Everyone who works in Norway must have a tax deduction card.
Your employees must have a tax deduction card even if you or they don't believe they're liable to pay tax in Norway.
What is a tax deduction card?
A tax deduction card is an electronic document which shows how much tax you as an employer must deduct before paying your employees their salary for work they've performed in Norway. The amount you deduct is called a tax deduction or withholding tax. It is a prepayment of the tax estimated by the tax authorities for your employee.
Most new foreign workers fall under a simplified tax scheme called PAYE (Pay As You Earn). Under this scheme, the workers are taxed at a fixed percentage that their employer deduct before every salary payment. The workers can chose to be taxed under the general tax rules instead of under the PAYE scheme. They can make their selection when they apply for a tax deduction card or later in the income year by applying for a new tax deduction card. This selection cannot be changed.
If it's likely that the income in Norway won't be taxable, you can apply to the Norwegian Tax Administration not to pay withholding tax for the employees concerned. You must apply to the Norwegian Tax Administration for exemption from employee’s withholding tax. In your application, you must explain why you believe the employee should be exempt.
If you're not granted exemption from withholding tax, you must deduct the tax even if you or your employees believe they're not liable to pay tax in Norway.
Find out which tax deduction card you should use for each employee in Altinn by using their Norwegian national identification number.
The tax deduction card applies to one income year (a calendar year)
If an employee works in Norway from 1 November of one year to 30 March of the following year, he or she will first receive one tax deduction card for the months of November and December and then another card for the months of January, February and March.
In order for you to be able to retrieve tax deduction cards for your employees, their employment must be registered.
Employers can apply for a tax deduction card electronically on behalf of foreign employees
As an employer, you can apply for a tax deduction card for your foreign employee, regardless of whether the employee already has a Norwegian national identity number or D number.
If your enterprise has a contract in Norway, you must declare the period during which the employee will be resident in Norway or on the Norwegian shelf
You do this in the Assignment and employee register. If your client is a private individual, you don't report information about your employees in the Assignment and employee register. You must then report information on the employment relationships via the a-melding to the NAV State Register of Employers and Employees.
If the work isn't subject to a reportable contract, your employees must apply for a tax deduction card themselves. See the wizard: I will be working in Norway – What do I need to do? Employers can also submit the application electronically on behalf of their employee; see Employers can apply for tax deduction cards on behalf of foreign employees.
The tax deduction card won't be produced until the employee has completed an ID check. Without a tax deduction card, employers must deduct tax at the rate of 50 percent. There are exceptions regarding ID checks for employees who
- only work on the Norwegian continental shelf
- work as a seafarer on a Norwegian-registered ship
- is a foreign artist or sportsperson