National Budget 2011

National Budget 2011

These pages contain information in English about Norway's National Budget for 2011, presented to the Storting as Report no. 1 (2010-2011) on 5 October 2010. The National Budget presents the Government's programme for the implementation of economic policy and projections for the Norwegian Economy.

Royal Norwegian Ministry of Finance

Sigbjørn Johnsen
Minister of Finance
October 2010

Fiscal Budget 2011: A modest fiscal tightening

Level playing field for suppliers of electronic services

New Strategy Council for the Government Pension Fund Global

Main features of the Government’s tax programme for 2011

The National Budget 2011 - A summary

Budget 2011 - Key figures for the Norwegian economy

Main features of the Government’s tax programme for 2011

Summary of Chapter 1 of the White Paper to the Parliament

5 October 2010
Ministry of Finance

 

The Government’s objectives for its tax and fiscal policies are to ensure public revenue, help to bring about a just distribution of wealth and a better environment, promote employment throughout the entire country and improve the functioning of the economy.

The international economic situation, with alarmingly high government debt in many countries and an uncertain growth outlook, serves as a pertinent reminder of the need to hold a tight rein on our own economy and to promote prudent management of resources. The tax system plays a central role in this respect. The tax system should be designed so as to avoid unfortunate tax planning and inefficient use of resources. It should stimulate labour supply, and the tax bases should be based on actual economic circumstances, so that taxes automatically have a stabilizing effect on the economy. The Government has proven that it is possible to combine a more efficient tax system with a higher degree of redistribution of wealth and a greater focus on safeguarding the environment, without changing the overall level of taxation.

The 2006 tax reform provided a fairer tax system by largely equalizing the wide difference in the highest marginal tax rates on labour income and dividends. The revenues from tax on dividends have increased more than threefold from 2006 to 2008. The redistributive effect of tax on dividends is illustrated by the fact that roughly 90 per cent of equities (assessed value) are owned by the 10 per cent wealthiest people in Norway. Changes in inheritance tax and especially tax on net wealth have also enhanced the redistributive impact of the tax system. Some of the beneficial redistributive effects will come to force this year as a result of the increase in the basic tax allowance for tax on net wealth and the new valuation system for homes which is implemented this autumn. Efforts to combat tax evasion have been stepped up nationally and through international co-operation.

The Government has raised environmental taxes. Environmental and energy-related taxes have increased by almost NOK 1.7 billion from 2005 to 2010. Furthermore, the Government has prioritized to reduce fees exceeding the State’s costs of providing services. Overpriced fees have been reduced by a total of more than NOK 550 million over the period.

In the Budget for 2011, the Government proposes changes in the tax system that will give many older employees stronger incentives to work than the current rules do. This adjustment of the tax system to the pension reform ensures favourable tax terms for combining work with pension, cf. the following section. Overall, the tax programme for 2011 implies a continuation and a strengthening of the beneficial redistributive impact of the tax system.

 

Adjusting the tax system to the pension reform

The tax system should encourage people to work. A large labour force is crucial for maintaining the level of welfare. In addition, working life participation is the best insurance against low income and poor living conditions for the individual. The new pension system is better tailored for individuals to combine work with pension. The current tax rules, however, fit the old pension system and to a large degree encourage people either to work or to receive a full pension. There is a particular misfit between the so called tax limitation rule and the new pension system. The tax limitation rule entails higher marginal tax on earned income for low and middle income pensioners than for other wage earners. It also allows for unfortunate adaptations. For example, tax on earned income may be reduced by drawing a small pension. In some cases, taxpayers can even increase their income after tax by working less. The tax limitation rule also entails very high marginal tax on capital income and extra taxation of wealth for pensioners with relatively low income.

The Government therefore proposes changes to the tax system to provide better incentives for people to work when drawing a pension.

The proposal implies that the tax limitation rule for early-retirement and old-age pensioners will be replaced by a new tax allowance for pension income. The allowance ensures that people who only receive the minimum pension will continue not to pay income tax. The allowance will only be scaled down against pension income, so that the marginal tax on earned income will be reduced to the same level as for wage earners. The marginal tax on capital for low-income pensioners will also be reduced to the same level as for other taxpayers.

Under the current tax limitation rule, spouses’ income and wealth are assessed together, and the upper tax limitation for married couples is less than twice the upper tax limitation for single taxpayers. It is proposed that the new tax allowance is determined regardless of the spouse’s income, and married early-retirement and old-age pensioners will each have their own allowance.

