Key changes to taxes and duties – 2020 state budget

The 2020 state budget was presented on 7 October. The general impression is that there are few changes of great significance.

Among the changes, the following are mentioned:

  • Taxes:
    • Most basic amounts and points of impact are index or wage-adjusted.
    • The personal allowance is wage-adjusted and has been reduced as a result of the restructuring of the NRK TV license.
  • Capital:
    • The capital rules for shares in newly formed and merged businesses have been adjusted to be in line with other businesses.
    • The capital base from commercial property in businesses has been changed from 75% to 100%.
  • Property taxes
    • The maximum rate for property tax has been adjusted from 7 to 5 per mille.
  • R&D
    • The maximum hourly rate for R&D costs has been increased from NOK 600 to NOK 700 and the maximum allowance has been set at NOK 25 million per entity, with the deductible rate set to a flat rate of 19%.

Read more about the details below.

 

TAX

Personal tax

No changes are proposed for the tax rate on ordinary income in 2020. Furthermore, it is proposed that the rates are kept unchanged in all brackets for 2020, i.e. 1.9% in bracket 1, 4.2% in bracket 2, 13.2% in bracket 3 (11.2% in the action zone in Troms and Finnmark county) and 16.2% in bracket 4. It is proposed that the points of impact be adjusted to account for expected wage growth, to NOK 180,800 in bracket 1, NOK 254,500 in bracket 2, NOK 639,750 in bracket 3 and NOK 999,550 in bracket 4.

The government proposes to adjust the upper limit for the minimum deduction in wages and social security by estimated wage growth, to NOK 104,450.

The personal allowance will be wage-adjusted, while also being reduced as part of the restructuring of the NRK financing.

Tax liability and the right to deduct expenses for entertainment contributions will be removed.

 

Capital gains tax

The government proposes changes to the capital gains tax regulations to remove unintended adjustment opportunities. It will no longer be possible to reduce the capital value of unlisted businesses using the special valuation rules applicable to newly formed businesses. A proposal is also made to correct a bias in the valuation of indirectly owned commercial property.

The government proposes repealing the special valuation rule for newly formed businesses. The proposal will result in all unlisted shares in Norwegian limited companies and public limited companies being valued at the shares’ proportion of the business’ taxable capital.

It is also proposed that unlisted shares in businesses that have been the acquiring business in two specific mergers must be valued on 1 January of the tax assessment year and not 1 January of the fiscal year as before. The proposal will result in capital transfers resulting from such mergers being captured in the capital assessment for the fiscal year concerned, regardless of whether a change in capital is carried out at the time of the merger.

The government proposes to correct a bias in the capital valuation of commercial property owned through unlisted limited companies or shared liability partnerships. Such businesses that own commercial property valued using the safety valve in Section 4-10(1) of the Tax Act must no longer use 75% but 100% of the documented market value as the basis. The changes mean that commercial property owned through an unlisted company or a shared liability partnership cannot receive a reduced valuation twice in cases where the safety valve is used.

 

Property taxes

From 2020, the maximum property tax rate for residential property and leisure property will be reduced from 7 to 5 per mille. The government intends to reduce the maximum property tax rate for residential and leisure property from 5 to 4 per mille from 2021 and will get back to this as part of a comprehensive scheme for local government finances in connection with the 2021 local government proposition.

 

Financial activity tax

The government proposes to continue the financial activity tax at the same level as in 2019.

 

Tax rebate scheme

The government has proposed changes to the tax rebate scheme.

It is proposed that the maximum hourly rate for internal R&D be increased from NOK 600 to NOK 700 and that this rate will also apply to R&D purchased from related parties. It is proposed that the allowance basis for internal and purchased R&D be set to a maximum of NOK 25 million per taxpayer and that the deductible percentage be set to a flat rate of 19% for all businesses, regardless of size. Changes are also proposed to prevent misuse of the scheme, including limiting the deductible to apply to the purchase of R&D services from countries within the EEA and other countries with which Norway has a tax treaty or information exchange treaty.

