Taxes 2024

Prop. 1 LS (2023–2024)

Proposition to the Storting (Bill and Draft Resolution)

For the 2024 Budget Year

Recommendation from the Ministry of Finance of 29 September 2023, approved in the Council of State on the same date. (Støre Government)

Dokumentet på regjeringen.no

1 Main tax policy features

1.1 The tax policy objectives of the Government

Taxes make it possible to finance universal and decent welfare schemes, which are crucial in ensuring that Norway is a safe and good country in which to live. Tax policy shall also contribute to fair distribution and shall facilitate economic growth, as well as high health and environmental standards. These value-based goals guide the Government’s efforts, and are particularly important in these uncertain times. As a supplement to universal public services and good welfare schemes, the tax system is one of the tools the Government can use in its efforts to reduce the disparities between people, both socially and geographically.

The Government is aiming for its tax policy to provide a favourable framework for work and economic growth all over Norway, which promotes investment in new businesses. Businesses and industry need a stable and competitive tax framework. The negative effects of taxes differ greatly between tax types. It is important for the government to prioritize taxes with the least possible disadvantages. Environmental taxes at the right level, such as taxes on emissions of greenhouse gases, have a positive effect on socio-economic efficiency. Properly designed resource rent taxes will give the community a share in the extraordinary return that can arise from the use of our natural resources, and provide an overall better tax system.

In Norway, we have a high level of publicly funded welfare benefits. It requires that the tax and levy system generate large revenues. A broad and robust tax base is necessary to safeguard future tax revenues and makes it possible to keep relatively low rates, thereby limiting the economic costs of taxation. A broad tax base is also necessary for the tax system to have the intended distributional effect.

In the 2023 budget, expenditure increased in many areas, including the National Insurance Scheme and the reception and integration of refugees. Moreover, large appropriations were made for household electricity subsidies and other electricity measures. Ad hoc taxes – in the form of the high-price contribution and increased employer’s National Insurance contributions on salaries above NOK 750,000 – were introduced in order to redistribute more of the extraordinarily high power generation revenues and to finance expenditure increases. At the same time, the direct redistribution contribution of the tax system was strengthened by shifting more of the tax burden to high-income and high-wealth taxpayers.

The Government aims to make tax rules simple for taxpayers to comply with and simple for the tax authorities to enforce. Administrative costs for taxpayers and the public sector can be kept down by making the most of the opportunities provided by digitalisation. The Government is reviewing the regulations, with the aim of further simplifying these for business and industry.

1.2 Main features of the tax programme for 2024

Executive summary

The tax programme for 2024 is adapted to the economic situation described in Report No. 1 (2023–2024) to the Storting, National Budget 2024. It is expected that inflation will come down, while employment will remain high and unemployment low.

The full-year effect of the overall programme for 2024 entails tax relief of about NOK 6.0 billion. Of this, the removal or phasing out of the temporary tax increases in the adopted 2023 budget amounts to NOK 5.1 billion (the high-price contribution and an extra employer's contribution on salaries above NOK 750 000).[1] It is estimated that about 85 per cent of taxpayers will receive about unchanged or lower income tax from the government's proposal for 2024. The two adopted budgets since the change of government were estimated to give about unchanged or lower tax for about 8 out of 10 taxpayers.

The Hurdal Platform emphasises a predictable and responsible business tax policy. Resource rent taxes on the utilisation of our joint natural resources are based on a strong economic rationale. Neutral resource rent taxes ensure that society receives a share of the resource rent without impeding investment and growth. For a private investor, the return per unit of invested capital is the same before and after tax. This enables everyone, and not just a select few, to share in the extraordinary returns on these joint natural resources, while making it no less attractive than before to invest in new projects that utilise such natural resources.

The principle that the society as a whole should receive a share of the return from the utilisation of our common natural resources has served Norway well. In the Hurdal Platform the Government states clearly that local communities and the society as a whole should receive a fair share of the value that is created from utilising our common natural resources. The wind power sector has, similar to the hydro power, petroleum and aquaculture sectors, exclusive access to valuable areas for business activity. By utilising a location-specific natural resource the wind power sector can generate a resource rent, partly because the wind conditions in Norway are favourable, partly because the access to the resources are limited by the licensing system. The electricity prices are in the longer term estimated to exceed the levelized cost of energy for onshore wind power. It is therefore expected a resource rent in the sector over time. In the coming years, buyers of electricity will realise parts of the resource rent through existing fixed-price agreements.

The Government believes that this is an appropriate time for introducing a resource rent tax on onshore wind power and proposes to introduce a resource rent tax with an effective tax rate of 35 pct. as of the income year 2024. The proposal has been on public consultation. The proposal includes generous transitional arrangements for existing wind farms. The introduction of a neutral resource rent tax from 2024 will provide the sector with a predictable policy framework and facilitate development of profitable wind power projects in the years to come. The proposal is described in more detail in Prop. 2 LS (2023–2024) Resource rent tax on onshore wind power.

The temporary tax increases in the form of high-price contributions and additional employer’s National Insurance contributions adopted in the 2023 budget were justified by the special situation prevailing in Norway, like in other European countries, with extraordinary power sector revenues and increased expenditure in many areas.

The high-price contribution was necessary and appropriate in order to redistribute more of the extraordinary power sector revenues as a result of the extremely high electricity prices in parts of Norway in 2022 and into 2023. The Government has made it clear that the high-price contribution (excise duty on power production) will be phased out by the end of 2024 at the latest. Power producers have emphasised that the high-price contribution creates uncertainty and impairs the incentives to invest. This applies regardless of whether the power prices are at a level that actually generates revenue for the state. Going forward, it is important to facilitate economically profitable investments in renewable power. The Government believes that the extraordinary situation we were facing last year, is no longer applicable to the same extent. The Government therefore proposes to abolish the high-price contribution with effect from 1 October 2023.

The Government also proposes that the threshold for the additional employer’s National Insurance contributions be increased to NOK 850,000 in 2024. This is a first step in the phasing out of this ad hoc tax.

The Government proposes to increase taxes on non-ETS emissions in line with a linear increase to NOK 2,000 at 2020 prices in 2030. With such a long-term target and gradual movement towards a specified emissions price, businesses and consumers will be able to adapt over time. For 2024, this means that taxes on non-ETS greenhouse gas emissions will be increased by 19 per cent. The tax base will be expanded, and reduced rates will be increased in several areas – including an increase in the waste incineration tax to 75 per cent of the general rate. The sales requirement for biofuels in road traffic will be increased from 17 per cent to 19 per cent in 2024. For reporting on Norway's obligations under the Climate Act, reference is made to the special appendix to Prop. 1 S (2023–2024) under the Ministry of Climate and Environment (2023–2024) The Government's climate status and plan. Both the increased sales requirement and the CO₂ tax increase will in themselves lead to higher fuel prices. The government wants the green transition to be socially and geographically fair. To help keep the cost of living down for households, an amount in excess of the cost increase for households as a whole will be returned to them. This will be achieved by significantly reducing the road usage tax on petrol and diesel, and by reducing the traffic insurance tax on fossil fuel vehicles by NOK 400 per year.

