Both EU and NON-EU nationals arriving to Norway to work for the first time, will in most cases automatically become part of the tax scheme called PAYE (Pay as you earn). With the PAYE scheme you are taxed a fixed percentage. It is your employer that deducts the taxes from your salary.
When working under the PAYE scheme, your taxes are automatically settled. You will not submit any tax return, however you will receive a receipt from tax authorities that confirms how much you have paid in taxes last year.
All foreign nationals working in Norway need to apply for a tax card. You have the possibility to choose between PAYE fixed taxation or general taxation.
This article will not go into depth on what tax scheme that is most profitable for you as a worker. If you want advice on the tax scheme you as an individual should opt for, please get in touch with us here to get advice.
Despite this, we will briefly look at the main differences between the PAYE scheme and general taxation. When working under the general taxation in Norway, your taxes are calculated based on how much you earn per year. This means, that the more you earn, the higher you are taxed.
When working under general taxation you will get a tax return. The tax return summarizes your total income for the previous year and it is possible to claim deductions related to for example expenses related to your stay in Norway.
Together with your tax return, you will also receive a notice that confirms if you have paid too much or not sufficient amount of taxes. Based on your tax notice you will either get refund into your bank account or receive information that you need to pay back what you owe to Norwegian authorities.
The above information is a general assessment and brief information about the different tax schemes in Norway. Based on experience, we receive several queries on this topic from clients arriving to Norway on either short or long term assignment throughout the year. Feel free to reach out to us here if you need advice on this topic.
ECOVIS is a leading global consulting firm with its origins in Continental Europe with over 9000 employees in 80 countries. In Norway, ECOVIS assists international companies with compliance and global mobility, from company registration through work permit application, legal advice, house finding, VAT returns, tax advisory, accounting to annual tax declarations.