In addition, the Government proposes to increase the pension income social security contribution and discontinue the special allowance for age.

Altogether, the proposals will provide pensioners with NOK 1.35 billion in tax relief accrued in 2011 and have beneficial redistributive effects. The proposal will entail lower taxes for roughly 59 per cent of early-retirement and old-age pensioners, no change in taxes for roughly 11 per cent, and higher taxes for around 30 per cent. The early-retirement and old-age pensioners who will be subject to higher taxes will generally have a high capacity to pay taxes. The changes will be highly beneficial to many retired couples. This is because, in contrast to the current tax limitation rule, the new tax allowance is not reduced as a result of the spouse’s income, and the combined value of two individual allowances is greater than the value of the current tax limitation rule for married couples.


Further tax proposals in the 2011 budget:

  • VAT is introduced on purchases of electronic services from abroad by private individuals. This is scheduled to be implemented from 1 July 2011.
  • Basic tax on mineral oil is raised by NOK 0.081 per litre in addition to price adjustment, which corresponds to an increase of NOK 0.01 per kWh.
  • The initial registration tax is adjusted to contribute to lower CO2 emissions from newly registered vehicles.
  • Tax on snuff and chewing tobacco is increased by 10 per cent in real terms, and tax on other tobacco products is raised by 5 per cent in real terms.
  • Taxes on alcohol are raised by 5 per cent in real terms.
  • Sector taxes and overpriced fees are reduced by a total of NOK 38 million accrued.
  • The allowance for donations to voluntary organizations is expanded to include organizations headquartered in the EEA area. Allowance for donations to non-nationwide religious and philosophical communities is discontinued.
  • Gains on realization (sale) of holdings in housing cooperatives and housing companies are no longer tax-free under the tax exemption method.
  • Municipal authorities will be given the opportunity to tax all commercial property that is not explicitly exempt under the Property Tax Act, without having to levy property tax in the entire municipality. This applies to service enterprises, for example hotels, shops and offices, as well as commercial properties that are currently defined as “mills and factories”. The municipal authorities may still tax “mills and factories” pursuant to the current rules.
  • Sweden and Norway are currently planning a joint market for electricity certificates from 2012. The Government proposes to include income from electricity certificates in the special tax base for resource rent tax on production of hydroelectric power.
  • In order to clarify tax legislation and close tax loopholes, it is proposed that the value of waterfall rights should not be deductible in the special tax base for resource rent tax on production of hydroelectric power.
  • In addition, a proposal suggesting updates and more precise definitions in the regulation of Norway’s tax credit scheme for research and development (“Skattefunn”) has been sent out on a public review. The proposal includes authorizing by law the exchange of information and sanctions.


Distributional effects

Table 1.1 indicates the average change in taxes as a result of the proposed tax system for 2011, broken down according to gross income. Persons with a gross income under NOK 300,000 will on average enjoy reduced taxes while persons with a gross income above NOK 300,000 will on average be faced with tax increases. The calculations were carried out by Statistics Norway, using the tax model LOTTE.

Table 1.1 Average tax changes for different gross income brackets1 when comparing the proposed 2011 tax system with 2010 rules adjusted for wage growth (benchmark figures for 2011). Persons aged 17 and older. NOK

Gross income.

NOK 1000

No. of people

Average tax,
benchmark
figures for 2011

Average tax change
under the proposal

Average tax
under the proposal.
Per cent

0-150

562,000

5,700

-1,200

7.6

150-200

350,800

16,100

-2,700

9.2

200-250

352,900

29,700

-1,300

13.2

250-300

345,600

47,400

-500

17.3

300-350

356,500

66,000

200

20.3

350-400

364,500

83,000

500

22.1

400-450

325,600

99,300

600

23.4

450-500

265,600

116,200

600

24.5

500-600

331,100

144,300

600

26.5

600-750

232,400

194,300

700

29.2

750-1 000

151,500

275,100

700

32.2

1,000- 2,000

99,200

464,400

900

36.2

2,000-3,000

10,700

941,300

1,000

39.4

Over 3,000

7,700

2,651,800

1,600

41.9

In all

3,756,200

96,900

-300

24.9

1) Does not include changes in indirect taxes. Rounded to the nearest NOK 100.
Sources: Statistics Norway and the Ministry of Finance

 

Revenue effects of the tax proposals

In 2005 the Government committed to return taxes to the 2004 level and keep them at this level. The tax readjustment pledge was fulfilled in the National Budget for 2007. In connection with subsequent budgets and the various measures introduced to mitigate the consequences of the financial crisis, tax relief corresponding to a total of NOK 286 million has been given compared with the 2007 budget. The tax proposal for 2011 represents a fairly unchanged tax level compared to the National Budget for 2010.


