Reindeer husbandry
Reindeer herders must pay tax on the income from reindeer husbandry and can deduct expenses related to reindeer husbandry.
Does this apply to me?
This applies to you if you’re a reindeer herder.
To whom does it not apply?
This does not apply to you if you’ve discontinued your reindeer husbandry activities and only have a few reindeer left.
You must do the following
Tax deduction card and advance tax
Check your tax deduction card and remember to pay advance tax.
Value added tax
If you’re registered in the Value Added Tax Register, you must also submit the VAT return.
Accounting
Keep accounts throughout the entire year. Your accounts must be updated with all income and the expenses you’ve had.
The tax return
You must submit the tax return with business information by 31 May at the latest.
Your accounts are the basis for completing the business information. You must state all the income and expenses from your business activity. You’ll get deductions for expenses.
If you have a sole proprietorship, you must calculate and state personal income for your business activity.
Annual reporting by reindeer herders
The annual reporting by reindeer herders, reindriftsmeldingen, is not a tax return. The annual report is registered at the Norwegian Agriculture Agency usually by 10 April.
Income
Income from reindeer husbandry and suplementary income must be reported in the tax return. Examples of supplementary income
- income from the sale of handicrafts that are made from reindeer products
- income from berry collection
- income from trapping
- income from fishing in rivers and freshwater
Compensation
If you’ve received compensation for the loss of reindeer, this must be entered as income.
- Tourism
- is not considered an integral part of reindeer husbandry. It’s treated as other business activity.
- Courses
- are not considered an integral part of reindeer husbandry. It’s treated as other business activity generated through educational services.
- Field trips for schools
- are not considered an integral part of reindeer husbandry. It’s treated as other business activity generated through educational services.
- Assignments for the Norwegian Armed Forces (survival training)
- are not considered an integral part of reindeer husbandry. It’s treated as other business activity/rental.
- Film and television productions
- are not considered an integral part of reindeer husbandry. It’s treated as other business activity/rental.
- Education for upper secondary schools/universities (specialisation for reindeer husbandry) “training/course in Sami culture and history” (slaughter, hunting, and similar)
- is not considered an integral part of reindeer husbandry. It’s treated as other business activity generated through educational services.
- Reindeer herding (guarding/tending reindeer for others)
- may be considered salary to an employee. It’s not included in the special allowance for reindeer husbandry since it’s an activity operated outside of one’s own reindeer husbandry. The remuneration is mainly related to the labour of the individual involved in the reindeer herding and not to one’s own animals and from the exploitation of the natural resources of the grazing land.
Fradrag
Deductions for VAT on snowmobiles, tracked motorcycles, and ATVs in reindeer husbandry
If you own reindeer and are operating your business in the Sámi reindeer husbandry area
This means that you can own up to four snowmobiles, tracked motorcycles, or ATVs, without them being classified as passenger vehicles. This means that you’re entitled to deductions for VAT for the share used in connection with reindeer husbandry when buying the vehicles.
If you’re engaged in reindeer husbandry outside of the Sámi reindeer grazing area
You can then own up to eight snowmobiles or ATVs.
About new vehicles
To be entitled to deductions, you can only buy new vehicles every other year (after 24 months). If the vehicle is completely destroyed (condemned), you can claim a deduction for VAT when it is replaced.
Reindeer owners can own both a primary dwelling and a secondary dwelling. The secondary dwelling is normally used as a summer dwelling by the family when the reindeer are in their summer grazing area. The dwellings are as a rule outside the grazing area and closely connected to the permanent habitation in the district.
The secondary dwelling is considered a residential property building and cannot be depreciated.
Both residential properties follow the regulations for tax on renting out residential property: Tax when you rent out houses and properties
For reindeer husbandry, the residence period for secondary dwellings and primary dwellings is considered the same. The residential properties can be sold tax free if all the other conditions are fulfilled.
Both residential properties follow the regulations for the realisation of one’s own home Tax when you sell a residential property or other properties
You can claim a deduction for expenses for food and drink (board) if you’re living somewhere other than your home.
If you’re living in your secondary dwelling, you cannot claim a deduction for food and accommodation (board and lodging).
You can claim a deduction for operating expenses, such as expenses for home contents in your herder accommodation.
The main rule is that you cannot claim a deduction for expenses for workwear, even if the clothes are mainly used for work purposes.
You can claim a deduction for workwear not suitable for use outside of work, such as protective clothing.
You can claim deductions for expenses in connection with buying a herding dog. If the herding dog costs NOK 15,000 or more, the expense must be depreciated in balance group d.
You can also claim a deduction for expenses related to buying food for the herding dog. The expense must be set to NOK 2,600 per year. If you can prove that the expense is higher, you can use the actual cost.