With regard to beleaguered businesses, there has been considerable uncertainty with regard to whether previously allocated support in contravention of the EEA rules is at risk of having to be repaid and what will apply going forward. In this regard, it has been stated that the government will carefully monitor the considerations made by the EU and will return to the question if necessary.

 

DUTIES

Value-added tax

No changes are proposed concerning the general rates for value-added tax (25%, 15%, 12%) or scope other than the discontinuation of the general tax exemption for the import of goods with a value below NOK 350.

 

Employer’s national insurance contributions

Remain unchanged.

 

Excise duties

The rates on excise duties will be adjusted to a large extent.

With regard to carbon tax, this will increase further. For 2020, it is proposed that carbon tax be increased by 5 per cent above the price adjustment. In order to counteract increased pump prices for fuel, a corresponding reduction in the road use tax on petrol and diesel is also proposed.

There is also mention of the tax on electricity, for which it is proposed that the reduced rate for industry, etc. be increased from 0.50 øre to 0.505 øre per kWh due to the weak Norwegian krone.

No stamp duty changes are proposed for 2020.

 

Other duties

The TV license will be removed from 1 January 2020 and NRK will be financed from the state budget from the same time by reducing the personal allowance for income tax.

 2019-reglerForslag 2020
Skatt på alminnelig inntekt
Personer22 pst.22 pst.
Bedrifter22 pst.22 pst.
Skatt på grunnrentenæringer
Petroleum (særskatt)56 pst.56 pst.
Vannkraft (grunnrenteskatt)37 pst.37 pst.
Trinnskatt
Trinn 1
Innslagspunkt174 500 kr180 800 kr
Sats1,9 pst.1,9 pst.
Trinn 2
Innslagspunkt245 650 kr254 500 kr
Sats4,2 pst.4,2 pst.
Trinn 3
Innslagspunkt617 500 kr639 750 kr
Sats13,2 pst.13,2 pst.
Trinn 4
Innslagspunkt964 800 kr999 550 kr
Sats16,2 pst.16,2 pst.
Trygdeavgift
Nedre grense for å betale trygdeavgift54 650 kr54 650 kr
Opptrappingssats25 pst.25 pst.
Sats
Lønnsinntekt8,2 pst.8,2 pst.
Fiske, fangst og barnepass8,2 pst.8,2 pst.
Annen næringsinntekt11,4 pst.11,4 pst.
Pensjonsinntekt mv5,1 pst.5,1 pst.
Sats på bruttoinntekt for utenlandske arbeidstakere (kildeskatt)25 pst.25 pst.
Arbeidsgiveravgift
Sone I14,1 pst.14,1 pst.
Sone Ia14,1/10,6 pst.14,1/10,6 pst.
Sone II10,6 pst.10,6 pst.
Sone III6,4 pst.6,4 pst.
Sone IV5,1 pst.5,1 pst.
Sone IVa7,9 pst.7,9 pst.
Sone V0 pst.0 pst.
Maksimale effektive marginale skattesatser
Lønnsinntekt ekskl. arbeidsgiveravgift46,4 pst.46,4 pst.
Lønnsinntekt inkl. arbeidsgiveravgift53,0 pst.53,0 pst.
Pensjonsinntekt43,3 pst.43,3 pst.
Næringsinntekt49,6 pst.49,6 pst.
Utbytte46,7 pst.46,7 pst.
Personfradrag56 550 kr51 300 kr
Minstefradrag i lønnsinntekt
Sats45 pst.45 pst.
Nedre grense4 000 kr4 000 kr
Øvre grense100 800 kr104 450 kr
Minstefradrag i pensjonsinntekt
Sats31 pst.31 pst.
Nedre grense4 000 kr4 000 kr
Øvre grense85 050 kr87 450 kr
Særskilt fradrag i arbeidsinntekt31 800 kr31 800 kr
Særfradrag for enslige forsørgere51 804 kr51 804 kr
Særskilt skattefradrag for pensjonister
Maksimalt beløp30 000 kr32 330 kr
Nedtrapping, trinn 1
Innslagspunkt198 200 kr204 150 kr
Sats15,3 pst.16,7 pst.
Nedtrapping, trinn 2
Innslagspunkt297 900 kr306 300 kr
Sats6,0 pst.6,0 pst.
Skattebegrensningsregelen
Avtrappingssats55 pst.55 pst.
Skattefri nettoinntekt
Enslig147 450 kr147 450 kr
Gift135 550 kr135 550 kr
Formuestillegget
Sats1,5 pst.1,5 pst.
Enslig200 000 kr200 000 kr
Gift100 000 kr100 000 kr
Særskilt fradrag i Troms og Finnmark (tiltakssonen)15 500 kr15 500 kr
Sjømannsfradraget
Sats30 pst.30 pst.
Øvre grense80 000 kr80 000 kr
Fiskerfradraget
Sats30 pst.30 pst.
Øvre grense150 000 kr150 000 kr
Særskilt fradrag i næringsinntekt for jordbruk mv.
Inntektsuavhengig fradrag63 500 kr90 000 kr
Sats utover inntektsuavhengig fradrag38 pst.38 pst.
Maksimalt samlet fradrag166 400 kr190 400 kr
Maksimalt årlig fradrag for innbetaling til individuell pensjonsordning1140 000 kr40 000 kr
Fradrag for reiser mellom hjem og arbeid
Sats per km1,56/0,76 kr1,56/0,76 kr
Nedre grense for fradraget22 700 kr23 100 kr
Maksimalt fradrag for gaver til frivillige organisasjoner50 000 kr50 000 kr
Maksimal verdi av skattefri rabatt for personalrabatter8 000 kr8 000 kr
Maksimalt fradrag for innbetalt fagforeningskontingent mv.3 850 kr3 850 kr
Boligsparing for ungdom under 34 år (BSU)
Sats for skattefradrag20 pst.20 pst.
Maksimalt årlig sparebeløp25 000 kr25 000 kr
Maksimalt samlet sparebeløp i ordningen300 000 kr300 000 kr
Foreldrefradrag for legitimerte utgifter til pass og stell av barn
Øvre grense
Ett barn25 000 kr25 000 kr
Tillegg per barn utover det første15 000 kr15 000 kr
Formuesskatt
Kommune
Innslagspunkt1 500 000 kr1 500 000 kr
Sats0,7 pst.0,7 pst.
Stat
Innslagspunkt1 500 000 kr1 500 000 kr
Sats0,15 pst.0,15 pst.
Verdsettelsesrabatter
Primærbolig75 pst.75 pst.
Sekundærbolig (og tilordnet gjeld)10 pst.10 pst.
Aksjer og driftsmidler (inkl. næringseiendom) og tilordnet gjeld25 pst.25 pst.
Finansskatt
Finansskatt på lønn5 pst.5 pst.
Avskrivningssatser
Saldogruppe a (kontormaskiner o.l.)30 pst.30 pst.
Saldogruppe b (ervervet forretningsverdi)20 pst.20 pst.
Saldogruppe c (vogntog, lastebiler, busser, varebiler mv.)24 (30) pst.24 (30) pst.
Saldogruppe d (personbiler, maskiner og inventar mv.)20 pst.20 pst.
Saldogruppe e (skip, fartøyer, rigger mv.)14 pst.14 pst.
Saldogruppe f (fly, helikopter)12 pst.12 pst.
Saldogruppe g (anlegg for overføring og distribusjon av el. kraft og elektroteknisk utrustning i kraftforetak)5 pst.5 pst.
Saldogruppe h (bygg og anlegg,4 (6/10) pst.4 (6/10/20) pst.
hoteller mv.)
Saldogruppe i (forretningsbygg)2 pst.2 pst.
Saldogruppe j (tekniske installasjoner i forretningsbygg og andre næringsbygg)10 pst.10 pst.