Expatriate tax ebook - Norway

Tax planning opportunities

Gross-deal method
Expenses paid by the employer covering board, lodging and travel to a home abroad are liable to taxation. The employee may choose between the 10% standard deduction limited to NOK 40,000, and a deduction based on actual expenses (also including personal and family related expenses). With regards to travel expenses, the deductible amount will be reduced by NOK 13,700.

Net-deal method
Expenses paid by the employer covering board, lodging and travelling are not liable to taxation with the exception of any surplus from allowances received. Expenses covered by the employee himself are deductible. In addition he may claim personal and family related expenses deducted. With regards to travelling expenses, the amount deductible will be reduced by NOK 13,950. When applying this method, the 10% standard deduction is not applicable.

Free board will be considered taxable income regardless of method.

The 10% standard deduction
A resident for tax purposes may be granted a standard deduction of 10%, limited to NOK 40,000 for the two first assessments. Subjects to limited taxability may be granted a similar deduction for an indefinite period of time. The standard deduction will replace certain other deductions, such as interest on debt, deficit, board and lodging.

Employee resident within the EEA
EEA-residents, who are working temporarily in Norway and are tax liable as resident in Norway, may choose between the gross-deal method and the net-deal method.

If the gross-deal method is chosen, the taxpayer may choose between the 10% standard deduction and a deduction based on actual expenses (including personal and family related expenses).

Employees with limited tax liability may also choose between the gross-deal method and the net-deal method. When choosing the gross-deal method, the employee may either claim the 10% standard deduction or a deduction for expenses incurred from commuting. In addition he may on certain terms claim personal and family related expenses deducted.

Employee resident outside the EEA
For employees resident outside the EEA, staying temporarily in Norway and who are liable to be taxed as a resident, only the gross-deal method is applicable.

Employees with limited tax liability may choose between the gross-deal and the net-deal method. When choosing the net-deal method, the employee may not claim the standard deduction, but this method may be used on allowances received from the employer. Expenses paid by the employee himself are not deductible.

Information about Norway:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities