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The Norwegian Tax System Explained
The first thing you do when arriving in Norway is to get a tax card at the Tax authorities. You will not understand anything of what it says, except that everyone in Norway is expected to pay tax, including yourself whatever you will work as here and wherever you come from.
Just so you know, paying tax in Norway is a very serious business. In the U.S most People would have a stroke by looking at how much we are taxed: 36% for almost everyone, less for the poorer and higher for the richer. But in Norway everyone happily pays their tax (except for some FrP voters I guess, considering the Progress Party’s political programme on tax reduction) because people are conscious this is how the State can finance hospitals, schools, roads and other public services. Not paying tax is a crime, just in case you were thinking of screwing the tax authority over. And making jokes about how you screw the tax authorities over, very common thing to brag about in France, is frowned upon in Norway.
Every year around now (March-April) every worker in Norway receives a letter from the tax authority called Selvangivelse. A very obscure Norwegian word for foreigners which simply means “tax return”. The whole point of this paper is to know whether the tax authority owes you money or whether you owe them money. Whether you’ll be able to go to Thailand or to Trondheim this summer. Whether you can buy that MacBook you’ve been dreaming of or just tighten your belt until feriepenger (see below about that).
Unfortunately as a foreigner it takes time to understand what this paper means. The great thing is that the tax authority gives you the choice of receiving this tax return in nynorsk, sami language, bokmål or english. But by default it is sent to you in bokmål the first year, which means that just when you have no idea how the system works, you receive a letter in Norwegian from the Skattetatten with all these numbers in a language you don’t understand either. You are tempted to throw it away but if you remember the word Skatt or are clever enough to ask a Norwegian friend or colleague about it you will quickly find out this is a very important paper. You’ learn later that this paper means either good news or bad news for your bank account this month.
But as a regular person, you just need to verify the numbers (your income should match as well as other items such as what you gave to non-profit organisations and other tax-deductions). You’ll end up looking for that line that says whether you will suddenly get 1.000, 10.000 or even more on your bank account. Or maybe you have to pay them back because something was miscalculated and you actually didn’t pay enough tax last year. All those who bought a house or a flat the year before will annoyingly go around telling everyone they got over 30.000 NOK in tax return. Somehow I always have to pay them back. I heard I can fix this but I can’t remember how.
Although everyone “happily” pays tax, most of us still try to pay as least tax as possible, legally of course. Whole articles give such tips. If you have anything to pay back it’s before the end of May (so one month left from now). Then comes June, where we all receive feriepenger, or what some call “a month without tax”. It looks like the tax authority is offering you a lot of money that month, as you get so much more than your regular salary, but actually they aren’t offering you anything (tax authorities rarely do). You have been paying a little every month to gain the right to paid holidays the year before. So if you’ve started working in Norway in June last year you only paid for feriepenger for half the year and will get less paid holidays that your colleagues.
The other bonus month is December, where we only pay half tax. Well, in our minds only, because the reality of the tax system in Norway is not about giving tax gifts to people. It’s about making people pay the tax of 12 months over 10 and a half months so that it seems like we get more money in June and December. Basically the State saves money for us to spend more on our summer holidays and on Christmas gifts. Hence the nickname “nanny state” given to Scandinavian welfare states like Norway.
I hope I didn’t bore anyone to death yet. I must admit it is very hard to be funny when talking about tax systems, and Norwegian tax system is unfortunately not an exception. However it is a very important concept to at least understand from far away. People study years and years to understand the whole content of Selvangivelse, so being able to read yours is what you should aim for.
On a positive note, remember that we pay tax for a reason: to ensure equality in access to healthcare and education for all in this country. True, Norway could have chosen to be like the U.S, with much lower taxes but also much higher inequality in access to what most European countries see as public services. If you are a multimillionaire and don’t want to pay for health care of all these people, what can I say, move to Luxembourg! No fjords there but you’ll have a great view on all these banks from your balcony.
Comments
19 responses to “The Norwegian Tax System Explained”
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More to come, embrace yourself for when you dive into the inumberable number of indirect taxes, that’s when it gets fun (NOT). It gives you indigestion or worse and the best tip is to completely block the consequences from your memory.