Table 1.2 Comparison of the Government’s tax pledge and the tax programme for 2011. Negative figures indicate tax relief. NOK millions

 

Accrued

Status of the tax pledge prior to the 2011 budget

 

Change in the level of the 2010 National Budget compared to the 2007 National Budget

-286

Tax increases in the 2010 Revised National Budget with revenue effects in 2010 and 2011

70

Carryover from the tax pledge (opportunity for tax rises in the 2011 budget within the constraints of the tax pledge)

-216

New changes in taxes in the 2011 budget

 

Tax proposals that will yield revenue in 2011 (cf. table 1.3)1

-167

Tax proposals that will yield revenue in 2010 and 2012

73

Total new tax rises in the 2011 budget

-94

Deviation from the tax pledge as a result of the Government’s tax programme for 2011

-310

1) The deviation from table 1.3 is due to the fact that changes in the resource tax (NOK 5 million accrued in 2011) is held outside the tax pledge.
Source: Ministry of Finance.

 

Table 1.3 shows the calculated revenue effects of the Government’s tax proposals for 2011. The revenue effects have been calculated relative to a benchmark system for 2011. The benchmark system for tax is based on the 2010 rules, but where all the income figures in the general rates structure have been adjusted to the 2011 level using an estimated pay growth from 2010 to 2011 of 3¼ per cent. This means that a taxpayer whose “ordinary income” and “personal income” both increase by 3¼ per cent will have the same average income tax level in the benchmark system for 2011 as in 2010. Similarly, the tax-free allowance for net wealth tax is adjusted in the benchmark system so that a person with an average net wealth composition will have the same tax on net wealth in the benchmark system for 2011 as in 2010, measured as a share of their net wealth. Special allowances and other limits on personal taxation have been adjusted using an estimated inflation rate from 2010 to 2011 of 1.8 per cent. In the benchmark system for indirect taxes, all unit taxes have been adjusted by the estimated rate of inflation from 2010 to 2011. In real terms, the benchmark system thus entails no change in tax levels from 2010 to 2011.

Table 1.3 Estimated revenue effect of the Government’s tax programme for 2011. Negative figures indicate tax relief. The figures have been calculated relative to a benchmark system for 2011. NOK millions

Accrued

Booked

Tax base for income tax for individuals

-966

-805

Adapt the tax system to the pension reform

-1 350

-1 080

Increase the allowance for donations to voluntary organizations

-3

-6

Carry on nominal amounts etc

387

281

     

Business taxation

7

3

Adjust the resource rent tax

5

0

Restrict the exemption method linked to holdings in housing cooperatives and housing stock companies

2

3

     

Environmental, energy and vehicle taxes

130

120

Increase basic tax on mineral oil by NOK 0.081 per litre (NOK 0.01 per kWh)

130

120

Adjust the initial registration tax on vehicles

0

0

        

Other changes

705

613

Introduce VAT on purchases of electronic services from abroad

75

38

Increase tax on snuff by 10 per cent and tax on other tobacco products by 5 per cent above price adjustment

280

255

Increase taxes on alcohol by 5 per cent above price adjustment

350

320

        

Sector taxes and overpriced fees

-38

-38

Change the sector taxes of the Financial Supervisory Authority of Norway, the Norwegian Coastal Administration and the Norwegian Food Safety Authority

-36

-36

Reduce the fees to the Norwegian Public Roads Administration

-2

-2

TOTAL NEW CHANGES IN TAXES AND FEES IN 2011

-162

-107

Source: Ministry of Finance.

 

Table 1.4 presents estimated booked tax revenue for 2011 and figures for the two preceding years.

