Car - rates for category 2 company vans and small trucks
The private use of a company car is a taxable benefit that is also subject to withholding tax. Generally, the benefit is calculated using the standard rules based on the car’s list price as new.
If you’ve used your employer’s commercial vehicle for private travels, special rules apply when calculating the value of the benefit. By commercial vehicle in this context, we mean category 2 vans and lorries with a total weight of up to 7,501 kilograms.
In order to use the special rules, you must have a work-related need to use this type of car. If you do not need, for example, a category 2 van for work, the benefit from the private use of the van shall be calculated according to the standard rules.
There are two alternative methods for calculating the tax benefit of the private use:
- the standard method (with a base deduction from the list price)
- kilometre rate (individual valuation)
The standard method (with a base deduction)
The private benefit resulting from the use of commercial vehicles will be estimated using the standard method for ordinary company cars, but with a special base deduction in order to take into consideration that commercial vehicles are less suited to private use than ordinary company cars. The reduction is applied by reducing the list price by 50 percent, with an upwards limit of NOK 150,000. You cannot use both a reduction of the calculation basis for an electric car, and a reduction in the form of a base deduction for category 2 vans and small lorries for the same car.
You’ll not be granted a reduction for use in connection with work in excess of 40,000 km in addition to the base deduction. You can read more about this in the guide Skatte-ABC (in Norwegian only) and point 6.2.2 under the topic "Bil – Privat bruk" (Car - private use).
Kilometre rate (individual valuation)
The private benefit may also be estimated based on the actual use (kilometre rate). When calculating the value of a benefit using the kilometre rate, there must be an electronic vehicle logbook managed by the employer. The electronic vehicle logbook must document the total distance travelled, as well as the total distance travelled for work, so that the difference equals the number of kilometres the car is used privately. The opportunity to calculate the benefit using the kilometre rate applies to all private use, and not just travels to and from work.
For 2021, the rate for calculating the private benefit based on actual use will be NOK 3.40 per kilometre regardless of distance travelled.
The employer choses the method with an electronic vehicle logbook. The logbook shows that you have driven 5,000 kilometres that are not for work. That includes private use and travels between your home and your permanent place of work. When you drive between your home and work assignments, this is considered to be for work. The calculation is as follows: 5000 km x kr 3.40 = - NOK 17,000. In this case, NOK 17,000 is considered taxable income.
The employer choses the method with taxation based on standard rules. You have a work-related need for having a car with a list price of NOK 350,000 at your disposal. A base deduction of 50 percent must be deducted from the list price, but no more than NOK 150,000. This gives us the following calculation:
NOK 350,000 – NOK 150,000 = NOK 200,000
NOK 200,000 x 30% = NOK 60,000
You drive 10,000 kilometres for purposes not related to work, and the car has a list price of NOK 200,000. If the employer chooses the option with an electronic vehicle logbook, the taxable income is NOK 34,000. If the employer chooses to use the standard rules based on list price to calculate the benefit, the taxable income is NOK 30,000 ((NOK 200 000 x 50%) x 30%).
If you drive for 16,000 kilometres in a car that was registered on 11 November 2012 and that has a list price of NOK 400,000, the taxable income is NOK 54,400 if the employer chooses the option with an electronic vehicle logbook. If we use the standard rules, the calculation is as follows:
NOK 400,000 x 75% = NOK 300,000
NOK 300,000 – NOK 150,000 = NOK 150,000
NOK 150,000 x 30% = NOK 45,000