Accounting

General information concerning the annual accounts and bookkeeping obligation

Associations that has had assets worth more than NOK 20 million or an average number of employees exceeding 20 full-time equivalents during the year are obliged to submit annual accounts under section 1-2 first paragraph of the Accounting Act of 17 July 1998. If an enterprise is organised as a private limited company or foundation, the annual accounts obligation will be regardless of the size of the enterprise or whether commercial activity is carried on. 

The annual accounts obligation means that annual accounts and an annual report must be submitted in accordance with the provisions of the Accounting Act. The annual accounts must cover all activity that is carried on by the organisation. Under section 4-1 third paragraph of the Accounting Act, non-profit associations and foundations that are subject to the accounting obligation may deviate from some of the fundamental accounting principles in the Accounting Act and instead follow the “Generally accepted bookkeeping practice for non-profit organisations” published by the Norwegian Accounting Standards Board (NASB).

Organisations that are subject to the accounting obligation will also be subject to a bookkeeping obligation under section 2 first paragraph of the Bookkeeping Act of 19 November 2004. Organisations that carry on activity and are obliged to submit tax returns for wealth and income tax or tax returns for VAT are subject to the bookkeeping obligation even if they are not required to submit annual accounts. See section 2 second paragraph of the Bookkeeping Act. Provisions concerning bookkeeping, specification, documentation and retention of accounting documents are laid down in the Bookkeeping Act and associated regulations and must be followed by all entities that are subject to the bookkeeping obligation. 

Organisations may also be subject to the accounting obligation under special legislation or internal rules, for example the accounting and audit provisions for all organisational entities affiliated to the Norwegian Olympic and Paralympic Committee and Confederation of Sports (NIF) dated February 1, 2023 § 2-11 and Guide for sports teams with less than 5 million in turnover (in Norwegian only). It is recommended that all organisations prepare accounts, even if they are not formally obliged to do so. This is important, both to ensure internal control and to enable the enterprise to present accounts as documentation as and when necessary. The tax office may also impose the bookkeeping obligation on any entity that is considered to carry on commercial activity; see section 2 third paragraph of the Bookkeeping Act.

Bookkeeping, specification, documentation and storage of accounting documents

A description is presented below of key provisions from the Bookkeeping Act; see also the Bookkeeping Regulation of 1 December 2004. Everyone who is subject to the bookkeeping obligation must follow these provisions. The description is not exhaustive, and the individual must review the regulations in their entirety, if necessary with the professional assistance of an accountant or auditor, for example.

Sales documentation for cash sales

If an enterprise that is subject to the bookkeeping obligation makes cash sales, such sales must be registered on an ongoing basis on cash registers with a product declaration that satisfy the conditions of the Cash Register System Act and the Cash Register System Regulation. All cash register systems must have a product declaration. See the Cash Register Act section 5.  Cash sales must be registered to each operator if such a functionality exists. At the end of each day, a z-report must be prepared from each point of sale. It must either be printed out on paper or be stored electronically so that it's available at all times. See the Bookkeeping Regulation sub-chapter 5-3.  

Sub-chapter 5-4 of the Bookkeeping Regulation sets out certain exceptions from the requirements concerning the documentation of cash sales. Section 5-4-1 contains an exception for entities subject to the bookkeeping obligation that make occasional or itinerant cash sales not exceeding three times the National Insurance basic amount during a financial year. Instead of cash registers, etc., entities subject to the bookkeeping obligation which meet the conditions of the exception can document cash sales on an ongoing basis in a bound book in which the pages are pre-numbered, or through copies of dated and pre-numbered sales vouchers, including pre-numbered tickets; see section 5-4 first paragraph of the Bookkeeping Regulation.

Section 5-4-2 of the Bookkeeping Regulation contains an exception for sales made to the public at sports events, concerts, etc. However, the exception only applies to outreach sales to the public, not to sales from fixed sales outlets such as kiosks.

Charitable and benevolent institutions and organisations that make tax-free cash sales from a kiosk or café are not obliged to document said sale with a cash register system.

For more information on what a sales document must contain, see the Bookkeeping Regulation, sub-chapter 5-1.