Table 1.4 Booked tax revenue. NOK millions

 

Accounts 2009

Estimate 2010

Proposal 2011

Taxes on wealth and income

190,457

186,100

200,600

Tax on inheritance and gifts

2,431

2,200

1,800

Direct and indirect taxes on petroleum extraction

166,704

153,900

171,600

Tax on CO2 emissions in petroleum activities on the continental shelf

2,215

2,200

2,300

Tax on NOX emissions in petroleum activities on the continental shelf

47

0

0

Customs duties

2,150

2,400

2,400

Auction revenue from customs quotas

92

87

130

Value added tax

185,178

196,500

206,700

Tax on alcoholic beverages

11,241

11,350

12,325

Tax on tobacco goods

7,806

7,350

8,000

Motor vehicle registration tax

15,875

19,500

19,700

Annual tax on motor vehicles

8,320

8,645

8,900

Annual weight-based tax

346

331

342

Re-registration tax

2,296

2,274

2,350

Marine engine tax

174

220

233

Road use tax on petrol

7,703

7,400

7,250

Road use tax on diesel

7,770

8,500

9,400

Electricity consumption tax

6,790

7,300

7,700

Tax on mineral oil (base tax on heating oil)

1,232

1,495

1,700

Lubricating oil tax,etc

88

99

105

CO2 tax

4,431

4,475

4,755

Sulphur tax

65

47

50

Tax on the final treatment of waste

491

285

230

Tax on trichloreten

2

2

2

Tax on tetrachloreten

1

2

2

Tax on hydrofluorocarbons and perfluorocarbons

236

210

222

Tax on emissions of NOX

78

65

69

Environmental tax on pesticides

0

66

66

Tax related to other subsea natural resources than petroleum

0

0

1

Tax related to prospection and excavation rights for minerals

0

1

2

Tax on chocolate and confectionery

1,127

1,169

1,236

Tax on non-alcoholic beverages, etc

1,642

1,780

1,883

Sugar tax, etc.

197

207

219

Tax on beverage packaging

     

Base tax on disposable packaging

769

811

858

Environmental tax on carton

198

163

172

Environmental tax on plastics

67

44

47

Environmental tax on metals

147

135

143

Environmental tax on glass

51

60

63

Stamp duty

4,954

5,400

5,700

Sectoral taxes1

1,261

1,995

2,200

Tax on frequencies, etc.

193

199

203

Social security contribution

90,800

90,100

94,700

Employer’s social security contribution

128,089

130,300

135,100

Total direct and indirect taxes and social security system revenue, the Fiscal Budget

853,714

855,366

911,458

1) This amount includes taxes under various ministries. It also includes phased out taxes.
Source: Ministry of Finance.

 

Tax rates and value limits

Table 1.5 provides an overview of important rates and thresholds in the Government’s proposed tax programme for 2011. The table also shows the tax rates for 2010 and the change from 2010 to 2011. Because the figures here are rounded, the proportional increase of the general allowances and thresholds from 2010 to 2011 may deviate from the estimated wage increase of 3 ¼ per cent and of the estimated price increase of 1.8 per cent.

Table 1.5 Direct tax rates and thresholds for 2010 and proposals for 2011

 

2010 rules

Proposal 2011

Change 2010–2011

Tax rate on ”ordinary income”

   

Personal taxpayers1

28 per cent

28 per cent

-

Companies

28 per cent

28 per cent

-

Surtax

     

Bracket 1

     

Threshold

NOK 456,400

NOK 471,200

3 ¼ per cent

Rate2

9.0 per cent

9.0 per cent

-

Bracket 2

     

Threshold

NOK 741,700

NOK 765,800

3 ¼ per cent

Rate

12.0 per cent

12.0 per cent

-

Social security contribution

     

Lower threshold for payment of employee’s social security contribution

NOK 39,600

NOK 39,600

-

Levelling rate

25.0 per cent

25.0 per cent

-

Rate

     

Wage income

7.8 per cent

7.8 per cent

-

Income from self-employment in primary sector

7.8 per cent

7.8 per cent

-

Income from other self-employment

11.0 per cent

11.0 per cent

-

Pension income, etc.

3.0 per cent

4.7 per cent

1.7 percentage points

Employers’ social security contribution

     

Zone I

14.1 per cent

14.1 per cent

-

Zone Ia3

14.1 per cent

14.1 per cent

-

Zone II

10.6 per cent

10.6 per cent

-

Zone III

6.4 per cent

6.4 per cent

-

Zone IV

5.1 per cent

5.1 per cent

-

Zone IVa

7.9 per cent

7.9 per cent

-

Zone V

0.0 per cent

0.0 per cent

-

Maximum effective marginal tax rates

     

Wage income excl. employer’s social security contribution

47.8 per cent

47.8 per cent

-

Wage income incl. employer’s social security contribution

54.3 per cent

54.3 per cent

-

Pension income4

43.0 per cent

44.7 per cent

1.7 percentage points

Primary sector self-employment income

47.8 per cent

47.8 per cent

-

Other self-employment income

51.0 per cent

51.0 per cent

-

Dividends and withdrawals5

48.2 per cent

48.2 per cent

-

Personal allowance

     