In terms of personal income tax, the Government proposes moderate modifications with redistributional effect. On average, people on low and medium incomes will pay less or about the same amount of tax, while people on high incomes will pay more tax. In total, net tax relief will be about NOK 400 million. The personal allowance will be increased by NOK 8,650 from 2023, and National Insurance contributions on wages, benefits and self-employment income will be reduced by 0.1 percentage points. The measures in the action zone in Northern Troms and Finnmark will be simplified and clarified by increasing the Finnmark allowance to NOK 30,000 and making the tax rate in bracket 3 of the bracket tax uniform across the whole country. The trade union allowance and the travel allowance will be price-adjusted.

A study by NTNU Social Research shows that the method for calculating the market value of commercial property is not sufficiently accurate. In particular, commercial property in rural areas is overvalued. The Government is committed to ensuring that the valuation of commercial property for wealth tax purposes is as accurate as possible, and will ask Statistics Norway to consider modifications to the calculation method. In the short term, it is proposed to increase the commercial property discount rate by 1 percentage point for properties located outside the major cities of Oslo, Bergen, Trondheim and Stavanger in order to mitigate the clear regional differences in model accuracy revealed by the report.

Other proposed tax changes

The Government is also proposing other changes to the tax system with effect from 2024:

The upper limits on the basic allowance are kept unchanged in nominal terms. The additional revenues are used to increase the personal allowance.

The bracket tax thresholds are modified, and the tax rates in brackets 3 to 5 are increased in line with the reduction in National Insurance contributions on wages, benefits and self-employment income.

The tax-free subsistence allowance for accommodation in temporary workers’ sheds (the sheds allowance) is increased from NOK 250 to NOK 400.

The tax-free subsistence allowance for long-distance lorry drivers is increased from NOK 350 to NOK 400.

A special allowance for seafarers is granted to seafarers with a three-week rotation or more, as an alternative to the distance travelled requirement.

The tax rules are technically adapted to the introduction of the new adjustment benefit for surviving spouses, etc., from 2024, as stipulated by the Storting.

The maximum tax credit for pension income and the thresholds for reduction of such tax credit are increased by estimated pension growth rates.

Some income tax allowances and thresholds are kept unchanged in nominal terms.

Wealth tax thresholds and limits are kept unchanged in nominal terms.

Gains from the sale of milk quotas are exempted from personal income calculation.

The tax-free allowance under the differentiated employer’s National Insurance contribution scheme is increased from NOK 500,000 to NOK 850,000.

The interest limitation rule is amended to prevent tax avoidance through application of the EBITDA rule between close associates and through the use of intra-group contributions.

The duration requirement for agreements under the industrial power exemption from resource rent tax on hydropower is reduced from seven to three years.

CO₂ tax on natural gas and LPG (liquefied petroleum gas) for the greenhouse industry is increased from 8 per cent to 15 per cent of the general level. To favour the greenhouse industry, the appropriation for Bionova is increased by a corresponding amount in 2024, which is earmarked for assisting businesses that need help to cover the costs of converting from LPG to electricity.

A tax is introduced on NO₂ emissions (nitrous oxide) from the burning of mineral oil.

A reduced CO₂ tax is introduced on shipping subject to ETS.

The reduced CO₂ tax on the use of mineral oil subject to ETS is increased due to Norwegian kroner depreciation.

The preferential tax treatment of plug-in hybrid cars under the motor vehicle registration tax is abolished.

The exemption from road usage tax on petrol used for exploration and exploitation of subsea natural resources is repealed.

The rate of the CO₂ component of the motor vehicle registration tax on light vans is increased by 5 per cent.

The reduced rate of electricity tax is increased due to Norwegian kroner depreciation.

The tax on TRI and PER is abolished.

Off-road motorcycles used in reindeer husbandry are exempted from motor vehicle registration tax and will qualify for value added tax deduction.

The value added tax exemption for electronic newspapers under Section 6-1 of the Value Added Tax Act shall encompass newspapers that predominantly contain text and still images.

The sectoral tax under the energy authorities is increased to strengthen the Norwegian Water Resources and Energy Directorate (NVE).

The sectoral tax under the Norwegian Communications Authority is increased to intensify digital preparedness efforts.

Several of the proposals also further the Government’s goal of simplifying the tax system:

The limit on direct deduction of expenses and residual balances is increased from NOK 15,000 to NOK 30,000.

The depreciation rate on electric vans is reduced from 30 to 24 per cent.

The rules for tax-free reorganization are changed, by codifying three typical cases from tax-exempt practice. This applies to cross-border mergers of investment funds that are UCITS funds, mergers and divisions of savings banks where one or more savings bank foundations are created and conversion of merger and demerger claims.

Special rules that are not being applied, especially in relation to excise duties are repealed.

1.3 Revenue effects of the proposed tax changes

Table 1.1 provides an overview of the revenue effects of the Government’s proposal. Accrued effects are changes in payment obligations for the income year 2024 that follow from the government's proposal, while booked effects are changes in payments in the same year. Payment routines can lead to discrepancies between accrued and book effects, for example companies pay income tax in subsequent years, and not all changes can be fully taken into account in the withholding tax. The revenue effects of the tax programme have been calculated in relation to a benchmark system for 2024. The benchmark system is based on the 2023 rules, adjusted upwards primarily by projected price, wage and wealth growth. Allowances and thresholds, etc., in the standard rate structure of personal taxation are adjusted to 2024 levels based on estimated wage growth of 4.9 per cent in the benchmark system. Special allowances and other thresholds in personal taxation have primarily been adjusted by an estimated consumer price increase from 2023 to 2024 of 3.8 percent. A taxpayer who only has ordinary allowances and growth in both ordinary income and personal income of 4.9 per cent will on average pay approximately the same amount of income tax in the benchmark system for 2024 as in 2023. In the benchmark system, all per unit taxes (for instance taxes per kg or per litre) have been adjusted by the projected growth in consumer prices from 2023 to 2024. In real terms, the benchmark system thus results in unchanged tax levels from 2023 to 2024.

Table 1.1  Estimated revenue effects of the Government’s proposed tax programme for 2024. Negative figures signify tax reductions. The estimates have been calculated in relation to the benchmark system for 2024. NOK million

2024

Accrued

Booked

Personal income tax

-400

-323

Adjust standard allowances (basic allowance and personal allowance)

-75

-60

Reduce National Insurance contributions on wages/benefits and self-employment income

-2,135

-1,710

Increase the bracket tax, including adjusting thresholds

1,595

1,275

The action zone: Abolish the lower rate in bracket 3 and increase the Finnmark allowance to NOK 30,000

-30

-24

Special allowance for seafarers – modify the requirements for qualifying for the scheme¹

-5

-4

Increase allowances for accommodation in temporary workers’ sheds/guest houses and for long-distance lorry drivers

-70

-55

Keep allowances and thresholds unchanged in nominal terms, interaction effects, etc.

