Deductions - foreign self-employed persons
Below you can find an overview of the most commonly used deductions to which you and your enterprise may be entitled.
Generally, expenses related to running your business will entitle you to deductions.
Some deduction items in the Income Statement and Business Tax Return are subject to specific rules:
Deductions for use of a car for business purposes
The deductions you’re entitled to will depend on the distance you've travelled for business purposes.
- If you use your own car for business purposes and drive less than 6,000 km per calendar year, you may be entitled to a rate-based deduction. Read more about business travel of less than 6,000 km
- If you travel more than 6,000 km in your own car, you must generally include the vehicle in the enterprise’s accounts.
Deductions related to office space
Expense recognition and depreciation when purchasing assets (equipment, fixed assets, etc.)
Purchases of assets must be recognised in the balance sheet and can be entered as deductions in the accounts. You may do this once, or you may recognise the expenses (depreciate) related to the purchases over several years.
The main rule is that if the cost is less than NOK 15,000, you can deduct the amount directly. The same applies if the cost exceeds NOK 15,000 and the expected period of use is less than three years.
Assets that are expected to have a useful life of at least 3 years and a cost price of at least NOK 15,000 must be depreciated using the diminishing balance depreciation method.
The accounting and tax-related methods for depreciation are very different. Enterprises that are subject to the bookkeeping obligation only have to follow the tax rules for depreciation. This applies to most sole proprietorships.
If you have a fixed asset with a cost price exceeding NOK 15,000 and an anticipated period of use over 3 years, you must submit form RF-1084 Avskrivning (Depreciation - in Norwegian only) as an attachment to the tax return. In this form, you calculate the year’s depreciation (deduction), which in turn must be entered under item 6000 in Income Statement 1 (RF-1175) or Income Statement 2 (RF–1167). This form is included in the Business Tax Return.
You can deduct all expenses in your enterprise from the year in which you start your business. All your income from the enterprise will be taxable. Check whether you’re self-employed.
If you’re self-employed, you can read more about start-up costs.
Expenses for electronic communication (EC)
You may be entitled to a deduction for electronic communication services (EC services) that you use for business purposes (not privately): mobile telephone, landline, IP telephone, broadband and wireless networks. Read more about conditions and reporting.
Expenses related to your pension
If you have a voluntary pension saving scheme in accordance with section 2-3, subsection 2, of the Defined Contribution Pension Act, you can claim deductions for your expenses.
The maximum saving is 6 percent of calculated personal income before deducting premiums for the pension scheme at between 1G and 12G. (You can learn more about the National Insurance basic amount - G - from NAV.)
The deduction for commuters is a deduction for the extra expenses you’ve incurred for travel, food and accommodation during stays away from your actual home. These are known as “commuter expenses”.
Conditions for being considered a commuter
If you share your home with children and/or a spouse who live in your home country, you’re considered a commuter for tax purposes if your home is in another country.
If you have a cohabiting partner and live with your own children, you’ll be considered a family commuter.
You must be able to provide a marriage certificate or birth certificate to prove your family ties. In addition, you must be able to show papers proving that you share a residential address in your home country.
Single (unmarried) commuters
You’ll be considered a single commuter if you’re not a family commuter. If you have a cohabiting partner (without children of your own who you live with), you’ll be considered single in this context.
If you’re single, other requirements apply in order for you to be considered a commuter for tax purposes. Single people are considered to be resident where they have an “independent dwelling”.
A residential property must meet the following requirements to be considered an independent dwelling:
- You have access to it every day of the week for a period of at least 12 months.
- The living space in the primary part of the property is at least 30 square metres.
- If several people live there, a further 20 square metres must be added for each occupant over the age of 15.
- The property has a water supply and sewage.
If you have an independent dwelling in Norway, you’re considered a resident in Norway. In that case, you cannot deduct expenses related to visits to your home country.
If you do not have an independent dwelling in Norway, you may claim deductions for commuter expenses related to home visits. In that case, the following conditions must be met:
- You have an independent dwelling in your home country, or you're under 22 years of age at the end of the income year and commute to your parents. You must provide evidence of your residential address abroad.
- You must travel home a certain number of times.
Commuting to a residential property outside the EEA:
- 22 years or older: generally, you must travel home every three weeks
- 21 years or younger: generally, you must travel home about every six weeks
Commuting to a residential property within the EEA:
- Generally, you must travel home four times per year
- The general requirement is 8 home visits per year if the home is in Sweden, Denmark or Finland.