Class 1

NOK 42,210

NOK 43,600

3 ¼ per cent

Class 26

NOK 84,420

NOK 87,200

3 ¼ per cent

Basic allowance in wage income

     

Rate

36.0 per cent

36.0 per cent

-

Lower limit

NOK 4,000

NOK 4,000

-

Upper limit7

NOK 72,800

NOK 75,150

3 ¼ per cent

Basic allowance in pension income

     

Rate

26.0 per cent

26.0 per cent

-

Lower limit

NOK 4,000

NOK 4,000

-

Upper limit

NOK 60,950

NOK 62,950

3 ¼ per cent

Special wage income allowance8

NOK 31,800

NOK 31,800

-

Special allowance for age

NOK 19,368

-

Abolished

Special allowance for disability, etc.

NOK 19,368

NOK 32,000

65 ¼ per cent

Special tax allowance for pensioners, etc.9

     

Maximum amount

 

NOK 28,150

New

Downscaling, level 1

     

Threshold

 

NOK 158,650

New

Rate

 

15.3 per cent

New

Downscaling, level 2

     

Threshold

 

NOK 242,000

New

Rate

 

6.0 per cent

New

The tax limitation rule for the disabled, etc.10

     

Levelling rate

55 per cent

55 per cent

-

Tax-free net income

     

Single

NOK 113,700

NOK 117,400

3 ¼ per cent

Married couple

NOK 206,700

-

Abolished

Married person11

 

NOK 106,700

New

Net wealth supplement

     

Rate

1.5 per cent

1.5 per cent

-

Threshold

NOK 200,000

-

Abolished

Threshold for single

 

NOK 200,000

New

Threshold for married person

 

NOK 100,000

New

Special allowance for taxpayers in Finnmark and Nord-Troms

     

Class 1

NOK 15,000

NOK 15,000

-

Class 2

NOK 30,000

NOK 30,000

-

Seamen’s allowance

     

Rate

30.0 per cent

30.0 per cent

-

Upper limit

NOK 80,000

NOK 80,000

-

Fishermen’s allowance

     

Rate

30.0 per cent

30.0 per cent

-

Upper limit

NOK 150,000

NOK 150,000

-

Special allowance for self-employed within agriculture, etc.

     

Income-independent allowance

NOK 54,200

NOK 54,200

-

Allowance rate above income-independent allowance

32.0 per cent

32.0 per cent

-

Maximum total allowance

NOK 142,000

NOK 142,000

-

Special allowance for high expenses linked to illness

     

Lower limit

NOK 9,180

NOK 9,180

-

Maximum annual allowance for payments to individual pension schemes

NOK 15,000

NOK 15,000

-

Allowance for travel between home and work

     

Rate per km

NOK 1.50

NOK 1.50

-

Lower limit for allowance

NOK 13,700

NOK 13,950

1.8 per cent

Maximum allowance for donations to voluntary organisations

NOK 12,000

NOK 12,000

-

Maximum allowance for paid union fees etc.

NOK 3,660

NOK 3,660

-

Home investment savings scheme for people under 34 (BSU)

     

Tax deduction rate

20.0 per cent

20.0 per cent

-

Maximum annual savings

NOK 20,000

NOK 20,000

-

Maximum total savings in the scheme

NOK 150,000

NOK 150,000

-

Parental allowance for documented expenses for childminding and childcare

     

Upper limit

     

One child

NOK 25,000

NOK 25,000

-

Supplement per additional child

NOK 15,000

NOK 15,000

-

Tax on net wealth12

     

Municipal

     

Threshold

NOK 700,000

NOK 700,000

-

Rate

0.7 per cent

0.7 per cent

-

State

     

Threshold

NOK 700,000

NOK 700,000

-

Rate

0.4 per cent

0.4 per cent

-

Inheritance tax

     

Threshold

     

Level 1

NOK 470,000

NOK 470,000

-

Level 2

NOK 800,000

NOK 800,000

-

Rates

     

Children and parents

     

Level 1

6 per cent

6 per cent

-

Level 2

10 per cent

10 per cent

-

Other beneficiaries

   

-

Level 1

8 per cent

8 per cent

-

Level 2

15 per cent

15 per cent

-

Discount on shares13

40 per cent

40 per cent

-

Wage allowance under the risk free rate of return allowance for sole proprietorships

15.0 per cent

15.0 per cent

-

Depreciation rates

     

Asset group a (office equipment, etc.)

