Norway Accounting Questions Answered

What is the corporate tax rate in Norway?

Norway's corporate income tax (selskapsskatt) is 22% flat on all taxable profits of AS companies. Financial companies pay 25%. When profits are distributed as dividends to personal shareholders, the combined effective rate rises to approximately 51.5% due to the Aksjonærmodellen's 37.84% tax on dividends.

How does the Norwegian Aksjonærmodellen shareholder model work?

The Aksjonærmodellen taxes dividends from Norwegian AS companies to personal shareholders at an effective rate of 37.84% on amounts above the skjermingsfradrag (risk-free return). The gross-up factor 1.72 is applied to the net dividend before taxing at 22%. Dividends below the skjermingsfradrag threshold are completely tax-free.

How does Norway's Fritaksmetoden (participation exemption) work?

Fritaksmetoden exempts 97% of dividends received by a Norwegian AS from other qualifying Norwegian or EEA companies from corporate tax. The remaining 3% is taxed at 22%, producing a 0.66% effective rate. Capital gains on selling qualifying shares are 100% exempt. This makes holding company structures extremely tax-efficient in Norway.

When do I need to register for MVA (VAT) in Norway?

You must register for Norwegian MVA (merverdiavgift) when your taxable turnover exceeds NOK 50,000 within any 12-month period. Registration is done via Altinn.no. Once registered, you charge MVA on sales (25%, 15%, or 12% depending on the type of supply) and can recover input MVA on business purchases.

What are the MVA (VAT) rates in Norway?

Norway has three positive MVA rates: 25% standard (most goods and services), 15% for food and non-alcoholic beverages from shops, and 12% for passenger transport, hotel accommodation, cinema, and sport events. Exports are zero-rated. Financial services, healthcare, and education are exempt.

How do I set up an AS company in Norway?

Setting up a Norwegian AS requires NOK 30,000 minimum share capital, registration via Altinn.no to Brønnøysundregistrene (BRREG), and a registration fee of NOK 5,100 (online). The process typically takes 1–3 business days. You need at least one shareholder and a board member — both can be the same person.

Should I use an ENK or AS for my Norwegian business?

For most Norwegian businesses, an ENK (Enkeltpersonforetak) is simpler and cheaper below approximately NOK 500,000 annual profit. Above that threshold, an AS typically saves significant tax by retaining profits at 22% rather than paying trinnskatt immediately. The AS also provides limited liability protection.

Should I take salary or dividends from my Norwegian AS?

Norwegian AS owners can take income as lønn (salary, taxed at personal rates up to 47%) or utbytte (dividend, taxed at 37.84% effective rate above skjermingsfradrag). Salary also generates pensionsgiving income and skjermingsgrunnlag. Most owners find an optimal mix at pension-generating salary levels with dividends for the remainder.

What are the Norwegian tax classes for personal income tax?

Norway's personal income tax has two main classes: Class 1 (standard, applies to almost everyone) and Class 2 (higher personal deduction for single-income households, largely abolished after 2019 changes). Most business owners and employees are in Class 1. The skattekort (tax deduction card) determines how much PAYE is withheld by employers.

What are the employer obligations for a Norwegian AS company?

Norwegian employers must pay 14.1% arbeidsgiveravgift (employer payroll tax) on top of gross wages, file monthly A-melding payroll reports by the 5th of each month, provide mandatory OTP tjenestepensjon (minimum 2% of qualifying wages), pay holiday pay (feriepenger) of minimum 10.2%, and cover sick pay for the first 16 days of absence.