Advance tax for sole proprietorships
If you run your own business as a sole proprietorship or you're a partner in a business assessed as a partnership, you'll usually pay advance tax.
The tax must be paid during the year the income arises. The advance tax is determined based on the profit you expect to make, as well as other salary and pension income that you receive in addition to your business income, capital income, deductions and wealth. The tax percentage rate is usually between 34.4 and 49.6 percent.
What would you like to do?
New sole proprietorships and partners in a business assessed as a partnership, resident in Norway, can apply for advance tax if they expect to see a taxable profit.
There is no guarantee that you’ll be sent an invoice for advance tax. You yourself must apply to have your advance tax calculated.
You will need to include the following in the application form:
- Select the category “Business”.
- Choose the income applicable to you. “Other business” is most common.
- Enter expected profits in both “Profits from other business" and “Personal income - other business". You must estimate the amount as best you can. You can change this later if you find that your estimate is wrong.
The application will include all your taxable circumstances. This means that if you have income from employment in addition to business income, you'll often receive a combination of a tax deduction card and advance tax.
You’ll see the calculation of advance tax and any percentage rate for the tax deduction card at the bottom of the page. Calculated advance payment of tax will be divided into four payments and you’ll receive an invoice.
Budgeted deficits in a business will not be included in the tax deduction card. Final deficits are included in the tax return.
You'll be sent an invoice before each due date with the account number and KID number (customer identification number). You’ll receive this in your Altinn inbox.
If you do not have the invoice:
During a year, you’ll receive four invoices:
- 15 March
- 15 June
- 15 September
- 15 December
Make sure you pay your advance tax before the deadline
When an instalment is not paid by the payment deadline (the due date), the advance tax for the entire year must be paid. Interest on overdue payments will also accrue. Interest accrues from the due date and until the payment has been made. This means that we can collect the full amount of advance tax due for the current year through debt collection proceedings.
If you’re unable to pay
The advance tax must be paid by the due date. This applies even if you applied to change the tax when you’ve not received a reply to your application. Deferred payment of tax or other payment schemes are only granted in exceptional cases.
The Norwegian Tax Administration uses the information about your business income from the previous tax assessment to calculate your advance tax.
If your business income is higher or lower than expected, you should change your advance tax to avoid paying too much or too little advance tax.
You must estimate the amount of business income you expect to have this year as best you can.
In the form, you can find the category “Business”. “Other business” is most common. You’ll find the expected business income there and you can change the amount. Remember to make the change in both “Profits from other business" and “Personal income - other business".
If you receive sickness benefits from NAV, you must include this in a separate field. You’ll find sickness benefits for self-employed persons/businesses under the category "Business”.
More information about advance tax
You can adjust the allocation between advance tax and tax deductions. For example, you can adjust to a higher tax deduction on your employment income and lower advance tax amount, or vice versa. You cannot change the advance tax amount so that it’s lower than what you’ve already paid in advance tax this year. Adjustments between advance tax amounts and percentage tax deductions do not change the total calculated tax this year.
You must log in to make adjustments to advance tax and tax deductions. When you’re logged in, you’ll find the field for adjusting the advance tax at the bottom of the page - see below.
You'll receive one total advance tax amount, one tax return and one tax assessment.
Previously, your advance tax, tax return and tax assessment was issued from every municipality in which you were tax liable. Now, you’ll receive one claim that comprises all your tax affairs.
If you have any questions about advance tax, or if you want to apply to change your advance tax, print form RF-1102 and send by post to:
Postboks 9200 Grønland