30 per cent

30 per cent

-

Asset group b (acquired goodwill)

20 per cent

20 per cent

-

Asset group c (lorries, buses, vans, etc.)

20 per cent

20 per cent

-

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

20 per cent

20 per cent

-

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

14 per cent

14 per cent

-

Asset group f (aircraft, helicopters)

12 per cent

12 per cent

-

Asset group g (systems for transfer and distribution of electricity and electro technical equipment in power companies)

5 per cent

5 per cent

-

Asset group h (buildings and facilities, hotels, etc.)14

4 (8) per cent

4 (8) per cent

-

Asset group i (business buildings)

2 per cent

2 per cent

-

Asset group j (technical installations in business and other commercial buildings)

10 per cent

10 er cent

-

1) For taxpayers in Nord-Troms and Finnmark, the rate is 24.5 per cent.
2) For taxpayers in Nord-Troms and Finnmark, the rate is 7 per cent in bracket 1.
3) In zone Ia, employers’ social security contribution shall be paid at a rate of 10.6 per cent until the difference between what the enterprise actually pays and what the enterprise would have paid at a rate of 14.1 per cent equals the de minimis state aid threshold. In 2011, the threshold is NOK 530,000 per enterprise. For road transport companies in zone Ia, the threshold is NOK 265,000.
4)For pensioners that are subject to the tax limitation rule, the maximum effective marginal tax rate may reach 55 per cent.
5) Including 28 per cent corporation tax.
6) Taxpayers who support their spouse and single parents are taxed in class 2.
7) The sum of the basic allowance in wage income and of the basic allowance in pension income is limited upwards to the maximum basic allowance in wage income, i.e. NOK 75,150 in this proposal.
8) Taxpayers who only have wage income shall have the highest of the basic allowance in wage income and the special wage income allowance.
9) Replaces i.a. the tax limitation rule 
10)The tax limitation rule also applies to single parents, but only if they receive transitional support.
11) Married disabled people that receive spouse supplement, will retain present tax-free net income for married couples (but wage adjusted).
12) The threshold values are for single taxpayers. For married couples who are assessed together for joint assets, the threshold values are double of those shown in the table.
13)The discount applies to non-listed shares and shares in general partnerships and limited partnerships. The discount is limited to an inheritance tax basis for these kinds of shares of up to NOK 10 million per beneficiary.
14) Simply structured buildings with an expected commercial lifetime of less than 20 years can be depreciated at the rate of 8 per cent.
Source: Ministry of Finance

 

Table 1.6 presents current rates for the value added tax and for other indirect taxes as well as rate proposals for 2011. All rates have in principle been adjusted 1.8 per cent upwards from 2010 to 2011 to account for anticipated price increases. Small deviations from this are due to rounding.

Table 1.6 Indirect tax rates for 2010 and proposed rates for 2011

Tax category

Current rate

Proposal 2011

Percentage change

Value-added tax, per cent of sale price1

     

General rate

25

25

-

Reduced rate

14

14

-

Low rate

8

8

-

Tax on alcoholic beverages

     

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

6.18

6.61

7.0

Other alcoholic beverages containing from 4.7 to 22 pct. alcohol by volume, NOK per pct. alcohol and per litre

4.03

4.31

6.9

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

     

a) 0.0-0.7 pct. alcohol by volume

0.00

0.00

-

b) 0.7–2.7 pct. alcohol by volume

2.76

2.95

6.9

c) 2.7–3.7 pct. alcohol by volume

10.41

11.13

6.9

d) 3.7–4.7 pct. alcohol by volume

18.04

19.28

6.9

Tax on tobacco products

     

Cigars, NOK per 100 gram

212

227

7.1

Cigarettes, NOK per 100 unit

212

227

7.1

Smoking tobacco, NOK per 100 gram

212

227

7.1

Snuff, NOK per 100 gram

82

92

12.2

Chewing tobacco, NOK per 100 gram

82

92

12.2

Cigarette rolling paper, NOK per 100 units

3.23

3.45

6.8

Motor vehicle registration tax

     

Passenger cars etc. Tax group a2

     