In special circumstances, less frequent home visits may be accepted. For example if you fall ill or cannot afford to travel.
You may also be considered a commuter even if your residential property in Norway is considered an independent dwelling. The following conditions must then be met:
- You’ve lived in the same place (municipality) in your home country for over three years.
- You do not rent out your residential property in your home country.
- Your residential property in Norway cannot be larger than half the size of the residential property in your home country.
Items in the tax return
If you stay away from home overnight because of work, you may be entitled to a deduction for your extra expenses for food (board) and accommodation (lodging)
Rent exceeding NOK 10,000 (for the entire income year) must be paid via bank pursuant to section 6-51 of the Taxation Act. If you make payments in cash, you cannot claim any deductions.
3.2.9 Deduction for travel expenses for home visits
If you have to stay away from home because of work, you may claim a deduction for your travel expenses between your commuter accommodation and your home.
You can use the commuter calculator to calculate your deduction.
If you only have business income, you’re not entitled to the minimum standard deduction.
The most common deductions for businesses are as follows:
3.2.2 Actual expenses
Under this item, you can enter the voluntary occupational injury insurance from NAV, which is deductible by up to NOK 700.
3.2.8 Deduction for travel between the home and permanent workplace (travel to/from work)
You're entitled to a deduction for travel between your commuter accommodation and your permanent place of work, regardless of your actual expenses or the means of transport you use. The deduction is calculated at a rate according to the shortest distance between your home and your permanent place of work.
3.2.10 Allowance for childcare (childcare deduction) for EEA citizens
You can claim the childcare deduction for documented expenses related to childcare for children at home who are under 12 years of age during the income year. The following conditions must be met:
- Your home must be situated in another EEA state.
- If you have a limited tax liability, 90% of your family income must be taxable in Norway.
The childcare deduction is granted with up to NOK 25,000 for one child. This amount is increased by NOK 15,000 for each additional child.
3.2.18 Premium for own supplementary national insurance for self-employed persons
Generally as a business, you're not entitled to sickness benefit until 16 days have passed, and it will then be limited to 80 percent of the personal income - up to 6G. However, you may still take out insurance through the National Insurance Scheme in order to increase your cover for lost income. The upper threshold for the sickness benefit basis of 6G applies even if you’ve taken out insurance. You can choose between three types of voluntary sick pay insurances:
- 80 percent of the sick pay basis from the first day of sickness
- 100 percent of the sick pay basis from the 17th day of sickness
- 100 percent of the sick pay basis from the first day of sickness
Under this item, you enter the total amount paid in premiums to the National Insurance Scheme to get a higher coverage for loss of income as a result of illness.
Additional coverage for sick pay taken out with an insurance company will NOT be deductible in the income statement nor the tax return.
3.3.1 Interest on debt in Norway
This item shows the amount you have paid in interest on debt, penalty interest and/or the benefit of low-interest loans from an employer. Generally, the amount will be pre-filled with the amount that has been reported, so you should make sure that everything is correct.
3.3.2 Interest on debt abroad
This item concerns everyone who has paid interest on debt to foreign lenders. Different sets of rules apply depending on whether you’re a resident for tax purposes in Norway, or in a country within or outside the EEA.
3.3.3 Benefits derived from surrendered property/Maintenance payments
If you make regular payments to another person, you may be entitled to a deduction for the payments you've made. This does not apply to child support.
3.3.11 Deficits carried forward from previous years
This item shows your unutilised deficit from last year's tax assessment. Generally, the amount will be pre-filled, so you should make sure that everything is correct.
3.5.5 Special allowance for single providers
The special allowance applies to people who care for one or more children under 18 years of age and who are unmarried, divorced, separated, a widow/widower, or who do not live with a cohabiting partner on a permanent basis. You’re entitled to the special allowance if NAV considers you a genuine single provider and you’ve received extended child benefit from NAV under Section 9 of the Child Benefit Act during the income year. The child benefit is granted for children under 18 years of age. This means you’ll not receive the special allowance if you only care for young people aged 18 or over.
The personal allowance is given to you automatically. You do not include this as a deduction in the tax return.
2018 and later
The size of the deduction depends on the number of twelfths that are granted upon tax assessment.
2017 and previous years
The size of the deduction depends on the tax class and the number of twelfths that are granted upon tax assessment.
Twelfths (number of years)
The number of days you stay in Norway is stated in twelfths. This number corresponds to the 12 months of the calendar year. You enter the number of months under item 1.2 (twelfths) and the number of days under item 1.5.5 in your tax return.