320

255

Wealth tax

-427

-252

Keep standard allowances, etc., unchanged in nominal terms

23

18

Increase the commercial property discount rate

-450

-270

Business taxation

-483

-437

Increase the tax-free allowance under the differentiated employer’s National Insurance contribution scheme (DA scheme) to NOK 850,000

-500

-420

Increase the limit on direct deduction of expenses and residual balances from NOK 15,000 to NOK 30,000

-140

-15

Reduce the depreciation rate on electric vans

12

3

Exempt gains from the sale of milk quotas from personal income calculation

-5

-5

Resource rent tax on onshore wind power²

150

0

Climate taxes

2,305

2,384

Increase taxes on non-ETS emissions by 19 per cent

2,500

2,300

Compensate public transport operators with private provider contracts for increased CO₂ tax

-97

-97

Increase the waste incineration tax to 75 per cent of the general rate

210

190

Increase the reduced rate on natural gas and LPG for the greenhouse industry

9

8

Introduce tax on N₂O emissions from transport

190

170

Increase the sales requirement for biofuel in road traffic from 17 to 19 per cent

-210

-190

Introduce a reduced CO₂ tax rate for shipping subject to ETS

-300

0

Increase the reduced CO₂ tax rate for the use of mineral oil subject to ETS due to Norwegian kroner depreciation

3

3

Vehicle taxes

-1,250

-940

Abolish the preferential treatment of plug-in hybrid cars under the motor vehicle registration tax

50

45

Reduce the road usage tax on petrol by NOK 0.25 per litre

-160

-150

Reduce the road usage tax on mineral oils by NOK 0.32 per litre

-690

-630

Reduce the rates of the traffic insurance tax by NOK 400 per year³

-500

-250

Increase the rate of the motor vehicle registration tax on vans

50

45

Other excise duties

44

40

Increase the reduced rate of electricity tax due to Norwegian kroner depreciation

6

5

Tax on onshore wind power⁴

38

35

Abolish the tax on TRI and PER

-0.3

-0.3

Value added tax

-3

-3

Exempt off-road motorcycles in reindeer husbandry from motor vehicle registration tax and introduce value added tax deductibility for such motorcycles

-3

-3

Sectoral taxes and overpriced fees

27

27

Increase the sectoral tax under the energy authorities

25

25

Increase the sectoral tax under the Norwegian Communications Authority

2

2

Proposed tax changes in 2024

-187

496

Changes in temporary taxes introduced in the 2023 budget

Abolish the high-price contribution from 1 October 20235

-3,300

-3,900

Start phasing out additional employer’s National Insurance contributions (increase the threshold to NOK 850,000)

-1,820

-1,520

¹ The implications for the subsidy programme for seafarers are described in Proposition No. 1 (2023–2024) to the Storting for the Ministry of Trade, Industry and Fisheries, Chapter 909, Item 73; Subsidies for the employment of seafarers.

² The full year effect of the proposal for 2024 is lower and is estimated at NOK -550 million. This is due to the fact that negative resource rent income and unused deductions for production tax are carried forward and reduces revenue for future years.

³ The full-year effect is -NOK 1,450 million. The large discrepancy between annual effect, accrued effect and booked effect is due to the changes in the traffic insurance tax coming into effect on 1 March 2024, with tax collection taking place upon the ongoing renewal of insurance contracts over the course of the year.

⁴ The tax income is distributed to the host municipalities. The revenue increase will therefore be matched by a corresponding increase in the allocation on the expenditure side the following year.

⁵ Accrued effect is the full-year effect. Booked revenue loss in 2024 includes the reduction in accrued revenue in 2023. This explains why the booked effect is greater than the full-year effect.

Source: Ministry of Finance.

Table 1.2 presents estimated booked tax revenues for 2024, as well as estimates for 2023 and accounting figures for 2022, specified by chapter and item.

Table 1.2  Booked tax revenues specified by chapter and item. NOK million

Budget estimate 2023

Chap.

Item

Designation

Accounts 2022

Balanced budget

Estimate NB 2024

Proposal for 2024

5501

Taxes on wealth and income

70

Bracket tax, etc.

93,239

96,828

104,300

117,761

72

Equalisation tax to central government, etc., from personal taxpayers

147,221

136,820

141,100

155,900

74

Corporation taxes, etc., from non-personal taxpayers outside the petroleum sector

117,172

155,600

155,200

129,200

75

Wealth tax

3,610

9,700

9,700

-

76

Withholding tax on dividends

7,763

5,500

10,000

10,000

77

Withholding tax on interest payments

61

50

85

100

78

Withholding tax on royalty payments

0

1

0

0

79

Withholding tax on rent payments for certain physical assets

85

110

65

75

5502

Financial activity tax

70

Tax on payrolls

2,376

2,500

2,500

2,600

71

Tax on profits

2,160

2,500

2,500

2,650

5506

70

Tax on inheritance and gifts

32

-

55

-

5507

Tax on petroleum production

71

Ordinary tax on wealth and income

212,995

251,300

182,700

151,600

72

Special tax on petroleum income

500,626

595,100

414,300

330,700

74

Area tax, etc.

1,050

1,200

1,200

1,500

5508

70

Tax on CO2 emissions in the petroleum sector on the continental shelf

6,258

7,480

7,400

7,800

5509

70

Tax on NOX emissions in the petroleum sector on the continental shelf

1

1

0

0

5511

Customs revenues

70

Customs duties

3,768

4,000

3,400

3,500

71

Auction revenues from customs quotas

355

285

285

285

5521

70

Value added tax

365,705

392,950

385,000

398,897

5526

70

Tax on alcohol

16,369

15,000

16,400

17,000

5531

70

Tax on tobacco products

7,434

7,450

7,300

7,300

5536

Tax on motor vehicles, etc.

71

Motor vehicle registration tax, etc.

6,409

7,418

7,000

6,090

72

Traffic insurance tax

10,298

11,000

10,900

11,250

73

Annual weight-based tax

273

300

300

300

75

Re-registration tax

1,378

1,575

1,800

1,900

5538

Road usage tax on fuel

70

Road usage tax on petrol

4,288

4,360

3,700

3,650

71

Road usage tax on auto diesel

9,823

8,910

8,200

7,470

72

Road usage tax on natural gas and LPG

5

4

5

5

5540

70

Tax on power production

-

22,700

8,200

-500

5541

70

Electricity tax

8,912

9,910

8,000

8,205

5542

Tax on mineral oils, etc.

70

Base tax on mineral oils and biodiesel etc.

1,728

40

5

-

71

Tax on lubricating oils, etc.

110

110

110

110

5543

Environmental tax on mineral products, etc.

70

CO₂ tax on mineral products

12,053

14,944

14,000

16,341

71

Sulphur tax

5

3

5

5

5546

70

Waste incineration tax

159

360

280

630

5547

Tax on hazardous chemicals

70

Trichloroethene (TRI)

0

-

0

-

71

Tetrachloroethene (PER)

0

1

0

-

5548

70

Tax on hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs)

352

450

480

580

71

Tax on SF₆

-

45

45

60

5549

70

Tax on NOX emissions

49

50

40

40

5550

70

Environmental tax on pesticides

69

65

65

65

5551

Tax on mineral operations

70

Tax relating to subsea natural resources other than petroleum

1

1

1

1

71

Annual tax relating to minerals

11

10

14

14

5552

70

Tax on fish production

992

700

850

1,300

5553

70

Tax on wild marine resources

118

100

130

140

5554

70

Tax on onshore wind power

-

471

380

387

5555

70

Tax on chocolate and sugar products, etc.

