Tax liabilities when staying and working abroad can be rather complicated and tedious. This overview provides you with a useful starting point in coming to grips with this tricky but important topic.
- Taxes most likely to affect an international researcher staying and/or working in Norway are income tax, wealth tax, and value added tax (VAT). Income and wealth are levied as direct taxes by the state, county, and municipality, value added tax is an indirect tax by the state. Since 2014, Norway no longer levies a tax on inheritances and lifetime gifts (avgift på arv og visse gaver).
- An international researcher's tax status in Norway depends on personal circumstances and possibly on the provisions of a tax treaty (regjeringen.no) between Norway and the country in which the researcher is or was a resident before arriving.
- The extent to which an individual is subject to direct taxation in Norway depends primarily on the individual's residence status according to Norwegian tax law. A tax-resident individual is subject to tax in Norway on his or her worldwide income and capital. A non-tax-resident is liable to tax on certain Norwegian-source income only, e.g. from employment exercised in Norway and income from real and personal property situated in Norway. As of 2014, no gift and inheritance taxes are levied in Norway anymore.
- An individual is deemed to be tax-resident in Norway if he or she stays in Norway for more than 183 days in any 12-month period (each day counts), or more than 270 days in any 36-month period. The individual will be regarded as resident from the calendar year when the aggregate stay exceeds 183/270 days.
- The fiscal year is the calendar year.
- Figures and rates quoted on this page refer to the income year 2016, i.e. the tax return due in 2017.
Who must pay income tax in Norway?
As a rule, anyone who receives a salary from a Norwegian institution is taxable on the same basis as Norwegian citizens.
- Guest lectures who's stay in Norway does not exceed one day, are usually not taxed.
- International researchers who are citizens of the Brazil, China, France, Hungary, Israel, Italy, Turkey, or USA may qualify for tax exemption for up to two years (three for China). Details vary and are specified in the tax treaties (regjeringen.no) with these countries (cf. Brazil Art. 20, China Art. 20, France Art. 21, Hungary Art. 20, Israel Art. 20, Italy Art. 20, Turkey Art. 20, USA Art. 15). For the Brazil, Israel, Italy, and USA it is a condition that the stay in Norway does not exceed two years. With China tax exemption is only granted to the extent remuneration is taxed in the other country.
How is income tax calculated?
Calculating income taxes is not a simple matter. A rough estimate may be derived from the following basic information:
- The point of departure is an individual's gross income which includes all payments from the employer, i.e. wages, salary for off-duty periods, vacation pay, bonuses and certain payments in kind.
- The main deductions that may be claimed are for:
- Expenses of employment (minstefradrag, usually claimed as a standard deduction of 43 % of the gross income, minimum NOK 4.000, maximum NOK 91.450, resulting in an individual's net income)
- Personal allowance (personlig fradrag, NOK 51.750 for single taxpayers, NOK 76.250 for married taxpayers, deducted from the net income)
- Parental allowance (foreldrefradrag, NOK 25.000 for the first child, NOK 15.000 for each additional child).
- Standard deduction for foreigners: In addition, most foreigners may claim a standard deduction for foreigners (skatteetaten.no) (10 % of gross Income, Maximum NOK 40.000, reducing taxes by about 2,8 %) the first two years they are tax-residents in Norway. However, researchers who receive a tax-free stipend covering extra expenses for living abroad, such as an EU mobility allowance, cannot claim the standard deduction for foreigners.
- Commuter deduction: Commuters may claim a special commuter deduction (skatteetaten.no)
- The basic tax rate is 25 % of the net income. The social security contribution is 8,2 % of the gross income.
- Bracket tax: Bracket tax consists of four steps. You will not pay any bracket tax on the first 159800 NOK of your personal income.
- Employers in Norway are obliged to deduct taxes from wages before employees are paid.
- Prior to or upon starting work at UiO, international researchers must apply for a tax deduction card from the local tax office. The tax deduction details can then be accessed online by the UiO Payroll Office. The tax card states what percentage of the income the employer must deduct.
- If work is started without a tax card, UiO is obliged to deduct 50 % which is generally more than would be deducted otherwise. You may claim reimbursement of the balance between 50 % and the correct rate from the tax office in your municipality (skatteetaten.no) once your tax deduction details have been established by the Norwegian Tax Authorities. Note: Since 1 January, 2015, UiO is obliged to submit monthly tax deduction reports to the Norwegian Tax Authorities and is no longer able to change tax deductions that have been made.
- Settlement of income and wealth taxes is finalized by means of a tax return (selvangivelse).
- The tax return is due by 30 April the year following the income year.
- Tax-liable individuals staying in Norway for a maximum of 183 days, may request an advance tax assessment from the local tax office.
- Wealth tax (formuesskatt) is charged on the net wealth of an individual per 1 January every year.
- Resident individuals are liable on their world wide wealth; non-residents on their Norwegian-situated assets only.
- The wealth tax rate is 0 % of up to NOK 1.400.000, and 0,85 % of the exceeding amount.
Value added tax (VAT)
- Value added tax is a general tax levied on sales (i.e. goods and services) within the country and on imports.
- The standard VAT rate is 25 % of the net price.
- Reduced rates apply to certain sales, notably to food (15 %) and to passenger transport, accommodation services, travel agents and cinema tickets (10 %).
Assistance in tax matters
- Every year in April, international researchers at UiO are offered assistance with completing the tax return. The event is announced on the supporte site for international researchers about one month in advance.
- Tax-related questions pertaining to employment at UiO may be addressed to the administrative contact person at the host department.
- For matters concerning tax deduction card, tax return, tax assessment and tax settlement the Oslo Tax Office (skatteetaten.no) or the Service Centre for Foreign Workers (sua.no) should be contacted directly.
- Independant opinion and comprehensive tax assistance may be obtained from the Norwegian Taxpayers Association (Skattebetalerforeningen) (skatt.no) (Norwegian). For contact information on taxpayer associations and tax experts in countries around the world, consult the website of the World Taxpayers Association (worldtaxpayers.org).