obligation must also be entered in the salary list.
Salary, etc. which is referred to in the previous paragraph must be entered in the salary list no later than upon payment or at the earlier date on which the person concerned becomes entitled to receive the amount. Supplements for the value of payments in kind and gratuities must be entered in the list for each deduction case.
The documentation must be laid out so as to facilitate inspection by the competent supervisory authority. When employer's National Insurance contributions are payable on benefits, the benefits concerned must be specified separately and provision made to enable the benefits to be presented collectively, per contribution rate and zone.
The documentation must be retained in Norway for a period of five years after the end of the financial year.
As mentioned previously, the organisation may be subject to the bookkeeping obligation under special legislation or internal rules.