-

-

-

-

5556

70

Tax on non-alcoholic beverages, etc.

7

-

-

-

5557

70

Tax on sugar

174

200

200

200

5559

Tax on beverage packaging

70

Base tax on disposable packaging

2,607

2,300

2,600

2,700

71

Environmental tax on cardboard

55

60

55

55

72

Environmental tax on plastics

38

40

40

40

73

Environmental tax on metals

7

10

10

10

74

Environmental tax on glass

4

5

5

5

5561

70

Air passenger tax

807

1,980

2,100

2,300

5565

70

Stamp duty

12,138

12,400

11,800

11,400

Sectoral taxes¹

4,252

4,247

4,384

4,486

5583

70

Special taxes, etc.

275

394

394

402

5584

70

Abolished taxes

20

-

-

-

5700

National Insurance Scheme revenues

71

Personal National Insurance contributions

169,866

176,246

177,500

190,787

72

Employer’s National Insurance contributions

226,022

244,916

250,900

264,673

Total

1,961,589

2,210,700

1,957,988

1,871,969

¹ Reference is made to Table 1.1 and chapter 9 for a specification of which sectoral taxes and fees are changed.

Source: Ministry of Finance.

Table 1.3 presents booked effects of proposed new rule changes in 2024, specified by chapter and item.

Table 1.3  Estimated booked revenue effects of the tax programme for 2024, specified by chapter and item. Calculated in relation to the benchmark system for 2024. NOK million

Chap.

Item

Designation

Change

5501

Taxes on wealth and income¹

70

Bracket tax and wealth tax, etc.

1,138

72

Equalisation tax to central government, etc., from personal taxpayers

65

74

Corporation taxes, etc., from non-personal taxpayers outside the petroleum sector

0

76

Withholding tax on dividends

0

77

Withholding tax on interest payments

0

78

Withholding tax on royalty payments

0

79

Withholding tax on rent payments for certain physical assets

0

5502

Financial activity tax

70

Tax on payrolls

0

71

Tax on profits

0

5506

70

Tax on inheritance and gifts

0

5507

Tax on petroleum production²

71

Ordinary tax on wealth and income

0

72

Special tax on petroleum income

0

74

Area tax, etc.

0

5508

70

Tax on CO₂ emissions in the petroleum sector on the continental shelf

0

5509

70

Tax on NOX emissions in the petroleum sector on the continental shelf

0

5511

Customs revenues

70

Customs duties

0

71

Auction revenues from customs quotas

0

5521

70

Value added tax

-3

5526

70

Tax on alcohol

0

5531

70

Tax on tobacco products, etc.

0

5536

Tax on motor vehicles, etc.

71

Motor vehicle registration tax

90

72

Traffic insurance tax

-250

73

Annual weight-based tax

0

75

Re-registration tax

0

5538

Road usage tax on fuel

70

Road usage tax on petrol

-150

71

Road usage tax on auto diesel

-630

72

Road usage tax on natural gas and LPG

0

5540

70

Tax on power production

-3,900

5541

70

Electricity tax

5

5542

Tax on mineral oils, etc.

70

Base tax on mineral oils and biodiesel, etc.

0

71

Tax on lubricating oils, etc.

0

5543

Environmental tax on mineral products, etc.

70

CO₂ tax

2,141

71

Sulphur tax

0

5546

70

Waste incineration tax

250

5547

Tax on hazardous chemicals

70

Trichloroethene (TRI)

0

71

Tetrachloroethene (PER)

0

5548

70

Tax on hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs)

80

71

Tax on SF₆

10

5549

70

Tax on NOX emissions

0

5550

70

Environmental tax on pesticides

0

5551

Tax on mineral operations

70

Tax relating to subsea natural resources other than petroleum

0

71

Annual tax relating to minerals

0

5552

70

Tax on fish production

0

5553

70

Tax on wild marine resources

0

5554

70

Tax on onshore wind power

35

5557

70

Tax on sugar, etc.

0

5559

Tax on beverage packaging

70

Base tax on disposable packaging

0

71

Environmental tax on cardboard

0

72

Environmental tax on plastics

0

73

Environmental tax on metals

0

74

Environmental tax on glass

0

5561

70

Air passenger tax

0

5565

70

Stamp duty

0

Sectoral taxes and overpriced fees²

27

5583

70

Tax on frequencies, etc.

0

5700

National Insurance Scheme revenues

71

Personal National Insurance contributions

-1,713

72

Employer’s National Insurance contributions

-1,927

¹ Effects apply to the central, regional and local government sectors. Reference is made to Section 3.4 for a discussion of regional and local government tax revenues.

² Reference is made to Table 1.1 and Chapter 9 for a specification of which sectoral taxes and overpriced fees are being changed.

Source: Ministry of Finance.

1.4 Social and geographical profile of the tax programme

1.4.1 Social distributional effects

The tax policy of the Government is characterised by social and geographical redistribution. This profile is maintained in the 2024 budget, with the Government proposing moderate modifications with redistributional effect.

The income tax reduction directly entailed by the changes included in the estimates is approximately NOK 425 million accrued. To measure the impact of the proposals on different groups, these proposals are compared with the 2023 rules applied to 2024 (the benchmark system). The estimates include changes in rates, allowances and thresholds under personal income taxation. The short-term distributional effects of the Government’s tax proposals for 2024 are presented in Table 1.4.

It is estimated that around 85 per cent of taxpayers will pay less or about the same amount of income tax.

Table 1.4  Estimated distributional effects of income tax changes for all persons aged 17 and over. Negative numbers are tax reductions. Compared to the benchmark system for 2024

Gross income¹ including tax-free benefits. NOK

Number

Average tax under the benchmark system. NOK

Average tax under the benchmark system. Per cent

Average change in tax.² NOK

Change as a percentage of gross income. Per cent

0–100,000

325,600

1,200

3.2

0

0.2

100,000–200,000

214,600

7,600

5.0

-200

-0.1

200,000–250,000

141,400

15,200

6.7

-600

-0.2

250,000–300,000

229,100

19,800

7.2

-200

-0.1

300,000–350,000

263,900

36,400

11.2

-200

-0.1

350,000–400,000

309,400

55,400

14.8

-200

-0.1

400,000–450,000

288,800

71,600

16.9

-200

-0.1

450,000–500,000

286,600

88,400

18.6

-400

-0.1

500,000–550,000

292,300

104,600

19.9

-400

-0.1

550,000–600,000

272,500

119,800

20.9

-400

-0.1

600,000–700,000

506,100

142,400

21.9

-400

-0.1

700,000–800,000

404,200

176,200

23.6

-200

0.0

800,000–1,000,000

457,700

231,400

26.1

0

0.0

1,000,000–2,000,000

491,200

406,400

31.3

800

0.1

2,000,000–3,000,000

53,300

874,000

36.8

800

0.0

3,000,000 and above

32,600

2,734,200

41.7

800

0.0

Total

4,569,300

159,600

24.9

0

0.0

1 Gross income includes wages, National Insurance benefits, pension income, self-employment income and capital income before tax and tax-free benefits.

