Enterprises with employees who conduct financial activities must pay financial activity tax on payrolls and on the enterprise’s general income. See: Financial activity tax - the Tax Administration

Enterprises with no employees are not liable to pay financial activity tax, neither on the salary nor profit basis.

Value added tax

The turnover and intermediation of insurance services are considered financial services, and they are exempt from value added tax, see section 3-6, letter a, of the VAT Act. For more information on this, please see the guide Merverdiavgiftshåndboken (Value Added Tax Handbook, in Norwegian only) - the Tax Administration. Insurance companies must calculate value added tax in the case of reverse charge on remotely deliverable services that are subject to VAT and that have been purchased outside of the value added tax area, see section 3-30 of the VAT Act.

Tax rules and reporting for life insurance and pension undertakings

The tax rules for life insurance and pension undertakings are based on the principle that customer assets must be taxed upon payment on the customer’s side. The aim is therefore a neutral taxation of customers’ assets. This means that dividends belonging to the customers are considered taxable income to the same extent as taxable deductions are granted when dividends are allocated to the customers. This is done by applying the accounting rules in the taxation of customer assets. For taxation of the company’s own assets, ordinary tax rules apply.

Information relating to group contributions

Special rules apply to group contributions in life insurance and pension undertakings, see section 8-5, subsection 5 of the Taxation Act. The main rule is that group contributions from a subsidiary in a tax group that is owned by customer assets must be processed according to accounting rules for tax purposes. This means that group contributions from a company owned by customer assets will not normally have any effect on the accounting or taxation results. Group contributions are normally only recognised in the balance sheet, so that account-based values and tax values are linked.

In certain cases, a subsidiary can be owned by both customer and company assets. In these cases, group contributions must be allocated according to the ownership share. Thus, only the share owned by the company assets will have a tax effect in the tax return.

The granting company will be able to grant group contributions with a tax effect independently of the processing in the life insurance and pension undertaking. This means that there can be a difference between the amount reported by the granting company as group contributions granted with a tax effect, and the amount processed by the life insurance and pension undertaking as received group contributions with a tax effect in their tax return.

Specific information relating to policy changes

Section 8-5, subsection 8, of the Taxation Act sets out special rules for the tax treatment of changes in accounting principles. The rules imply that all changes based on accounting principles (including direct changes to equity) are taxable or deductible. This is contrary to general tax rules that apply to the company assets. The rule must be limited to exclude simple accounting mistakes. Such corrections must be done by submitting a new tax return for the income year affected by the mistake.

See further information in the guide Skatte-ABC  - the Tax Administration (in Norwegian only) under the topic Forsikringsforetak – livsforsikrings- og pensjonsforetak (Insurance companies – life insurance and pension undertakings ).

Tax reporting

The result and balance layout in the business information follows the schemes for public accounting and reporting to supervisory authorities for insurance companies (Forsikringsforetakenes Offentlige Regnskaps- og Tilsynsrapportering), FORT, and pension undertakings, (Pensjonskassenes Offentlige Regnskaps- og Tilsynsrapportering), PORT, rather than the statement layout set out in the annual accounts regulations for life insurance or pension undertakings.

The business information for life insurance companies and pension undertakings must be submitted by all companies that fall under the scope of section 1, subsection 1 of Regulation No. 1824 of 18 December 2015, relating to the annual financial statements for life insurance companies (including Norwegian branches of foreign life insurance companies), and Regulation No. 1457 of 20 December 2011 on annual accounts for pension undertakings. From and including the 2023 income year, the tax return must be submitted in the Tax Administration's new tax return solution.

Companies that have realised securities within the company portfolio with a taxable gain/deductible loss or have received taxable profit/dividends must report this in the tax return under the topic “Finance”. If the company portfolio has ownership interests in a business assessed as a partnership, this must be stated in the tax return under the topic “Wealth and income in a business assessed as a partnership”.

For more information about the obligation to submit other information in the tax return, see the description of Chapter 8 of the Tax Administration Act in the guide Skatteforvaltningshåndboken (Tax Administration Handbook - in Norwegian only).

Tax rules and forms for non-life insurance undertakings

Non-life insurance undertakings may claim tax deductions for the following insurance obligations according to section 8-5, subsection 1, letter a of the Taxation Act:

• provisions for non-accrued gross premium pursuant to section 3-5, subsection 1 of Regulations of 18 December 2015 No. 1775 relating to Annual Financial Statements for Non-Life Insurance Undertakings
• provisions for uncovered risk pursuant to section 3-5, subsection 2 of Regulations of 18 December 2015 No. 1775 relating to Annual Financial Statements for Non-Life Insurance Undertakings
• provisions for insurance liabilities pursuant to section 3-5, subsection 3 of Regulations of 18 December 2015 No. 1775 relating to Annual Financial Statements for Non-Life Insurance Undertakings

As a rule, the taxation of non-life insurance undertakings follows general tax rules. For more information about the taxation of non-life insurance undertakings, see the guide Skatte-ABC - the Tax Administration  (in Norwegian only) under the topic “Forsikringsforetak – skadeforsikringsforetak” (Insurance companies - non-life insurance undertakings).

Tax reporting

Business information for non-life insurance undertakings must be submitted by all companies that fall under the scope of section 1-1 of Regulations of 18 December 2015 No. 1775 relating to Annual Financial Statements for Non-Life Insurance Undertakings and Norwegian branches of foreign non-life insurance undertakings. From and including the 2023 income year, the tax return must be submitted in the Tax Administration's new tax return solution.

The result and balance layout in the business information follows the schemes for public accounting and reporting to supervisory authorities for insurance companies (Forsikringsforetakenes Offentlige Regnskaps- og Tilsynsrapportering), FORT, rather than the statement layout set out in the annual accounts regulations for life insurance or pension undertakings.

For more information about the obligation to submit other information in the tax return, see the description of Chapter 8 of the Tax Administration Act in the guide Skatteforvaltningshåndboken (Tax Administration Handbook - in Norwegian only).

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