Insurance undertakings
Insurance undertakings consist of life insurance undertakings, pension undertakings, and non-life insurance undertakings.
Special tax rules apply to insurance undertakings.
Does this apply to me?
This applies to undertakings that are authorised by the Financial Supervisory Authority of Norway to carry out insurance activities.
Life insurance includes, among other things, insurance policies that compensate for financial loss in the event of death, disability, or old age.
Pension undertakings are pension funds and defined contribution companies that manage collective pension schemes.
Non-life insurance includes, among other things, insurance against damage or loss of property, insurance against liability for damages or costs, accident insurance, health insurance and other personal insurance that’s not life insurance.
General information regarding insurance matters
Tax reporting
From and including the 2023 income year, all companies must submit the tax return via an accounting or annual accounts system.
The result and balance layout in the business information to the tax return will follow Statistics Norway’s scheme for public accounting and reporting to supervisory authorities for insurance undertakings. This is called the scheme for public accounting and reporting to supervisory authorities for insurance undertakings (FORT) and the scheme for public accounting and reporting to supervisory authorities for pensions funds (PORT).
Overview of where the items in the forms belong in the new tax return
Items, fields and topics in the new tax return for businesses.
An updated code list for the result and balance layout in the business information that replaces the previous income statements for insurance undertakings can be found under “Kodelister som gjelder mange skjemaer” (code lists that apply to several forms, in Norwegian only). Download the spreadsheet “Kodeliste Resultatregnskap og balanse” (code list result and balance accounts, in Norwegian only).
Insurance services are considered financial services and are exempt from value added tax. More information: Merverdiavgiftshåndboken – Skatteetaten (the VAT handbook, in Norwegian only).
Even if insurance services are exempt from value added tax, the undertaking can still have vatable turnover. More information: Difference between exemptions and exceptions from VAT.
Remember that when purchasing some remotely deliverable services from abroad, value added tax must be calculated on reverse charges. See our guide: Value added tax (VAT) on services the business has purchased from abroad
Insurance undertakings and pension funds must pay financial activity tax. More information about financial activity tax.
Insurance companies and pension funds that are mutual or self-owned must pay net wealth tax on their positive net wealth.
Rates for companies that must pay net wealth tax (lovdata.no, in Norwegian only).
Specific information regarding life insurance undertakings and pension undertakings
Life insurance undertakings and pension undertakings fall under their own tax rules in section 8-5 of the Taxation Act (lovdata.no). The tax rules are built on the principle that customer assets be taxed upon payment to the customer. This is done by using the accounting rules as a basis for the taxation of customer funds.
Taxation of the company's own funds follows the usual tax rules.
See more detailed information: Forsikringsforetak – livsforsikrings- og pensjonsforetak (Skatte-ABC) (Insurance undertakings – life insurance undertakings and pension undertakings, in Norwegian only)
Specific rules apply to group contributions in life insurance and pension undertakings.
This means that group contributions from subsidiaries in tax groups that are owned by the customers’ funds shall not be given tax effect. Group contributions are normally only recognised in the balance sheet, so that account-based values and tax values are linked.
In some cases, a subsidiary can be owned by both customer and company assets. In such cases, the group contribution must be divided by ownership interest, and only the part owned by the company will have a tax effect in the tax return.
The ceding company will be able to make group contributions with tax effect regardless of the treatment in the life insurance and pension undertaking. This means that there may be a difference between what the company has reported as made in group contributions with tax effect, and what the life insurance and pension undertaking treats as group contributions received with tax effect in its tax return.
In the case of mergers and demergers, tax values are determined in line with the accounting rules for the acquiring company for the assets owned by the customer assets of life insurance undertakings and pension undertakings.
The transfer of assets between customer and company assets in life insurance undertakings and pension undertakings is taxable or deductible.
All changes to accounting policy, including changes directly to equity, in the investment choice and collective portfolio are taxable or deductible.
The rule must be limited to pure accounting errors. Such corrections must be made when submitting a new tax return for the income years to which the error relates.
Life insurance undertakings and pension undertakings may be entitled to a standard deduction from their income. The deduction is related to the fact that the undertaking is entitled to a share of the return in certain cases related to the management of the assets in the unit link investment portfolio and the group portfolio.
This return may include share income that’s normally covered by the tax exemption method, but which is taxed in full on customer funds. The standard deduction is intended to correct for such income to ensure equal treatment with other activities.
Sjablongmessig fradrag i inntekt (Skatte-ABC) (Standard deductions from income, in Norwegian only)
Reporting on investments
Customer assets (the investment choice and collective portfolios) in life insurance and pension undertakings are taxed under section 8‑5, subsection 4, of the Taxation Act. For shares and other financial products included in the customer assets, the undertaking does not need to provide information in the tax return about each individual investment, including opening and closing balances, gains, losses, or dividends. However, the undertaking must provide information about investments that belong to the company assets (the company portfolio).
Reporting ownership interests in businesses assessed as partnerships and foreign businesses assessed as partnerships
Interests in businesses assessed as partnerships that belong to customer assets (the investment choice or collective portfolio) are taxed based on the accounts, see section 8‑5, subsection 4, of the Taxation Act. If all interests are owned by life insurance or pension undertakings, it’s not necessary to submit a company return or a partner statement, see section 8‑9 of the Tax Administration Act. The same applies to a foreign business assessed as a partnership when all Norwegian interests are owned by life insurance or pension undertakings, see section 8‑9‑2 of the Tax Administration Regulation. The undertaking must still provide information about the assets in the tax return.
Specific information for non-life insurance undertakings
Premium income in non‑life insurance undertakings is recognised as income at maturity under section 14‑28, subsection 3, of the Taxation Act (lovdata.no). Non‑life insurance undertakings are allowed to deduct certain insurance liabilities under section 8‑5 of the Taxation Act (lovdata.no). Apart from this, ordinary tax rules apply.
For non‑life insurance undertakings that apply the IFRS 17 accounting standard in the company financial statement, the Ministry of Finance has stated that the undertakings may use provisions calculated under IFRS 17 as the basis for tax purposes from and including the 2023 income year, and until further notice.
The Ministry has announced that it’s reviewing the rules, and the interpretation statement of 9 February 2024 will apply until this work is completed. This means that non‑life insurance undertakings may use IFRS 17 when calculating provisions for tax purposes until that time.
Dates and deadlines
Businesses must submit the tax return with the business information by 31 May at the latest.