2 The figures are rounded to the nearest NOK 200.

Sources: Ministry of Finance and the Statistics Norway tax model; LOTTE-Skatt.

The most important income tax change for which it has not been possible to calculate distributional effects in the Statistics Norway tax model is the proposal to increase allowances for accommodation in workers’ sheds/guest houses and for long-distance lorry drivers. Nor has it been possible to take into account changes in the estimated market value of commercial property as the result of a higher discount rate outside the major cities. Wealth is unevenly distributed, and changes in estimated market values will have the greatest impact on those holding the most wealth. In the Hurdal platform, it is stated that the government will keep the overall level of taxes and levies for people's incomes unchanged. It is then assumed that dividend tax and wealth tax are excluded. In 2024, the relief for households according to this definition adds up to NOK -0.9 billion, see table 1.5.

Table 1.5  Estimated revenue effects of permanent changes in personal taxes on income and consumption. The estimates for 2024 have been calculated in relation to the benchmark system for 2024. NOK million accrued

Støre-government (total)

2024 (government proposal)

Tax on personal income (excluding dividend tax)

-9 200

-400

Dividend tax

–

–

Wealth tax

–

–

Environmental- and car taxes

4 000

-500

Value added tax

1 800

–

Other excise duties

-600

–

Sectoral taxes and fees

-200

–

The tax level intention for households

-4 100

-900

Source: Ministry of Finance.

1.4.2 Geographical distributional effects

The geographical distributional effects of the proposed tax changes are moderate, but the increased Finnmark allowance and more accurately calculated market value of commercial properties in rural areas, as well as changes to the special allowance for seafarers, will serve to reduce tax in rural areas. The increase in bracket 3 of the bracket tax in the action zone will, in itself, result in somewhat higher tax in the action zone.

Table 1.6 presents the estimated average tax change from the Government’s proposed income tax changes for people in six centrality zones. Zone 1 is the most central and includes Oslo and some neighbouring municipalities, while zone 6 is the least central. Taxpayers in zones 3 to 6 will on average pay less income tax, while taxpayers in zones 1 and 2 will pay about the same amount of tax as before.

Table 1.6  Estimated geographical distributional effects of income tax changes for all persons aged 17 and over. Negative numbers are tax reductions. Compared to the benchmark system for 2024

Centrality zone

Number of taxpayers

Average gross income. NOK

Average calculated net wealth. NOK

Average tax under the benchmark system. NOK

Average change in income tax.¹ NOK

Z01

880,400

745,200

3,763,000

210,400

0

Z02

1,165,000

649,800

2,280,800

165,200

0

Z03

1,164,800

607,400

1,751,400

144,200

-200

Z04

735,000

595,400

1,436,600

136,400

-200

Z05

424,500

591,000

1,418,600

135,000

-200

Z06

199,700

578,400

1,531,800

130,800

-200

Total

4,569,300

640,000

2,182,800

159,600

0

¹ The figures are rounded to the nearest NOK 200.

Sources: Ministry of Finance and the Statistics Norway tax model; LOTTE-Skatt.

1.5 Tax rates and thresholds

Table 1.7 presents key tax rates, allowances and thresholds in 2023 and the Government’s proposal for 2024. After adjustment for projected growth in wages, pensions or prices, etc., from 2023 to 2024, the general allowances and thresholds have been rounded off. The upward adjustment may therefore deviate somewhat from the level indicated by the various growth projections. Wage growth is estimated at 4.9 per cent, consumer price inflation at 3.8 per cent and pension growth at 4.8 per cent. Reference is also made to the proposed tax decisions in this proposition and to the overview of allowances and thresholds on the Ministry’s website.

Table 1.7  Tax rates, allowances and thresholds in 2023 and proposals for 2024

2023 rules

Proposal 2024 rules

Change 2023–2024

Tax on ordinary income

Individuals¹

22%

22%

-

Businesses²

22%

22%

-

Tax on resource rent industries

Petroleum (special tax)³

71.8%

71.8%

-

Hydropower (resource rent tax)⁴

57.7%

57.7%

-

Aquaculture (resource rent tax)⁵

32.1%

32.1%

-

Wind power (resource rent tax)⁶

-

44.9%

new

Bracket tax

Bracket 1

Threshold

NOK 198,350

NOK 208,050

4.9%

Rate

1.7%

1.7%

-

Bracket 2

Threshold

NOK 279,150

NOK 292,850

4.9%

Rate

4.0%

4.0%

-

Bracket 3

Threshold

NOK 642,950

NOK 670,000

4.2%

Rate⁷

13.5%

13.6%

0.1 pp

Bracket 4

Threshold

NOK 926,800

NOK 937,900

1.2%

Rate

16.5%

16.6%

0.1 pp

Bracket 5

Threshold

NOK 1,500,000

NOK 1,573,500

4.9%

Rate

17.5%

17.6%

0.1 pp

National Insurance contributions

Lower thresholds for the payment of personal National Insurance contributions

NOK 69,650

NOK 69,650

-

Levelling rate

25%

25%

-

Rate

Wage income

7.9%

7.8%

-0.1 pp

Fishing and childcare⁸

7.9%

7.8%

-0.1 pp

Other self-employment income

11.1%

11.0%

-0.1 pp

Pension income, etc.

5.1%

5.1%

-

Rate on gross income for foreign employees (withholding tax)

25%

25%

-

Employer’s National Insurance contributions

Zone I

14.1%

14.1%

-

Zone Ia⁹

14.1/10.6%

14.1/10.6%

-

Zone II

10.6%

10.6%

-

Zone III

6.4%

6.4%

-

Zone IV

5.1%

5.1%

-

Zone IVa

7.9%

7.9%

-

Zone V

0%

0%

-

Additional employer’s National Insurance contributions

Threshold

NOK 750,000

NOK 850,000

13.3%

Rate

5%

5%

-

Maximum effective marginal tax rates

Wage income, excluding employer’s National Insurance contributions

47.4%

47.4%

-

Wage income, including employer’s National Insurance contributions

55.8%

55.8%

-

Pension income¹⁰

44.6%

44.7%

0.1 pp

Self-employment income

50.6%

50.6%

-

Dividends, excluding corporation tax

37.8%

37.8%

-

Dividends, including corporation tax¹¹

51.5%

51.5%

-

Personal allowance

NOK 79,600

NOK 88,250

10.9%

Basic allowance against wage income, etc.¹²

Rate

46%

46%

-

Upper limit

NOK 104,450

NOK 104,450

-

Basic allowance against pension income¹²

Rate

40%

40%

-

Upper limit

NOK 86,250

NOK 86,250

-

Tax credit for pension income

Maximum amount

NOK 32,825

NOK 34,350

4.6%

Downscaling, bracket 1

Threshold

NOK 246,800

NOK 258,400

4.7%

Rate

16.7%

16.7%

-

Downscaling, bracket 2

Threshold

NOK 373,650

NOK 391,550

4.8%

Rate

6.0%

6.0%

-

Tax limitation rule

Levelling rate

55%

55%

-

Tax-free net income

Single person

NOK 147,450

NOK 147,450

-

Married person

NOK 135,550

NOK 135,550

-

Wealth supplement

Rate

1.5%

1.5%

-

Single person

NOK 200,000

NOK 200,000

-

Married person

NOK 100,000

NOK 100,000

-

Special allowance in Troms and Finnmark (action zone)