Weight, NOK per kg

     

first 1,150 kg

35.67

36.31

1.8

next 250 kg

77.74

79.14

1.8

next 100 kg

155.51

158.31

1.8

remainder

180.85

184.11

1.8

Engine power, NOK per kW

     

first 65 kW

55.10

0

-100.0

next 25 kW

481.00

466.00

-3.1

next 40 kW

1,297.33

1,320.68

1.8

remainder

2,702.77

2,751.42

1.8

CO2 emissions, NOK per g/km

     

first 115 g per km

0.00

0.00

-

next 20 g per km

725.00

738.00

1.8

next 40 g per km

731.00

744.00

1.8

next 70 g per km

1,704.00

1,735.00

1.8

remainder

2,735.00

2,784.00

1.8

Deduction per gram emission under 50 g per km, valid only for vehicles emitting under 50 g per km

-609.00

-738.00

21.2

Deduction per gram emission under 115 g per km, valid down until 50 g per km and only for vehicles emitting less than 115 g per km

-609.00

-620.00

1.8

Vans class 2. Tax group b3

     

per cent of car tax

22

22

-

Camper vans. Tax group c4

     

per cent of car tax

22

22

-

Caterpillar vehicles. Tax group e

     

per cent of basis for value tax

36

36

-

Motorbikes. Tax group f

     

Tax per unit, NOK

10,283

10,468

1.8

Engine power, NOK per kW

     

first 11 kW

0

0

-

remainder

457.60

465.84

1.8

Piston displacement tax, NOK per cm3

     

first 125 cm3

0

0

-

next 775 cm3

35.31

35.95

1.8

remainder

77.45

78.84

1.8

Snowscooters. Tax group g

     

Weight, NOK per kg

     

first 100 kg

14.49

14.75

1.8

next 100 kg

28.99

29.51

1.8

remainder

57.95

58.99

1.8

Engine power, NOK per kW

     

first 20 kW

38.65

39.35

1.8

next 20 kW

77.27

78.66

1.8

remainder

154.53

157.31

1.8

Piston displacement, NOK per cm3

     

first 200 cm3

3.03

3.08

1.7

next 200 cm3

6.04

6.15

1.8

remainder

12.07

12.29

1.8

Taxis. Tax group h5

     

per cent of car tax

40

40

-

Veteran cars. Tax group i

     

Tax per unit, NOK

3,386

3,447

1.8

Minibuses. Tax group j6

     

per cent of car tax

40

40

-

Annual tax, NOK per year

     

Petrol vehicles and diesel vehicles with factory-fitted particle filter

2,790

2,840

1.8

Diesel cars without factory-fitted particle filter

3,245

3,305

1.8

Caravans

1,045

1,065

1.9

Motorbikes

1,705

1,735

1.8

Tractors, mopeds, etc.

395

400

1.3

Annual weight based tax, NOK per year

variable

variable

1.8

Re-registration tax

variable

variable

1.8

Road use tax on petrol, NOK per litre

     

Sulphur-free7

4.54

4.62

1.8

Low-sulphur8

4.58

4.66

1.7

Road use tax on auto diesel, NOK per litre

     

Sulphur-free9

3.56

3.62

1.7

Low-sulphur10

3.61

3.67

1.7

Bio diesel

1.78

1.81

1.7

Marine engine tax, NOK per hp

150.50

153.00

1.7

Electricity consumption tax, NOK 0.01 per kWh

     

General rate

11.01

11.21

1.8

Reduced rate

0.45

0.45

-

Basic tax on mineral oil, etc.

     

Mineral oil, NOK per litre

0.886

0.983

10.9

Mineral oil in the wood processing industry, production of colorants and pigments, NOK per litre

0.126

0.126

-

Lubricant oil tax, NOK per litre

1.80

1.83

1.7

Carbon dioxide tax

     

Petroleum activities, NOK per litre or Sm3

0.47

0.48

2.1

Mineral oil, NOK per litre

0.58

0.59

1.7

Mineral oil for domestic aviation, NOK per litre

0.68

0.69

1.5

Mineral oil in the wood processing, herring meal and fish meal industry, NOK per litre

0.30

0.31

3.3

Petrol, NOK per litre

0.86

0.88

2.3

Natural gas, NOK per Sm3

0.43

0.44

2.3

LPG, NOK per kg

0.65

0.66

1.5

Reduced rate for natural gas, NOK per Sm3

0.05

0.05

-

Sulphur tax, NOK per litre

0.075

0.076

1.3

Tax on NOx emissions, NOK per kg

16.14

16.43

1.8

Tax on the final disposal of waste

     

