Many probably heard that in Norway the standard of living is high, as are salaries in the most ordinary areas of activity, not to mention highly qualified specialists. Children from kindergartens are accustomed to self-development. The cost of education at all levels of the system is covered by the state. Moreover, the school system provides for 13 years of education. Add to this a high standard of living and first-class medicine. It is not surprising that there are so many who want to move to this albeit cold, but prosperous country.
Should I go there in search of a better life? First you need to find out what taxes exist in Norway and for what purpose they are levied.
Features of taxation in Norway
In this country, not only income but also property tax is levied. They constitute a direct taxation system. An indirect tax system consists of a tax on goods and products that are sold in stores and trading bases. All deductions cover government spending on education, pensions and other social needs. It is worth noting that there are practically no tourists who would have remained illegally working in Norway. Many residents do not recognize guests visiting permanent residence, expressing obvious dissatisfaction with them.
Taxes in Norway for individuals are a way of forming a state-type treasury, which then goes to finance hospitals, educational institutions, the maintenance of children and the elderly. Part of the money allocated for the construction of roads, grants for students, etc. Some of the country's services are absolutely free for residents, although they are expensive in EU countries. However, within a Scandinavian country, one type of tax may amount to all deductions from other countries for each citizen.
Work in Norway
Not living, but working in this state for hire, you must pay taxes. As soon as you arrive in the city, you must contact the tax office yourself. For this, each foreigner is given eight days. At the place of residence register a tax card, which reflects all payments of the inspection. Tightened taxation rules have long been in place, and financing experts call these measures very firm and difficult to implement. However, local authorities do not see any problems, because salaries allow Norwegian citizens to live well.
In European countries, rates are reduced, and the Scandinavian peninsula does not make such compromises. Therefore, you should know in advance, make sure and decide for yourself whether you are ready to give the lion's share of your salary to a country in which you can hardly live until old age.
How much do shareholders and legal entities pay
If you get a job in a joint-stock company, you should know that the director pays delingsmodellen - this is a "model of separation" of capital that is in the company's turnover. Income tax in Norway is 28%, the remaining deductions are divided into profit from capital, which is owned and owned by the company, and income from labor of each employee. At the end of the month, a report is openly posted for review:
- Workers themselves can check all reporting payments.
- An employee sees how much money his colleague paid.
- Money can be counted, ask for a certificate of referral bills.
This is an open and transparent system for presenting information for every employed citizen. Personal earnings of shareholders are subject to other taxes that are outside the company's statement at the level at which they are collected from individuals. The marginal rate of active shareholders is 52%, but the directory quickly found a way to transfer the marginal through other divisions. Therefore, now for legal entities the rate is the same: only 28%.
Types of taxes for individuals
A simple ordinary employee who has contracted with the company receives an official allowance, like everyone else, must pay taxes in Norway. Based on the card received, he is calculated the optimal rate and assigned the number of the time sheet. It will be deducted. It is much easier for the employer to keep interest. And in order not to get confused, they start a form that indicates what percentage of the employee’s salary will be withheld. Wherein:
- Take into account the position and salary.
- Indicate how many children the employee has (even if they live abroad).
- They note age and length of service (even if during a certain period a person worked in another country).
- Indicate social status (married, married, single).
- Indicate also the place of residence. If a person lives at the expense of the employer, they also charge a certain percentage for this after deduction of the amount required to cover living expenses.
- They note whether he has property or real estate somewhere in the world.
Next, calculate how many types of taxes can be set for a particular citizen. Unlike the Russian system, in which there is a standard fixed rate and everyone pays taxes on the size of their salaries, taxes in Norway are different for everyone. That is why reporting is read like a fresh morning newspaper with news.
Types of deductions for all able-bodied citizens
There are five types of taxes in a Scandinavian country:
- Social. It is paid by all employees from their wages in the amount of 7.8%. The basis for the calculation is the citizen's income, its minimum size is 49,650 kroons.
- Income tax. The basis for the calculation is the citizen's income. The rate is 27%.
- Property tax. The state does not take basic housing into account. The tax is paid by the citizens who own a vacation home. Its size is 2.5% of the appraised value of real estate.
- Personal tax. The basis for the calculation is the person’s income.
- “Wealth” tax: deposits in both Norwegian and foreign banks, securities, stocks, and intangible assets, for example, when a patent is leased.
What are the taxes
Since taxes are paid only by decision of the employer, he also takes into account how many people work hours per day, what his schedule is, the vacation period and whether there are unpaid sick leave. With any change, the collection schedule must be balanced so that the employee does not overpay more than it should. It would be unfair if a person with 30 years of work experience paid the same amount as an employee who worked for 30 days.
What is the most common tax in Norway? Social (Trygdeavgifr), it is 8.2% of wages. Moreover, the amount is calculated from the non-taxable gross and if the annual profit is 49 651 kroons and above.