NOK 20,550

NOK 30,000

46.0%

Special allowance for seafarers

Rate

30%

30%

-

Upper limit

NOK 83,000

NOK 83,000

-

Special allowance for fishermen

Rate

30%

30%

-

Upper limit

NOK 154,000

NOK 154,000

-

Special allowance against self-employment income from agriculture, etc.¹³

Income-independent allowance

NOK 93,000

NOK 93,000

-

Rate applicable to amounts in excess of the income-independent allowance

38%

38%

-

Maximum total allowance

NOK 195,000

NOK 195,000

-

Maximum allowance for payments to individual pension schemes¹⁴

NOK 15,000

NOK 15,000

-

Allowance for travel between home and work

Rate per km

NOK 1.70

NOK 1.76

3.5%

Lower allowance threshold

NOK 14,400

NOK 14,950

3.8%

Maximum allowance for donations to charities

NOK 25,000

NOK 25,000

-

Maximum allowance for paid trade union subscriptions, etc.

NOK 7,700

NOK 8,000

3.9%

Home investment savings scheme for people below the age of 34 years (BSU)

Tax deduction rate

10%

10%

-

Maximum annual savings

NOK 27,500

NOK 27,500

-

Maximum total savings under the scheme

NOK 300,000

NOK 300,000

-

Parental allowance for documented childcare expenses

Upper limit

One child

NOK 25,000

NOK 25,000

-

Supplement per additional child

NOK 15,000

NOK 15,000

-

Wealth tax¹⁵

Local government

Threshold

NOK 1,700,000

NOK 1,700,000

-

Rate

0.7%

0.7%

-

Central government

Threshold, bracket 1

NOK 1,700,000

NOK 1,700,000

-

Rate, bracket 1

0.30%

0.30%

-

Threshold, bracket 2

NOK 20 million

NOK 20 million

-

Rate, bracket 2

0.4%

0.4%

-

Valuation¹⁶

Primary dwelling

25%

25%

-

High-valuation primary dwelling¹⁷

70%

70%

-

Secondary dwelling (and assigned debt)

100%

100%

-

Shares (including commercial property) and assigned debt

80%

80%

-

Operating assets (and assigned debt)

70%

70%

-

Financial activity tax

Financial activity tax on payrolls

5%

5%

-

Financial activity tax on profits

3%

3%

-

Depreciation rates

Asset group a (office machinery, etc.)

30%

30%

-

Asset group b (acquired goodwill)

20%

20%

-

Asset group c (heavy goods vehicles, lorries, buses, vans, etc.)¹⁸

24 (30)%

24%

(-6 pp)

Asset group d (passenger cars, machinery and equipment, etc.)

20%

20%

-

Asset group e (ships, vessels, rigs, etc.)

14%

14%

-

Asset group f (aircraft, helicopters)

12%

12%

-

Asset group g (facilities for the transmission and distribution of electricity and electrotechnical equipment in power companies)

5%

5%

-

Asset group h (buildings and installations, hotels, etc.)¹⁹

4 (6/10/20)%

4(6/10/20)%

-

Asset group i (office buildings)

2%

2%

-

Asset group j (technical facilities in office buildings and other commercial buildings).

10%

10%

-

¹ For taxpayers in the action zone in the county of Troms og Finnmark, the rate is 18.5 per cent both in 2023 and 2024.

² The tax rate on ordinary income for businesses subject to financial activity tax is 25 per cent in both 2023 and 2024.

³ Since calculated corporation tax is deducted from the special tax base, a formal tax rate of 71.8 per cent will correspond to an effective tax rate of 56 per cent.

⁴ Since resource rent-related corporation tax is deducted from the resource rent tax base, a formal tax rate of 57.7 per cent will correspond to an effective tax rate of 45 per cent.

⁵ Since resource rent-related corporation tax is deducted from the resource rent tax base, a formal tax rate of 32.1 per cent will correspond to an effective tax rate of 25 per cent.

⁶ Since resource rent-related corporation tax is deducted from the resource rent tax base, a formal tax rate of 44.9 per cent will correspond to an effective tax rate of 35 per cent.

⁷ In 2023 the tax rate in bracket 3 is 11,5 pct. for taxpayers in the action zone in Finnmark and Nord-Troms. From 2024, the rate is the same for all regions in Norway. This change should be considered in the context of the increased Finnmark allowance.

⁸ Self-employed persons engaged in fishing, or in childcare in their own home (children under the age of 12 or with special care needs) pay National Insurance contributions on self-employment income at the rate of 7.9 per cent in 2023 and 7.8 per cent in 2024. The lower National Insurance contribution rate for fishing is related to this industry paying product tax, with such tax being intended to cover, inter alia, the difference between this lower rate and the contribution rate payable on other self-employment income.

⁹ In zone Ia, employer’s National Insurance contributions shall be paid at a rate of 10.6 per cent until the difference between what the enterprise pays in employer’s National Insurance contributions at this rate and what the enterprise would have paid in employer’s National Insurance contributions at a rate of 14.1 per cent is equal to the tax-free allowance. The rate of 14.1% is applied to the excess contribution base. In 2023, the tax-free allowance is NOK 500,000 per enterprise. For 2024, the tax-free allowance has been increased to NOK 850,000 per enterprise.

¹⁰ For persons encompassed by the tax credit for pension income, the highest effective marginal tax rate may be up to 47.8 per cent in both 2023 and 2024.

¹¹ Includes corporation tax and an upward adjustment factor for dividends, etc. In both 2023 and 2024, the corporation tax rate is 22 per cent and the upward adjustment factor for dividends, etc., is 1.72.

¹² Taxpayers with both wage income, etc., and pension income will be granted the sum of the basic allowances against wage income and pension income. The upper limit on the basic allowance against wage income applies as the upper limit on the sum of the basic allowances.

¹³ The income-independent element of the reindeer husbandry allowance is NOK 93,000, and the maximum allowance is NOK 195,000, in both 2023 and 2024.

¹⁴ In connection with the Revised National Budget for 2017, a scheme for tax-favoured individual pension savings was introduced. The maximum allowance under this scheme is NOK 15,000. The old IPS scheme was maintained with a maximum allowance of NOK 15,000 for those who already saved under that scheme. This is coordinated with contributions under the new scheme, thus implying that the total allowance under the schemes cannot exceed NOK 15,000.

¹⁵ The thresholds are for single taxpayers. For spouses, whose taxes are assessed jointly on joint wealth, the thresholds are double those specified in the table.

¹⁶ The valuation applies to assets owned directly by the taxpayer liable for wealth tax.

¹⁷ High-valuation primary dwelling applies to the part of the property value in excess of NOK 10 million in both 2023 and 2024.

¹⁸ The ordinary depreciation rate for asset group c is 24 per cent, with a higher rate of 30 per cent for vans, the abolition of which is proposed for 2024.