Landfills, NOK per tonne

275

280

1.8

Landfills with exemption from the ban on dumping waste, NOK per tonne

455

463

1.8

Tax on health and environmentally hazardous chemicals

     

Trichloroethane, NOK per kg

62.06

63.18

1.8

Tetrachloroethane, NOK per kg

62.06

63.18

1.8

Environmental tax on greenhouse gases HFC and PFC

     

NOK per tonne of carbon dioxide equivalents

208.68

212.44

1.8

Tax on chocolate and confectionery, NOK per kg

17.60

17.92

1.8

Tax on non-alcoholic beverages

     

Finished products, NOK per litre

2.76

2.81

1.8

Concentrate (syrup), NOK per litre

16.83

17.13

1.8

Sugar tax, NOK per kg

6.82

6.94

1.8

Tax on beverage containers, NOK per unit

     

Basic tax, disposable packaging

1.02

1.04

2.0

Environmental tax

     

a) Glass and metal

4.97

5.06

1.8

b) Plastic

3.00

3.05

1.7

c) Cardboard and cartons

1.24

1.26

1.6

Stamp duty, per cent of sale price

2.5

2.5

-

1) The change in value-added tax is expressed in percentage points. 
2) Group a: Cars, class 1 vans and buses shorter than 6 metres with up to 17 seats. Piston displacement is used as the tax component for vehicles whose carbon dioxide emissions are not stated. 
3) Group b: Class 2 vans. The change is expressed in percentage points. 
4) Group c: Camper vans. The change is expressed in percentage points.
5) Group h: Taxis and transport for disabled persons. 100 per cent for CO2 component. The change is expressed in percentage points.
6) Group j: Buses shorter than 6 metres with up to 17 seats, where at least 10 are forward-facing. The change is expressed in percentage points.
7) Petrol with a sulphur content of 10 ppm or lower.
8) Petrol with a sulphur content between 10 ppm and 50 ppm.
9) Diesel with a sulphur content of 10 ppm or lower.
10) Diesel with a sulphur content between 10 ppm and 50 ppm.
Source: Ministry of Finance

 

Allocation of tax revenues


Table 1.7 provides a general overview of the main groups of taxes and shows which parts of the public sector that receive revenue from each main group. In total, tax revenues are estimated to amount to NOK 1,054 billions in 2010, of which approx. 86 per cent accrues to central government, just less than 12 per cent to local government and a little over 2 per cent to regional government.

Most of the local and county authorities’ tax revenues come from income tax and tax on net wealth from personal taxpayers. Approx. 32 per cent of the central government’s tax revenues comes from VAT, excise duties and customs duties. Approx. 24 per cent comes from personal taxpayers, while approx. 21 per cent is income tax and tax on net wealth from non-personal taxpayers and employers’ social security contributions in mainland Norway. Approx. 20 per cent of the central government’s revenues in 2010 comes from direct and indirect taxes in the petroleum sector. Other taxes constitute approx. 3 per cent.

Table 1.7 Accrued taxes distributed according to creditors. Estimate for 2010. NOK billions

 

Central government

Local government

Regional government

In total

Individual taxpayers

218.5

115.9

22.2

356.7

Tax on ”ordinary income”

104.5

107.4

22.2

234.2

Surtax

19.0

-

-

19.0

Employee’s and self-employed’s social security contributions

90.2

-

-

90.2

Tax on net wealth

4.8

8.5

-

13.3

Businesses (whose taxes are payable the year after the income year)

59.2

1.3

0.2

60.8

Income tax (including power stations)

58.9

1.3

0.2

60.4

Tax on net wealth

0.3

-

-

0.3

Property tax

-

6.6

-

6.6

Employers’ social security contributions

132.0

-

-

132.0

Indirect taxes

290.7

-

-

290.7

VAT

194.4

-

-

194.4

Excise duties and customs duties

96.3

-

-

96.3

Petroleum

181.4

-

-

181.4

Tax on income

177.6

-

-

177.6

Extraction tax

3.8

-

-

3.8

Other direct and indirect taxes

27.8

0.5

-

28.4

Social security and pension premiums, other central government
and social security accounts

21.0

-

-

21.0

Tax on dividends to foreign shareholders

1.7

-

-

1.7

Inheritance and gift tax

2.2

-

-

2.2

Other taxes

2.9

0.5

-

3.4

Total direct and indirect taxes

909.7

124.3

22.5

1,056.5

Of which direct taxes

619.0

124.3

22.5

765.8

Source: Ministry of Finance