Tax limitation - low general income

Who is entitled to tax limitation?

Tax limitation can be given to recipients of the following means-tested benefits from the National Insurance service:

  • transitional benefits
    - single mother or father if the benefit is granted on March 31 2014 or earlier
    - former family carer
    - surviving spouse
  • surviving spouse's pension
  • pension for a family carer

Tax limitation will be granted if calculated income:

  • does not exceed the thresholds set annually by the Norwegian Parliament (2016: NOK 139,400). In that case, you do not pay income tax and National Insurance contributions. 
  • exceeds the thresholds and the total of income tax and National Insurance contributions according to ordinary tax calculations comes to more than 55 per cent of the excess amount (the difference between calculated income and the threshold).

Calculation of income

The basis for calculating tax limitation is your general income (net income). Any addition to general income in the form of a distribution from a general partnership (item 2.7.10 or 2.7.11) is deducted. To this are added any:

• special allowances (item 3.5)
• deductible tax-free return for share dividend and/or gains on shares

A standard addition to income of 1.5 per cent of any net capital in excess of NOK 200,000 is then added. When calculating the addition to income, the capital value of your primary dwelling (i.e. your own dwelling where you were living permanently at the end of the income year) is not included in net capital. 'Primary dwelling' here also includes farmhouses and their naturally associated plots.

Tax limitation in connection with low general income is automatically granted during the assessment process.