¹⁹ Livestock buildings in agriculture can be depreciated at a higher rate of 6 per cent. Buildings with such a simple structure that their useful life must be assumed not to exceed 20 years, can be depreciated at a rate of 10 per cent. The rate of 10 per cent also applies to facilities where the useful life must be assumed not to exceed 20 years. Costs for the establishment of fruit and berry fields can be depreciated on a declining-balance basis at a rate of 10 and 20 per cent, respectively.

Source: Ministry of Finance.

Table 1.8 presents the current rates for value added tax and excise duties, as well as the proposed rates for 2024. All excise duties have generally been adjusted upwards by 3.8 per cent to take into account anticipated inflation. Minor deviations may be due to rounding of the rates. Reference is also made to the decision on indirect taxes proposed in this proposition.

Table 1.8  Rates of indirect tax in 2023 and proposed rates for 2024

Tax category

2023 rules

Proposal for 2024

Change in per cent.

Value added tax, per cent of sales value

Standard rate

25

25

-

Reduced rate

15

15

-

Low rate

12

12

-

Tax on alcohol

Spirits-based beverages containing over 0.7 per cent alcohol by volume, NOK per volume per cent and litre

8.45

8.77

3.8

Other alcoholic beverages containing from 4.7 to 22 per cent alcohol by volume, NOK per volume per cent per litre

4.95

5.14

3.8

Other alcoholic beverages containing up to and including 4.7 per cent alcohol by volume, NOK volume per cent per litre

0.0–0.7 volume per cent

-

-

-

0.7–2.7 volume per cent

3.40

3.53

3.8

2.7–3.7 volume per cent

12.79

13.28

3.8

3.7–4.7 volume per cent

22.15

22.99

3.8

Fermented alcoholic beverages containing from 3.7 up to and including 4.7 per cent alcohol by volume, produced by small breweries.

variable

variable

-

Tax on tobacco products

Cigars, NOK per 100 grams

303

315

4.0

Cigarettes, NOK per 100 units

303

315

4.0

Smoking tobacco, NOK per 100 grams

303

315

4.0

Moist snuff, NOK per 100 grams

93

97

4.3

Chewing tobacco, NOK per 100 grams

123

128

4.1

Cigarette paper, NOK per 100 units

4.64

4.82

3.9

E-liquids containing nicotine, NOK per 100 ml

492

511

3.9

Tobacco for heating, NOK per 100 grams

303

315

4.0

Other nicotine products, NOK per 100 grams

46.48

48.25

3.8

Motor vehicle registration tax

Passenger cars, etc. Tax group a¹

All passenger cars

Kerb weight, NOK per kg

first 500 kg

0

0

-

remainder

12.50

12.98

3.8

Passenger cars, etc., with internal combustion engine

Kerb weight, NOK per kg

first 500 kg

0

0

0

next 700 kg

27.92

28.98

3.8

next 200 kg

69.57

72.22

3.8

next 100 kg

217.42

225.68

3.8

remainder

252.85

262.46

3.8

NOX emissions, NOK per mg/km

80.33

83.38

3.8

CO₂ emissions, NOK per g/km

first 82 g/km

0

0

-

next 36 g/km

1,351.29

1,402.64

3.8

next 37 g/km

1,514.27

1,571.81

3.8

next 70 g/km

2,939.27

3,050.96

3.8

remainder

4,688.70

4,866.87

3.8

allowance for emissions below 82 g/km, applies down to 50 g/km and only for vehicles with emissions of less than 82 g/km

854.65

887.13

3.8

allowance for emissions below 50 g/km, only applies to vehicles with emissions below 50 g/km

1,005.51

1,043.72

3.8

Vans class 2. Tax group b

Kerb weight, per cent of passenger car rate

20

20

-

NOX emissions, per cent of passenger car rate

75

75

-

CO₂ emissions, NOK per g/km

first 84 g/km

0

0

-

next 30 g/km

378.36

412.38

9.0

next 36 g/km

424.00

462.12

9.0

remainder

823.00

896.98

9.0

allowance for emissions below 84 g/km, applies down to 48 g/km and only for vehicles with emissions of less than 84 g/km

256.40

266.14

3.8

allowance for emissions below 48 g/km, only applies to vehicles with emissions of less than 48 g/km

301.65

313.11

3.8

Motorhomes. Tax group c²

Kerb weight, per cent of passenger car rate

22

22

-

Piston displacement

variable

variable

-

Tracked vehicles. Tax group e³

per cent of the value added tax base

36

-

-100.0

Motorcycles. Tax group f⁴

Piston displacement tax, NOK per cm³

first 500 cm³

0

0

-

next 400 cm³

33.25

34.51

3.8

remainder

77.70

80.65

3.8

CO₂ emissions, NOK per g/km

first 75 g/km

0

0

-

next 60 g/km

739.80

767.91

3.8

remainder

1,000.32

1,038.33

3.8

Snowmobiles. Tax group g

Kerb weight, NOK per kg

first 100 kg

15.62

16.21

3.8

next 100 kg

31.23

32.42

3.8

remainder

62.45

64.82

3.8

Engine power, NOK per kW

first 20 kW

25.08

26.03

3.8

next 20 kW

50.18

52.09

3.8

remainder

100.33

104.15

3.8

Piston displacement, NOK per cm³

first 500 cm³

0

0

-

remainder

10.98

11.40

3.8

Minibuses. Tax group j⁵

Kerb weight, per cent of passenger car rate

40

40

-

CO₂ emissions, NOK per g/km

variable

variable

-

Traffic insurance tax, NOK per day⁶

Passenger cars, vans, etc.

8.38

7.60

-9.3

Diesel cars without factory-fitted particle filter

9.84

9.11

-7.4

Motorcycles

6.10

5.23

-14.3

Tractors, mopeds, etc.