Salary/tax deductions/employer’s national insurance contributions

Salary and other remunerations, as well as withholding tax and garnishments must be specified for each counterparty. The following information must be registered, see the Bookkeeping Regulation section 5-6:

  • National identity number
  • Name and position
  • Tax municipality
  • Table number and/or the deduction percentage stated on the tax deduction card

For each period in which withholding tax and garnishments are reported, the documentation must provide the following information for each taxpayer:

  • Date of payment and, if possible, the period to which the benefit relates
  • Gross benefit
  • Any supplements for payments in kind from which deductions must be made
  • Deductions for pension contributions, maintenance deductions and trade union fees not subject to withholding tax
  • Basis for the deduction
  • Amount of withholding tax and mandatory deductions (garnishments)

For employees who are entirely or partly remunerated on the basis of number of hours worked, the following additional information must also be documented for each employee:

  • Date on which the work was performed
  • Number of hours for the relevant date
  • Total hours for the period concerned

When employer’s national insurance contributions are to be paid on the benefits, the benefits that are subject to contributions must be presented collectively, per contribution rate and zone; see section 3-1 first paragraph number 9.

Storage of accounting materials

Accounting materials must be stored for 5 years after the end of the financial year, see section 13 first paragraph numbers 1 to 4. This applies to the following accounting materials:

  1. Annual accounts and other mandatory accounts, annual reports and auditors’ reports
  2. Specifications of mandatory accounting reports (see section 5 of the Bookkeeping Act)
  3. Documentation of posted and deleted information, documentation of audit trails, etc. and the balance sheet
  4. Numbered letters from the auditor.

Accounting materials as referred to in the Bookkeeping Act section 13 first paragraph, nos. 5 to 8, shall be stored in Norway for three years and six months after the end of the financial year. This applies for example to agreements concerning the activity, with the exception of agreements of minor importance, and correspondence which provides important additional information in connection with posted information.

Regulations for organisations which are not subject to the bookkeeping obligation under the Bookkeeping Act

Salary

If an organisation is not subject to the bookkeeping obligation and does not apply the provisions in the bookkeeping legislation (see above), a payroll list must be compiled for each recipient of salary or other remuneration in accordance with section 5-11-2 of Regulation No. 1766 of 21 December 2007 pursuant to the Tax Payment Act.

Each list must include:

  1. a) national identity number
    b) name and position
  2. c) table number and/or the deduction percentage stated on the tax deduction card

If the tax deduction card is not made available to the employer and the employer does not obtain information that must be given in the tax deduction card in any other way, the employer’s documentation must state the name and number of the municipality in which the remuneration recipient (the taxpayer) claims to be resident as of 1 November in the year before the deduction year. If the recipient of the remuneration is a foreigner and was not resident in Norway on 1 November in the year before the deduction year, the documentation must state the municipality in which the recipient concerned was resident at the time of arrival in Norway.

If the employer has received an order concerning garnishments under Chapter 14 of the Tax Payment Act, the documentation must also state the following:

  1. a) who issued the order,
    b) when the order was received,
    c) the amount that is to be covered by the garnishment,
    d) the income year that the garnishment order concerns, and
    e) the deduction percentage or amount that is to be deducted for each payment period.

For each period in which withholding tax and mandatory deductions (garnishments) are reported, the following information must be specified for each employee:

  1. a) date of payment of benefits and, if possible, the period to which the benefit relates,
    b) gross benefit, if specifying the number of reimbursed hours is relevant,
    c) any supplements for payments in kind from which deductions must be made,
    d) deductions under section 5-9 of the Tax Payment Act,
    f) the basis for deductions, and
    g) the amounts deducted as withholding tax and mandatory deductions.

For employees who are entirely or partly remunerated on the basis of number of hours worked, the following additional information must also be documented for each employee:

  1. a) date on which the work was performed,
    b) number of hours for the relevant date, and
    c) total number of hours for the period concerned.

Documentation of salary, etc. must be issued no later than the date on which it's possible to receive the benefits concerned.

Ordinary salary during holiday, holiday pay and salary before Christmas must be included in the list. Salary and remunerations that as of the date of payment are below the applicable minimum thresholds for the calculation of withholding tax, the calculation of employer's national insurance calculations or the salary reporting obligation must also be entered in the payroll list.

Salary etc., as previously mentioned, must be included in the payroll list no later than the date of payment or the date on which the recipient is entitled to the payment. Supplements for the value of payments in kind and gratuities must be entered in the list for each deduction case.

The documentation must be presented so as to facilitate inspection by the competent supervisory authority. When employer's national insurance contributions are payable on benefits, the benefits concerned must be specified separately, and be presented collectively, per contribution rate and zone.

The documentation must be stored in Norway for five years after the end of the financial year.

As previously mentioned, the organisation may be subject to the bookkeeping obligation under special legislation or internal rules.