What changes about tax in Norway in 2022?
Next year will see changes in the taxes you pay on your income in Norway, increases to the cost of several everyday items and new rules for how much you can deduct from your annual bill.
Lower income tax for the majority
Most wage earners in Norway will pay lower taxes in the new year. Those who earn less than 750,000 kroner per year will pay less in taxes. According to the government, around 82 percent will pay less or the same in taxes.
In addition, those aged between 17 and 29 who earn less than 535,000 kroner will receive a tax credit of up to 5,170 kroner.
Residents of Norway pay an income tax of 22 percent, in addition to a bracketed tax that is calculated based on your income.
Increased bracket tax for higher earners
Norway's bracket tax, an incremental tax paid based on your earnings and paid alongside the flat rate, will be raised for higher earners. In general, income tax will become higher for those who earn more than 643,800 kroner a year and the entry points for steps three and four for the incremental tax will be lowered. In addition, a fifth step for the highest earners, who make more than 2 million kroner, will be introduced.
READ ALSO: What changes about life in Norway in 2022?
Petrol to cost more
The cost of fuel will go up considerably due to hiked taxes on petrol and diesel. Petrol tax is set to rise to 1.60 kroner per litre, and diesel tax will increase to 1.87 kroner per litre.
Wealth tax increases and changes
The wealth tax will be increased to 0.95 percent of personal assets, and for those who have assets of more than 20 million kroner (40 million for spouses), a rate of 1.1 percent will apply.
Houses with a valuation of more than 10 million kroner will receive an increase in taxation. Primary homes are currently valued at 25 percent of market value. The portion of a house valued above 10 million kroner (for example, five million kroner if the property is worth 15 million), will be taxed at 50 percent of market value.
The valuation of shares and fixed assets will increase from 55 percent to 75 percent from the income year 2022.
Union deductibles to increase
People who are members of a trade union will receive a tax deduction of 5,800 kroner. The union deductible was previously 3,850 kroner. In 2023 the deduction will increase to 7,700 kroner.
Deduction for gifts and donations to voluntary organisations will be reduced
The maximum tax deduction you can claim for donations to voluntary organisations will be halved from 50,000 kroner to 25,000 kroner.
Duty-free rules change
The duty-free quota rules will be changed from January 1st, meaning it will no longer be possible to replace the tobacco quota with 1.5 litres of wine or beer. This will come as a blow to those who don't smoke but like to grab a discount at duty-free.
Tobacco will become more expensive
The tobacco tax will increase by five percent above the regular price adjustment. For example, the tax on a pack of twenty cigarettes will increase to 59 kroner. For snus, the tax increases from 85 kroner per 100 grams to 90 kroner per 100 grams.
CO2 tax to increase
The CO2 tax will also be increased, but road and motor insurance tax will be slashed. The travel deduction for commuters will change too. As of the income year 2022, the current two rates for travel deductions will be replaced by one common kilometre rate of NOK 1.65 per kilometre.
Electricity tax to change
Electricity tax will see a slight decrease of 8 øre (an øre is a hundredth of a krone) per kilowatt-hour during the winter and 1.5 øre during the rest of the year.
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Lower income tax for the majority
Most wage earners in Norway will pay lower taxes in the new year. Those who earn less than 750,000 kroner per year will pay less in taxes. According to the government, around 82 percent will pay less or the same in taxes.
In addition, those aged between 17 and 29 who earn less than 535,000 kroner will receive a tax credit of up to 5,170 kroner.
Residents of Norway pay an income tax of 22 percent, in addition to a bracketed tax that is calculated based on your income.
Increased bracket tax for higher earners
Norway's bracket tax, an incremental tax paid based on your earnings and paid alongside the flat rate, will be raised for higher earners. In general, income tax will become higher for those who earn more than 643,800 kroner a year and the entry points for steps three and four for the incremental tax will be lowered. In addition, a fifth step for the highest earners, who make more than 2 million kroner, will be introduced.
READ ALSO: What changes about life in Norway in 2022?
Petrol to cost more
The cost of fuel will go up considerably due to hiked taxes on petrol and diesel. Petrol tax is set to rise to 1.60 kroner per litre, and diesel tax will increase to 1.87 kroner per litre.
Wealth tax increases and changes
The wealth tax will be increased to 0.95 percent of personal assets, and for those who have assets of more than 20 million kroner (40 million for spouses), a rate of 1.1 percent will apply.
Houses with a valuation of more than 10 million kroner will receive an increase in taxation. Primary homes are currently valued at 25 percent of market value. The portion of a house valued above 10 million kroner (for example, five million kroner if the property is worth 15 million), will be taxed at 50 percent of market value.
The valuation of shares and fixed assets will increase from 55 percent to 75 percent from the income year 2022.
Union deductibles to increase
People who are members of a trade union will receive a tax deduction of 5,800 kroner. The union deductible was previously 3,850 kroner. In 2023 the deduction will increase to 7,700 kroner.
Deduction for gifts and donations to voluntary organisations will be reduced
The maximum tax deduction you can claim for donations to voluntary organisations will be halved from 50,000 kroner to 25,000 kroner.
Duty-free rules change
The duty-free quota rules will be changed from January 1st, meaning it will no longer be possible to replace the tobacco quota with 1.5 litres of wine or beer. This will come as a blow to those who don't smoke but like to grab a discount at duty-free.
Tobacco will become more expensive
The tobacco tax will increase by five percent above the regular price adjustment. For example, the tax on a pack of twenty cigarettes will increase to 59 kroner. For snus, the tax increases from 85 kroner per 100 grams to 90 kroner per 100 grams.
CO2 tax to increase
The CO2 tax will also be increased, but road and motor insurance tax will be slashed. The travel deduction for commuters will change too. As of the income year 2022, the current two rates for travel deductions will be replaced by one common kilometre rate of NOK 1.65 per kilometre.
Electricity tax to change
Electricity tax will see a slight decrease of 8 øre (an øre is a hundredth of a krone) per kilowatt-hour during the winter and 1.5 øre during the rest of the year.
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