Hiring out of vehicles and other items

When you also use your item and/or vehicle privately, and the gross rental income does not exceed NOK 10,000 during the year, you will not have to pay tax on your rental income. If it exceeds NOK 10,000, the income must be declared in your tax return. It makes no difference whether your hiring out is private or through an agent (an app or online service such as nabobil.no).

See the Directorate of Taxes’ statement of principles concerning tax liability in connection with the leasing of vehicles mediated via an online marketplace for more information (in Norwegian only).

Rate-based deductions

Costs incurred in connection with the car hire may be deducted from taxable rental income. Since costs associated with the private use of the vehicle are not deductible, the costs must be allocated so that only the proportion of the costs linked to the hiring out of the vehicle will be deducted.

To simplify the process, section 1-3-20 of the Regulations on the valuation of capital, income and deduction items, etc. (the 2023 valuation rules) sets out rules concerning deduction relating to the use of vehicles for business use. According to this provision, a “deduction is given for business use at the rate of NOK 3.50 per km (...) for a vehicle which is not taxed as a company car.” This deduction rate is based on the assumption that the taxpayer covers all costs associated with upkeep of the vehicle, including fuel. The rate does not apply in cases where the person renting the car covers fuel costs in addition to the rental charge.

The Directorate of Taxes has concluded that the rate may be used for the 2023 income year, but with a reduction in cases where the person renting the car pays for the fuel. In these cases, the rate must be reduced to NOK 2.80 per km. The same percentual reduction (that is, 20 percent) of the ordinary rate must also be applied in cases involving the hiring out of other means of transport where the lessee covers the cost of fuel. Ordinary rates for other means of transport are set out in section 1-3-20 of the valuation rules.

How do I enter this in my tax return?

You must declare your rental income as capital income if the gross rental income exceeds NOK 10,000. You must list the income in your tax return under the topic Other income - Other capital income received outside of an employment relationship and business activity. 

Deductions that can be deducted from the income

You can deduct expenses you’ve had in connection with the marketing of your rental objects. The expenses relating to marketing can be deducted from the gross rental income. This means it is the profit from your rental activity that must be entered as capital income in your tax return.

If you rent out your car, then you enter the deduction according to a rate, unless the car is considered a commercial vehicle. If the person you rent the car to (lessee) has covered the cost of fuel, you should use a rate of NOK 2.80 per km driven by the lessee.

Example:

If you rent out the car for 15,000 NOK and it was driven 1,000 km while it was being rented, your deduction from the rental income would be 2,800 NOK (1,000 km x 2.80 NOK ). This means that you enter 12,200 NOK in rental income.