Where will I find the amounts that I have to enter in income statement 1 (RF-1175) or the Business Tax Return?
If you run a sole proprietorship, you must submit income statement 1 (RF-1175) or the Business Tax Return in addition to your tax return. Everyone who is obliged to submit an income statement or Business Tax Return is subject to a bookkeeping obligation. For more information, see the Bookkeeping Act and the Bookkeeping Regulation.
Once the bookkeeping has been done, you can start filling in income statement 1 (RF-1175) or the Business Tax Return. You should consider using a chart of accounts which is harmonised with the items in the form. This will make it easier for you to transfer the amounts across.
The alternative to doing the bookkeeping yourself is to pay an authorised accountant to do it for you.
What costs can I deduct in income statement 1 (RF-1175) or the Business Tax Return?
In the income statement or Business Tax Return, you must enter costs which you have posted in your enterprise's accounts. You can claim income deductions for costs incurred in acquiring, maintaining or generating taxable business income. See also the explanations concerning the individual items in the Guidelines to completing income statement 1 or the help texts for the Business Tax Return.
Do I have to fill in “Specification of private account”, i.e. from item 2061 to item 2078 inclusive (RF-1175)?
Yes, the amounts from the private account are included in the equity reconciliation. The equity reconciliation shows how the equity changed during the income year. It also provides a check to ensure that you have not made any bookkeeping errors.
How do I take account of the private use of a telephone that I purchased for my business when I fill in income statement 1 (RF-1175) or the Business Tax Return?
Read here about how to deduct costs for electronic communication (EC). See also the help text in the Business Tax Return.
What is the difference between item 7080 “Vehicle expenses, use of private vehicles for commercial purposes” and item 7099 “Private use of commercial vehicle”?
In the income statement, enter the deduction for costs attributable to commercial vehicles. You should count a vehicle as being a commercial vehicle if:
- the vehicle is used for business travel only,
- the vehicle is used for business travel covering at least 6,000km during the income year (considered over a period of three years).
- business travel accounts for the majority of the overall use of the vehicle, and the business’s circumstances make it necessary to use the vehicle. This could for example be the case if the vehicle is used to transport tools, goods and samples that are so heavy or bulky that it would be impossible to carry them on any other means of transport. The same applies if the vehicle is used as a sales booth, workshop or similar.
- the construction or fitting-out of the vehicle means that it is not suited or intended for private use. This requires the vehicle not to have been used for private travel except between the home and a permanent workplace and/or for home visits.
In form RF-1125 Bruk av bil (Car use - in Norwegian only), you must calculate reversal for private use of a commercial vehicle. You must enter the amount from RF-1125 under item 7099 of income statement 1 (RF-1175). The form for car use is included in the Business Tax Return. You should also enter the same amount under item 2075 of form RF-1175. These items will only be relevant if the commercial vehicle is used for private travel during the income year. Occasional access to private use will not trigger reversal under the ordinary standard rates. The question of whether or not a commercial vehicle is used privately will be resolved by the Norwegian Tax Administration based on evidence which will be used to determine what is most likely following an assessment of each individual case.
See here for more information on how to claim an income deduction if the vehicle is not considered to be a commercial vehicle.
Should I enter losses on shares, etc. in income statement 1 (RF-1175) or the Business Tax Report in addition to item 3.3.8 oritem 3.3.10 of the tax return?
Not everyone who submits an income statement has to recognise shares and other securities that they own as assets in their enterprise. You should recognise your securities as assets in your accounts if they are special and closely linked to your sole proprietorship. If you do this, you should also recognise any losses upon realisation of the shares, etc. in your accounts. In such a case, you must enter realised losses with a negative prefix in income statement 1 (RF-1175) or item 0414 of the Business Tax Return. The amount under this item is not included in the business income/deficit which you transfer from item 0402 of the income statement to form RF-1224 Personal income from proprietorships and the tax return.
Approved deductible losses from item 120 of form RF-1088 Aksjer og egenkapitalbevis (Shares and equity certificates – in Norwegian only) will be pre-completed in item 3.3.8 of the tax return. You should not correct this item if you have recognised the shares etc. in your business and entered the loss under item 0414 of form RF-1175.
If the shares etc. have not been entered in form RF-1088, you must submit form RF-1059 Aksjer og fondsandeler m.m. (Shares and units in funds etc. – in Norwegian only) as an attachment to your tax return. If there is a negative amount under item 902 of form RF-1059, you must enter this loss under item 3.3.10 of the tax return.
In 2016, I received work remuneration from a business assessed as a partnership (KS, ANS, etc.). Should I enter the work remuneration in my income statement?
You do not need to submit income statement 1 (RF-1175) or the Business Tax Return as well as the tax return, unless you run another business in addition to the business assessed as a partnership in which you are a partner. In a few cases, a taxpayer’s activities linked to owning, purchasing and selling shares in a business assessed as a partnership, shares and other securities may be considered to constitute commercial activity. This assumes that the activity is extensive.
Not everyone who submits an income statement must recognise shares in a business assessed as a partnership as an asset. You should recognise your share as an asset in your accounts if it is special and closely linked to your sole proprietorship. If you decide to do this, you must also recognise work remuneration in your accounts. In this case, you must enter the income under 0416 of income statement 1. The amount under this item is not included in the business income/deficit which you transfer from item 0402 of the income statement to form RF-1224 Personal income from proprietorships and the tax return.
Even if you include the share in a business assessed as a partnership as an asset in the income statement, you must transfer the amounts from “Deltakerens melding over egen inntekt og formue i selskap med deltakerfastsetting” (Partner statement of assets and income in a business assessed as partnership - in Norwegian only). (RF-1221) directly to the tax return.
How do I claim an income deduction for a fall in value of fixed assets which I have purchased for my enterprise?
Read here about how to claim income deductions for loss of value of fixed assets in an enterprise.
Do I need to fill in the fields called "Value last year” in the income statement?
Entering last year's figures in the income statement and balance sheet is normally voluntary. You must fill in the figures from last year if they have been recalculated after you submitted last year's income statement.
The final step in income statement 1 (RF-1175) is “Specify annual result and reconcile equity”. Under item 0420, you must enter the fiscal equity from the previous income year. You must do this even if you did not enter the figures from the previous year in the profit and loss account and the balance sheet in the income statement.
When you fill in the form in Altinn, you will see that Altinn will retrieve the figure under item 0420 from elsewhere in the income statement. You must therefore also fill in the fiscal equity from the previous income year in the balance sheet. This is done in the step called “Specify balance sheet”. In this step, you will find item 2050 Other equity. Under this item, enter the equity from the previous year in the “Value last year” column.