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So helpful! Loving your blog. Helping me happily settle. 🙂
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I’m glad it helps! The tax system is also part of our Norwegian life although it isn’t as funny as dating or drinking or aquevit (or both at the same time) 🙂
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why everything is impossible for foreigners in norway, do foreigners need to be trated shit on any services? BUT THEY MUST BUY OIL FROM NORWAY NOT FROM LIBIA OR RUSSIA AFTER THAT WE EUROPEANS SAVED THEM FROM RUSSIA IN THE 60S
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Sorry, what? The russians were key to drive the germans from Norway after ww2, and the russians left Norway by themselves (as the only country) when the war was over.
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you should read some history dude
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To Fabio: Keep reading this blog and maybe life in Norway won’t seem so impossible. Why are you shouting? (capitol letters). I don’t really understand the last part of your post, but get the feeling you think we owe you something from WW2. Have you ever come across French bureaucracy or Italian for that matter. An neverending maze, where the trick was to speak French so fluently that you could follow the levels of insults until you finally, maybe, got what you needed. And oh yes, the photographs of yourself you had to hand out to God-knows-who. I spent one whole morning in a photobooth that doubled as a sauna by the time I was finished 🙂 I do hope you feel better in a while!
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[…] If you are a foreigner currently working on the black market in Norway and being paid in cash I advise you do everything you can to get another job which is legal and start paying tax: it is also a way of being part of Norwegian society and be protected by the State. For more info on this you can read The Norwegian Tax System Explained […]
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Hi friends. Can you please tell me what is the total tax for nanny & we have to yearly or half yearly & where we have to pay…..kindly please help
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I received from nav sykepenger from january 2014 to october 2014. Is it possible to request to NAV the feriepenger money to be paid in november or december instead of waiting next june 2015, since my relation with NAV has been terminated and i am leaving norway or i have to wait next june. I know for sure a normal employer would pay the feriepenger right away when you quit your job or get fired
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Hi! I think you should give them a call and ask!
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[…] – If you think paradise is a place where there are no taxes. That poor people should stay poor (isn’t it a bit their fault if they are poor?) and there is no way those who earn more should pay higher taxes based on the solidarity principle. […]
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You received it in Bokmål by default ? Lucky you… I got it in Nynorsk 🙁
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[…] Una tradición noruega poco conocida es el tax break navideño, un tejemaneje tributario que suena a pura gloria si se explica mal y pronto: los ciudadanos pagan la mitad de impuestos cuando cobran la nómina de noviembre. Las arcas del país realizan esta concesión a los bolsillos de la gente corriente para que puedan enfrentarse a la escalada consumista navideña. De hecho, en junio hay otro respiro similar para afrontar las vacaciones de verano. Increíble, ¿verdad? Tanto que no es del todo cierto… El fisco noruego recauda lo que falta, mes a mes, durante el resto del año (o al siguiente). […]
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I enjoyed your article, but if they are simply saving your own money out for vacation, that is **not** “paid vacation”, that is simply what many Americans do – saving money to take time off. Paid vacation would be in addition to the 5 weeks where you take time off and get paid for it but don’t have to save up for the days. Can you clarify this for me?
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I paid the tax about 300,000 NOk to the norwegian government during my stayed in Norway from september 2014 to december 2017. Do Now I am not living there. So do you have any idea that I can get that amount?????
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[…] if you disagree with their assessment you can claim it on your Selvangivelse (tax assessment, see here for more explanations about […]
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You forgot about the two most outrageous taxes of all.
First is the MOM’s almost everything you purchase after you pay your 43% tax to Uncle Johann you must pay an additional 25% if you want to do something with your money. I just bought a tea infuser with after tax it was 39 kroners and boom due to MOM”s I paid 49 for it. Some taxes are at 12.5% but it sucks that you have to pay even more. The second tax is the boom penger just to drive around from Majorstua to Bekkestua its about 8 dollars for boom penger everyday! Also, none of this socialist stuff is free its just rationed care and redistribution of wealth. Make everyone suck equally that’s what I think of it. -
To whom it may concern,
A US citizen works for the Norwegian government whose contract is delayed for 3 months and unable to pay taxes on a cash bonus which will be turned over to the Norwegian government as unclaimed. Can he/she return to Norway after the contract ends to pay taxes on the unclaimed cash bonus and get a hold of that money?
Any suggestions are greatly appreciated.
Sincerely yours,
Danielle
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