Norway 2017 Tax Rates to Include Financial Services Payroll Tax

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By Jared Mondschein

Financial-sector employers are to be subject to a new 5 percent payroll tax on employee wages starting Jan. 1, 2017, the Norwegian Ministry of Finance said Dec. 22. Additionally, financial-sector employees are to be exempt from a new general individual income tax rate, the ministry said in a news release detailing major upcoming changes.

The new Financial Activity Tax is to apply to companies that have at least 30 percent of their activities in the financial sector, as defined by the government research group Statistics Norway. Individual salaries of financial-sector workers are to maintain the basic income tax level from 2016 of 25 percent, the ministry said.

Income, Social Tax Changes

The general individual income tax rate, which consists of state, county and municipal taxes and is imposed at a flat rate on all income, is to decrease for nonfinancial-sector workers to 24 percent from 25 percent starting Jan. 1.

The tax rates and threshold for the surtax, or top tax, which is imposed on amounts greater than the basic threshold also are to change:

•The first personal income tax bracket is to increase to 164,100 krone ($18,861) from 159,800 krone ($18,367), and the tax rate is to increase to 0.93 percent from 0.44 percent.

•The second income tax bracket is to increase to 230,950 krone ($26,545) from 224,900 krone ($25,853), and the tax rate is to increase to 2.41 percent from 1.7 percent

•The the third income tax bracket is to increase to 580,650 krone ($66,739) from 565,400 krone ($64,995), and the tax rate is to increase to 11.52 percent from 10.7 percent

•The fourth bracket is to increase to 934,050 krone ($107,373) from 909,500 krone ($104,551), and the tax rate is to increase to 14.52 percent from 13.7 percent

The contribution rates for social security wages are to remain unchanged, but the threshold is to increase to 54,650 krone ($6,282) from 49,650 krone ($5,706).

The tax exemption amount for employee purchases of employer shares is to increase to 3,000 krone ($344) from 1,500 krone ($172).

To contact the reporter on this story: Jared Mondschein at jmondschein@bna.com

To contact the editor on this story: Michael Trimarchi at mtrimarchi@bna.com

For More Information

The 2017 tax changes are available in Norwegian at https://www.regjeringen.no/no/aktuelt/regelendringer-fra-1.-januar-2017/id2524874/.

More information on payroll issues in Norway is available in the Norway country primer.

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