Any sale of puppies is taxable income.
Mean income assessment
With mean income assessment the income from reindeer husbandry is distributed over a number of years for a more even distribution of the income.
Mean income assessment applies to sole proprietorships.
After engaging in reindeer husbandry activities for three full calendar years, your taxable income for that third year will be calculated based on the average annual income over those three years. This means your total income for the three years will be summed and then divided by three.
Mean income assessment continues until the enterprise terminates.
In your tax return, you must report both the annual profit or deficit and the profit or deficit for the two previous years.
When the enterprise ceases operations, there is no mean income assessment for the final year.
If the reindeer husbandry activities are continued by a sole heir or spouse/cohabiting partner, the mean income assessment will continue.
Reindriftsfradrag
If you operate in reindeer husbandry as a business activity for more than six months of the income year, you may be entitled to the special allowance for reindeer husbandry.
The special allowance for reindeer husbandry applies only to positive income, meaning the allowance cannot exceed your profit.
The special allowance for reindeer husbandry does not reduce calculated personal income. This means it does not affect the calculation basis for sickness benefit, parental benefit, and other benefits.
If the profit from reindeer husbandry is less than NOK 93,000, the special allowance for reindeer husbandry will be the same as the profit, resulting in a taxable income of NOK 0.
Example
Profit NOK 80,000
- special allowance for NOK 80,000
reindeer husbandry
= Taxable income NOK 0
If the profit from reindeer husbandry is between NOK 93,000 and NOK 361,421, the special allowance for reindeer husbandry will be NOK 93,000 plus 38 percent of any profit over NOK 93,000.
Example
Profit NOK 200,000
- special allowance for reindeer NOK 133,660
husbandry NOK 93,000 +38
percent of (200,000 – 93,000)
= Taxable income NOK 66,340
If the profit from reindeer husbandry is more than NOK 361,421, the special allowance for reindeer husbandry will be the NOK 195,000.
Maximum limit for the special allowance for reindeer husbandry
The maximum limit for the special allowance for reindeer husbandry is NOK 195,000.
The special allowance for reindeer husbandry is calculated based your profit from reindeer husbandry, which means all income minus all expenses. Once the average income has been calculated, this will be the basis.
Such benefits must not be entered as income in the business information but directly into the tax return.
In the calculation of the special allowance for reindeer husbandry, you can include sickness benefits, unemployment benefits, and parental benefit that replace income from reindeer husbandry.
You may claim a deduction for deposits to the reindeer owner fund. Withdrawals from the reindeer owner fund must be added to the basis for the special allowance for reindeer husbandry.
If you share your business income with others, you must share the allowance. This can apply to spouses, but also to businesses assessed as partnerships (ANS and DA).
Spouses are only entitled to a maximum of one allowance of a total of NOK 195,000.
If you’re engaged in an agricultural business or slate production in addition to reindeer husbandry, the maximum limit for allowances for all industries combined is NOK 195,000.
There are special allowances for fishermen and seafarers. If you’re entitled to these, you can receive them in addition to the special allowance for reindeer husbandry.
Reindeer owner fund
The reindeer owner fund, also known as the Fund for liquidation and restructuring, offers a tax advantage to reindeer owners by allowing them to save money for the liquidation or restructuring of their reindeer husbandry business. This initiative addresses the ongoing issue of overgrazing in many reindeer grazing areas and the need to reduce the number of reindeer and reindeer owners.
The option to deposit money into the reindeer owner fund depends on whether the number of reindeer was reduced by at least one third during the year, and that the reason for the reduction was loss of animals, slaughter, or sale of live animals.
A reduction based on the sale of live animals only applies if the has confirmed in writing that the sale will lead to the necessary restructuring in the reindeer husbandry.
You’re entitled to a deduction in income for the amounts that are transferred to the reindeer owner fund.
At least NOK 30,000 must be set aside, and there is an option to set aside money in years when the conditions for loss, slaughter, and sale of live animals are fulfilled.
You can set aside a maximum of 80 percent of the annual profit per year.
For years when you withdraw money from the reindeer owner fund, this must be reported as income.
With your tax return, you must include a confirmation of the deposited amount by the bank. You must also include a declaration from the bank that they will continue reporting all deposits and withdrawals from the account in the future.
Interest from the account is only taxable when money is withdrawn.
The valuation rules
The value of goods and animals in reindeer husbandry is set by the valuation rules (in Norwegian only).
Supporting documents
You do not have to send us any supporting documents or include attachments with your tax return, but you must retain your accounts, vouchers, and any other supporting documents. You must be able to provide such supporting documents if we ask you to do so.