Expat Tips for the Tax Return

How much tax will you be paying this year? Perhaps it could be less than you think with our top expat tax tips.

It's that time of the year again when we get out the calculators to discover just how much we owe the Norwegian government for the pleasure of living here. Over the last few days, you should have received your tax return in your Altinn inbox. If you haven't received one yet, keep your eyes peeled.

This year, 3.6 million provisional tax returns were issued by the Government. 167,000 people are receiving one for the first time, and many of these will be foreigners.

Income tax is taxing enough in your home country, but ensuring you're getting everything right in a foreign country in a foreign language can be a daunting prospect. Even if your level of Norwegian is advanced, it can still be extremely difficult to grasp the tax concepts in Norway.

It's important to realise the tax return you have been sent is provisional, based on the information the Norwegian Government knows about you, such as the salary and tax paid reported by your employer, plus any property or businesses you own.

This is usually fairly accurate, but if you've not lived in Norway for very long or have had recent changes in circumstances, it's worthwhile to go through the tax return carefully to check everything is in order.

Why? Because of those who have overpaid their tax, the average rebate is over NOK 11,000 ($1,300). That's got to be worth an hour or so of your time, no?

Top tax return tips for expats

Here's our top tips for foreigners filling out the Norwegian tax return. This is not intended to be a comprehensive guide, and it's important to note that all deductions depend on your personal circumstances, so this should only be taken as general guidance. Do your own research to be sure of your entitlements!

1. Double check the assumptions and pre-filled values

Double check your income and the amount of tax you paid according to your payslips with the values on your tax return. Other things to check include your marital status and that any property you own is recorded correctly. For example, mortgage debt should be split between co-owners but is usually reported by the bank against just one person. This needs to be manually adjusted on your tax returns.

2. Declare all income

This should go without saying, but if you earn money in addition to your main job or have any sources of income outside of Norway, you must declare these on your tax return. As a tax resident of Norway, you pay tax based on your worldwide income, not just Norway-sourced income. The country has tax treaties in place with most other countries to ensure you are not taxed twice on the same income, so it's important to record all income even if you have already paid tax on it somewhere else.

3. The standard deduction for foreign workers

As a foreign employee you may be entitled to claim an additional standard deduction on your income, in addition to the personal allowances that apply to all employees. You are entitled to claim the standard deduction for the first two years you live in Norway. The deduction is 10% of your gross income from employment, up to a maximum NOK 40,000. However, by taking this deduction you also remove the opportunity to claim other deductions, such as interest debt and commuter expenses.

This deduction is also available on a longer-term basis for temporary workers. If you stay in Norway for up to 183 days during a 12-month period or up to 270 days during a 36-month period, you can also claim the standard deduction.

This deduction is never included on the tax return by default, so you must always claim it if you feel it applies to you.

4. Child care

If you care for a child under the age of 12 (or older children with special care needs), you can claim a deduction of up to NOK 25,000 for one child and a further NOK 15,000 for each additional child. The amounts should be automatically entered by reports from the day care provider, but it's worth double checking this.

5. Special allowance for single providers

Everyone who receives extended child benefit from NAV is entitled to claim a special allowance of NOK 4,067 per month. If you receive half extended child benefit because the child lives with both parents, half this amount applies. This deduction ceases to be valid if you marry or enter into a co-habiting partnership with someone.

6. Commuter expenses

If you travel more than 23.2km to your permanent workplace you can claim a fixed deduction, regardless of your actual mode of transport. The rate is NOK 1.5 per kilometre for up to 50,000 kilometres per year, and NOK 0.70 per kilometre for any further distance up to 75,000 kilometres per year. The first NOK 16,000 of this is non-deductible, hence the need to travel 23.2km (46.4km return) before this deduction will apply to you.

In addition to this, if you travel by car and incur road tolls and ferry fees that exceed NOK 3,300/yr, you can deduct these expenses, but only if the return journey time by car is two hours shorter than when using scheduled public transport.

7. Maintenance payments to a former partner

Regular maintenance payments which you are obligated to pay according to law or a formal agreement can be deducted, even if the recipient lives abroad. There is no limit to the deductions, which must be made through a bank if the total is more than NOK 10,000. It's important to note that these payments are considered taxable income for the recipient.

8. Deduction for PhD candidates

If you are working towards a PhD, you are entitled to a deduction in connection with printing, travel and your PhD dinner. For an official PhD dinner following your disputation, you can deduct up to NOK 23,940, subject to a maximum of NOK 1,197 per head unless you are able to document higher expenses.

9. Get your tax return in English

You can ask for next year's return to be sent to you in English using section 1.5.7.

Questions?

As a reminder, this is not intended to be a comprehensive guide, and it's important to note that all deductions depend on your personal circumstances, so this should only be taken as a starting point for your own research to be sure of your entitlements!

Please note I am not a financial advisor and cannot answer questions related to your specific circumstances.

For any questions, your first port of call should be the Tax Office, Skatteetaten, who can be contacted on 800 80 000. If you're calling from outside Norway, use +47 22 07 70 00. Note that lines are only open from 9am-3pm Monday to Friday, and be prepared for a wait.