In Norway, payroll taxes are considered the toughest (Inntektsskatt). They consist of three parts, and they are distributed between the commune, state and region. All together should be 27%.
Extra income tax (Toppskatt) - only 9% in addition to other payments. Apply in cases where the employee's profit is 550 550 kroons per year.
Property tax (Forumeskatt) is 2.5% of the market value of real estate, provided that its total value is 1,200,000 kroons.
Such rates are not always convenient for all residents, and the state pays attention to it. For example, for residents of Nord-Troms and Finnmark (northern regions) the excess income tax is only 7%, and the percentage of tax in Norway (income) is only 23.5%. The employer must also balance the payments during the year so that the subordinate by the end of the year does not pay anything more than the amount to which he is accustomed. Ideally, if everything converges and there are no differences.
Fiscal system at the EEC
Since Norway is not a member of the European Union, it maintains its own reserve of payments. However, the country is part of the European Economic Community. Therefore, the tax base may include levies in national and European currencies. Financiers and analysts regard this moment as positive. Taxes in Norway for individuals can form a budget at the regional and federal levels. For example, when using the classical and traditional collection models, part of the income of foreign citizens is directed to the formation of the country's capital.
The incomes of local residents are distributed at the regional and state levels, due to which sources will be formed for the creation and replenishment of pension funds.
Benefits for citizens
There are two main deductions to the fiscal system that are not affected by benefits. The rest is recounted. Personal expenses (personfradrag) are associated with minimum payments, and the costs of working with the main contributions (minstefradrag):
- For personal expenses they pay 4200 kroons per month, which is equivalent to 54,000 per year.
- Work costs require payment of 43%, but not higher than 89 050 kroons, and not less than 31 800 kroons per year.
Only these two categories need to be paid if a citizen has certain benefits due to family, children, working conditions, etc. Sometimes the rate of these two deductions is changed if it is difficult for a person to live on a minimum wage.
Who benefits programs
Taxes in Norway can reduce certain categories of citizens. Since the country no longer prohibits foreigners from working in their own state, many communes introduced certain amendments, exempting certain categories of citizens from all or part of their taxes. They use the preferential tax system:
- Senior citizens.
- Foreigners.
- Residents of the northern regions of Nord-Troms and Finnmark.
- Persons whose spouse receives low income.
- Single parents.
- Parents of children under 12 years old.
- The sailors.
- Borrowers and payers of loans.
- Citizens leaving for a business trip for a long time (away from family).
- Youth under 22 years old.
There are many more benefits, but these are the most basic of them. Much depends on the place of work, its location, equipment and scope of the employee.
Example of calculating tax deductions
To better understand the tax system, we will analyze a specific example. Consider the income tax in Norway:
- The average monthly salary = 44 thousand kroons, 1 kroon - 7.64 rubles, which is about 330 000 rubles.
- A tax-free minimum (36,000 kroons) is deducted from the annual amount, which is 6.8% (children and spouse are absent).
- National tax - 13.8%.
- Municipal tax - 27-28%.
- Social funds - 7.8%.
- The total tax is 47-49.5%.
- Salary after tax - 172,000 rubles.
The example shows that almost half of the income people give to the state. However, food prices are not very high for local residents. The average cost of food and housing is 120-140 thousand rubles (excluding cars and rental housing). And this increases the ability of the population to accumulate funds. In addition, do not forget that the average salary was taken for the calculation.
Tax refund
Are taxes returned in Norway? How many percent can be kept taking into account such rates? From January 1, an employee is issued an annual report card in the form of RF-1015B, which remains with him. Before the New Year it is returned so that the person becomes acquainted with the payments. Based on this, an income tax return form (Tax Return, Selvangivelse, Sølvmelding) is compiled. A citizen must fill out RF-1030 form and send it to the tax office.
It should be borne in mind that payments do not change during the year, so some benefits may not be valid. If so, then the report is submitted before the end of March with the introduction of adjustments. Moreover, for every 1000 kroons, 270 kroons of tax is written off.
Challenging a tax return
It is imperative to verify the data when filling out the reporting forms. If something changes during the year (a child is born, marriage or marriage), then additional data is added about this. If there were no changes, then formally the card code does not change with respect to the amendments made, and then in the absence of such a need, a person does not fill out any reports himself.
Income tax in Norway must be checked against accrued benefits. At the end of June, the first collection lists begin to arrive. Check the declaration before the end of the next reporting year (it coincides with the calendar). If there are violations, the citizen shall indicate in writing all claims. Typically, a return of income occurs within a period of up to three weeks from the moment of checking all declarations. If the grounds for contestation remain, then you need to prove the mistakes and submit a document for review, which will take about four months.