Who is entitled to tax limitation?

Tax limitation can be granted to recipients of the following means-tested benefits from the Norwegian National Insurance Scheme:

• transitional benefits pursuant to section 16-7 of the National Insurance Act (formerly family carer)
• transitional benefits for a surviving spouse
• pension pursuant to section 16-7 of the National Insurance Act (formerly family carer)
• surviving spouse’s pension

A single mother or father who receives transitional benefits is not covered by the tax limitation rules.

Tax limitation will be granted if the following applies:

• does not exceed the thresholds set annually by the Norwegian Parliament. The following amount limits apply for 2022:
  • NOK 147,450 for single people
  • NOK 135,550 for each spouse
  • NOK 271,100 combined for spouses, registered partners and spouse-equivalent cohabitants

When the calculation basis (general income after the corrections mentioned above) exceeds the income limit, the tax on general income and national insurance contributions must be limited to 55 percent of the calculation basis that exceeds the income limit.

Calculation of income

The basis for calculating tax limitation is your general income (net income). Any addition to general income in the form of a distribution from a general partnership is deducted from your tax return. To this are added any:

• special allowance
• deductible tax-free return for share dividend and/or gains on shares

A standard addition to income of 1.5 percent of any net wealth in excess of NOK 200,000 for single people/NOK 100,000 for each spouse is then added. When calculating the addition to income, the taxable value of your primary dwelling (that is, your own home where you were living at the end of the income year) is not included in the net wealth. 'Primary dwelling' here also includes farmhouses and their naturally associated plots.

Tax limitation in connection with low general income is automatically granted during the assessment process.

Types of tax limitation

The tax limitation covers

• tax on general income
• the two bottom rungs of the bracket tax
• national insurance contributions

The tax limitation does not cover

• the three highest rungs of the bracket tax
• net wealth tax