1.42

0.37

-73.9

Electric cars

8.38

8.70

3.8

Annual weight-based tax, NOK per year

variable

variable

-

Re-registration tax

variable

variable

-

Road usage tax on fuel

Petrol, NOK per litre⁷

4.70

4.62

-1.7

Mineral oils, NOK per litre⁸

2.92

2.71

-7.2

Bioethanol, NOK per litre

2.08

2.16

3.8

Biodiesel, NOK per litre

2.91

3.02

3.8

Natural gas, NOK per Sm³

2.85

2.96

3.9

LPG, NOK per kg

3.72

3.86

3.8

High-price contribution, per cent of price above NOK 0.70 per kWh

23

-

-100

Electricity tax, NOK 0.01 per kWh

Standard rate

15.84

16.44

3.8

Lower standard rate in January-March

9.16

9.51

3.8

Reduced rate

0.546

0.580

6.2

Tax on lubricating oils, NOK per litre

2.45

2.54

3.7

CO₂ tax on mineral products

Petrol, NOK per litre

2.21

2.72

23.5

Mineral oils, NOK per litre

standard rate

2.53

3.17

23.5

subject to ETS

0.23

0.24

4.3

domestic aviation

2.43

3.00

23.5

domestic aviation subject to ETS

1.66

1.72

3.9

domestic shipping subject to ETS⁹

2.53

2.07

-18.2

Natural gas, NOK per Sm³

standard rate

1.89

2.34

23.5

subject to ETS

0.066

0.066

-

chemical reduction, etc.¹⁰

0

0

-

greenhouse industry

0.15

0.35

133.3

domestic shipping subject to ETS⁹

1.89

1.54

-18.5

LPG, NOK per kg

standard rate

2.86

3.53

23.5

subject to ETS

0

0

-

chemical reduction, etc.¹⁰

0

0

-

greenhouse industry

0.23

0.53

130.4

domestic shipping subject to ETS⁹

2.86

2.33

-18.5

Waste incineration tax, NOK per tonne CO₂¹¹

Non-ETS emissions

476

882

85.3

Emissions subject to ETS

95

176

85.3

Tax on HFCs and PFCs, NOK per tonne CO2 equivalents

952

1,176

23.5

Tax on SF₆, NOK per kg SF₆

Undiluted SF₆

22,372

27,636

23.5

SF₆ included in products

4,332

5,523

27.5

CO₂ tax in the petroleum sector

mineral oils, NOK per litre

2.03

2.10

3.4

natural gas, NOK per Sm³

1.78

16.85

3.9

natural gas discharged into the atmosphere, NOK per Sm³

13.67

16.89

23.6

Sulphur tax, NOK 0.01 per litre

14.60

15.20

4.1

Tax on trichloroethene (TRI) and tetrachloroethene (PER), NOK per kg¹²

80.58

-

-100.0

Tax on NOX emissions, NOK per kg

24.46

25.59

3.8

Tax on fish production, NOK per kg

0.90

0.935

3.8

Tax on wild marine resources, percentage of gross sales value less fees paid to fishermen’s cooperative sales association

0.42

0.42

-

Tax on onshore wind power, NOK 0.01 per kWh

2.00

2.30

15.0

Tax on sugar, NOK per kg

8.84

9.18

3.8

Tax on beverage packaging, NOK per unit

Base tax, disposable packaging

1.33

1.38

3.8

Environmental tax

glass and metal

6.46

6.71

3.9

plastic

3.91

4.06

3.8

cardboard and cartons

1.59

1.65

3.8

Air passenger tax, NOK per passenger

Low rate

82

85

3.7

High rate

320

332

3.8

Stamp duty, per cent of sales value

2.5

2.5

-

¹ Group a: Passenger cars, vans class 1 and buses less than 6 metres in length with up to 17 seats. Piston displacement is used as the tax component for vehicles whose CO₂ emissions are not specified.

² Group c: Motorhomes. Not subject to NOX component.

³ Group e: Tracked vehicles. It is proposed to abolish the tax with effect from 1 January 2024.

⁴ Group f: Motorcycles. Vehicles for which CO₂ emissions are not registered are subject to tax per unit and a tax on engine power, in addition to piston displacement tax.

5 Group j: Buses less than 6 metres in length with up to 17 seats, of which at least 10 are forward-facing. The highest bracket of the CO₂ component does not apply to group j. Not subject to NOX component.

⁶ The tax that each insurance policy triggers is determined on the basis of the tax rates that applied as of the start date of the policy. The 2022 rates apply to insurance policies that were established or had their main expiry date before 1 March 2023. The 2023 rates apply to insurance policies that were established or had their main expiry date between 1 March 2023 and 29 February 2024. The 2024 rates apply to insurance policies that are established or have their main expiry date after 1 March 2024.

⁷ Petrol with a sulphur content of less than 10 ppm.

8 Diesel with a sulphur content of less than 10 ppm.

⁹ The introduction of a reduced rate for domestic shipping subject to ETS requires the issue of state aid to be clarified with the ESA.

¹⁰ The tax on natural gas and LPG for chemical reduction, etc., has not entered into effect, pending ESA approval of the exemption for businesses subject to ETS.

¹¹ The introduction of a reduced rate for emissions subject to ETS requires amendments to the General Block Exemption Regulation (GBER). Until these amendments are in place, both rates will be increased to NOK 294 per tonne of CO₂.

¹² It is proposed to abolish the tax on trichloroethene (TRI) and tetrachloroethene (PER) with effect from 1 January 2024.

Source: Ministry of Finance.

1.6 Distribution of public tax revenues

Table 1.9 provides a general overview of the main groups of taxes and the parts of the public sector that receive revenues from each main group. Total tax revenues are estimated at NOK 2,105 billion in 2023. Of this amount, just over 87 per cent will accrue to central government, just over 11 per cent to local government and just over 2 per cent to regional government.

Most local and regional government tax revenues are in the form of income tax and wealth tax paid by personal taxpayers. Just over 27 per cent of central government tax revenues are in the form of value added tax, excise duties and customs duties. Just over 24 per cent of central government tax revenues are paid by personal taxpayers, while just under 22 per cent are paid by non-personal taxpayers outside the petroleum sector, including employer’s National Insurance contributions in mainland Norway. 24 per cent of central government tax revenues in 2023 will take the form of taxes on petroleum. Taxes from the petroleum sector are included in central government’s net cash flow from petroleum activities, which is transferred to the Government Pension Fund Global.

Table 1.9  Accrued taxes by tax creditors. Estimates for 2023. NOK billion

Total

Central government

Local government

Regional government

Personal taxpayers

696.6

442.9

211.7

42.0

Tax on ordinary income

377.6

144.4

191.2

42.0

Tax on personal income

105.3

105.3

Personal National Insurance contributions

183.3

183.3

Wealth tax

30.4

9.9

20.5

Companies (whose taxes are payable in arrears)

130.5

128.6

1.6

0.3

Income tax (including power plants)

129.8

128.0

1.6

0.3

Wealth tax

0.6

0.6

0.0

Financial activity tax

5.2

5.2

0.0

0.0

Tax on payrolls

2.6

2.6

Tax on profits

2.7

2.7

Property tax

16.8

16.8

Employer’s National Insurance contributions

254.0

254.0

Indirect taxes

501.5

501.5

Value added tax

389.8

389.8

Excise duties and customs duties¹

111.7

111.7

Petroleum

438.2

438.2

0.0

0.0

Tax on income

430.4

430.4

Tax on extraction, etc.

7.8

7.8

Other taxes

62.3

57.4

4.0

0.9

National Insurance and pension premiums, other central government accounts²

36.4

31.6

4.0

0.9

Tax on dividends to foreign shareholders

10.0

10.0

Other taxes³

15.8

15.8

Total taxes

2,105.0

1,827.8

234.0

43.2

¹ Excluding certain excise duties and sectoral taxes that are recognised as taxes in the fiscal budget, but are grouped as property income or user payments in the national accounts, including the high-price contribution.

² Including, inter alia, the Norwegian Public Service Pension Fund.

³ Including some revenue items that are grouped as tax revenues in the national accounts, but are not recognised as tax revenues in the fiscal budget.

Source: Ministry of Finance.

Fotnoter

1)

When the removal/phasing out of the temporary tax increases in the adopted 2023 budget is excluded, the discrepancy between the accrued effect in 2024 (-187 million NOK in table 1.1) and the full-year effect of the tax system is -0.9 billion NOK. This is primarily due to the fact that the changes in the traffic insurance tax take place from 1 March 2024, with the tax collection taking place upon the ongoing renewal of insurance contracts throughout the year.