NORWAY Law and Practice Contributed by: Harald Sætermo, LexOslo
5. Tax Law 5.1 Taxes Applicable to Employees/ Employers
5.2 Taxes Applicable to Businesses Corporate Income Tax
A company incorporated in Norway or effectively managed from Norway is generally tax resident in Nor - way and taxable on its worldwide income. A foreign company may be subject to limited tax liability in Nor - way on Norwegian-source business income, includ - ing income from business carried on in or managed from Norway, subject to applicable tax treaty rules, including permanent establishment requirements. The ordinary corporate income tax rate is 22%. Certain financial-sector companies are taxed at 25%, while special tax regimes apply to sectors such as petro - leum, hydropower, aquaculture and shipping. Value Added Tax (VAT) Norway has a value added tax system. The stand - ard VAT rate is 25%, with reduced rates of 15% for foodstuffs and water and wastewater services, and 12% for certain services including passenger trans - port, accommodation and admission to certain cul - tural and leisure activities. Businesses must register for VAT when turnover of taxable goods and services exceeds NOK50,000 within a 12-month period. Regis - tered businesses generally charge output VAT on tax - able supplies and may deduct input VAT on purchas - es used in the VAT-liable business. VAT is therefore normally intended to be borne by the final consumer rather than by VAT-registered businesses. Withholding Tax Dividends distributed from a Norwegian company to a foreign shareholder are generally subject to 25% withholding tax, unless reduced under a tax treaty or exempt under domestic rules, including exemptions for qualifying corporate shareholders within the EEA. Norway does not generally levy withholding tax on ordinary arm’s length interest or royalty payments, but a 15% withholding tax applies to interest, royalties and certain lease payments to related parties resident in low-tax jurisdictions, subject to treaty relief and EEA exemptions for genuine establishments. Transfer Taxes and Stamp Duty Norway does not have a general capital duty or stamp duty on share transfers. Acquisitions of shares in Nor - wegian companies are therefore not subject to trans - fer tax.
Employees working in Norway are generally taxable on salary earned for work performed in Norway. Indi - viduals who are tax resident in Norway are generally taxable in Norway on worldwide income and wealth, subject to applicable tax treaty relief. An individual becomes tax resident in Norway if he or she stays in Norway, over one or more periods, for more than 183 days during a 12-month period, or more than 270 days during a 36-month period. Non-residents may still be subject to limited tax liability in Norway on Norwegian- source employment income, including salary for work performed in Norway. Employment income is taxed through ordinary income tax, bracket tax and employee national insurance con - tributions. For 2026, the employee national insurance contribution on salary is 7.6%, and the maximum effective marginal tax rate on salary income, excluding employer’s national insurance contributions, is 47.4%. Employers must withhold tax from salary payments and report salary, benefits and withholding on a monthly basis through the “A-melding” system. From 2026, withholding tax must generally be paid no later than the first working day after salary payment. Employers must also pay employer’s national insur - ance contributions. The rate is geographically dif - ferentiated by municipality; the ordinary rate in cen - tral areas is 14.1%, but lower rates apply in certain regions. Employer’s contributions are calculated on gross salary and relevant benefits. Foreign workers may, in some cases, be taxed under the simplified PAYE scheme. For 2026, the PAYE rate is 25%, or 17.4% where the employee is exempt from Norwegian national insurance contributions. PAYE is mainly relevant for shorter stays or the first year of Norwegian tax residence, subject to an income threshold of NOK725,050 (2026) and other conditions.
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