Brief information about financial activity tax on salary

Financial activity tax on salary is a tax on the salary basis in the financial sector. The tax amounts to 5 percent of an enterprise’s salary basis. 

In the a-melding, you must specify the total financial activity tax on salary for the entire enterprise.

If you submit information for several sub-entity in a single a-melding, specify the total for all the sub-entities.

More information about financial activity tax on salary 

 

Who must pay financial activity tax

Financial activity tax generally covers all employers with employees who carry out activities which are included in section K in Statistics Norway's Standard Industrial Classification (SN2007).

This means:

• financial service activities
• insurance, reinsurance  and pension funding, except compulsory social security
• activities auxiliary to financial services and insurance activities 

The activity must be assessed on the basis of the framework that is stipulated for the various industrial groups as they appear in SN 2007. It is the actual activity that is decisive, not the entry in the Register of Legal Entities.

 

Who is exempt from financial activity tax

• Companies with no employees.
• Employers where salary and other benefits linked to financial activity within section K amount to less than 30 percent of the employer's total salary expenses.
• Employers with financial activities within section K, where the proportion of salary and other benefits linked to financial activity which is subject to value added tax amounts to more than 70 percent of the employer's total salary costs linked to financial activity.

 

How to calculate financial activity tax on salary

The basis used to calculate financial activity tax on salary is the same as that used to calculate employer's national insurance contributions. Do not calculate financial activity tax on salary that is that is covered by the Svalbard Tax Act. 

You must specify the total amount of financial activity tax on salary as separate information in the a-melding. The calculation basis should not be specified. 

In cases of refunds of sickness benefit etc., you must reduce the basis for the financial activity tax and the basis for ordinary employer's national insurance contributions in direct correlation to the refund. See more under section 3 of the contribution basis and exemption from employer’s national insurance contributions when the employer advances sickness benefits and other national insurance benefits.

The basis for employer’s additional national insurance contributions must not be included in the basis for the financial activity tax.

 

The total financial activity tax on salary should equal:

The basis for employer’s national insurance contributions multiplied by the rate for financial activity tax of 5 per cent. 

 

Example 

An enterprise's total salary expenses subject to employer's national insurance contributions amount to NOK 30 million.  Of this, NOK 20 million is linked to financial activity which is not subject to value added tax.

The total financial activity tax on salary will be NOK 30 million x 5 per cent, which equals NOK 1.5 million.

 

Enterprises that engage in non-economic activity as defined in EEA law

Employers which engage in both economic and non-economic activity can opt to calculate financial activity tax on salary for the part of the salary and other benefits that is linked to the enterprise’s economic activity only.

This requires the employer to have a clear accounting divide between salary and other benefits linked to non-economic activity and economic activity respectively, so that it is possible to determine what proportion of salary costs are linked to the two activities. A cost unit must then be established for salary costs for the enterprise's non-economic activity. The employer must prepare specifications of salary costs for the non-economic activity.

Salary costs linked to central administrative corporate services must be allocated between the non-economic activity and the economic activity.

 

Example 

An enterprise's total salary expenses subject to employer's national insurance contributions amount to NOK 30 million. NOK 20 million of the salary costs are linked to financial activity which is not subject to value added tax, whilst NOK 10 million is linked to non-economic activity as defined in EEA law.

An accounting divide has been established between the economic activity and the non-economic activity.

The total financial activity tax on salary will be NOK 20 million x 5 per cent, which equals NOK 1 million.

 

The information you must provide

Amount

x NOK

Amount

Specify the total financial activity tax on salary for the entire enterprise.

If you submit information for several enterprises in a single a-melding, specify the total for all the enterprises.

 

When you must submit reports

You must specify financial activity tax on salary in the a-melding in the calendar month in which you pay salary and other benefits.  

 

Correcting errors 

 

What do we use the information for  

The Norwegian Tax Administration uses the information to assess financial activity tax on salary.

Statistics Norway (SSB) uses the information for statistical purposes.