Worldwide Tax Summaries--NORWAY(1999-2000)(part2)

Worldwide Tax Summaries--NORWAY(1999-2000)(part2)

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SIGNIFICANT DEVELOPMENTS
Effective from fiscal year 1998, Norway has introduced a new tax return (PSA), which is to be fully in use by the end of April.

TERRITORIALITY AND RESIDENCE
Norway taxes its residents on their worldwide income and capital. Nonresidents working in Norway are taxed on their compensation attributable to Norwegian sources. Resident status is obtained when an alien intends to reside in Norway other than temporarily. A stay of more than six months is always considered to be residence.

GROSS INCOME
Employee gross income/Nonresident aliens are taxed on salary earned for work performed in Norway, irrespective of where payment is made or whether it is remitted.  Compensation relating to work performed outside Norway is not taxed. All benefits paid by the employer (e.g., living allowances, housing allowances, tax reimbursements, paid vacation, travel costs for nonbusiness visits to the employee's country of origin) are subject to tax.

Capital gains and investment income/Capital gains on portfolio investments are taxed at a flat rate of 28%. A nonresident alien is taxed on Norwegian-source capital gains received during a stay in Norway, irrespective of the period of the stay. Norwegian real estate capital gains are always taxable, regardless of residence.

Dividends received by domestic shareholders from domestic companies are subject to income tax at the rate of 28%. Such shareholders are, however, given a credit for tax paid by the distributing company, with the effect that they pay zero tax.

Foreign-source dividends received by a domestic shareholder are taxed as ordinary income unless otherwise decreed in the relevant tax treaty. Foreign withholding tax is credited against Norwegian tax.

A withholding tax of 25% is levied on dividends paid by a Norwegian company to nonresident aliens. The withholding tax can be reduced by the relevant tax treaty.

DEDUCTIONS
Business deductions/If not reimbursed, an alien (resident or nonresident) can deduct all business-connected expenses. These expenses comprise such items as moving expenses, traveling expenses and automobile expenses. Entertainment expenses will not be allowed as a deduction. In practice, this will apply only to individuals who are not employed, e.g., consultants.

Nonbusiness expenses/An alien (resident or nonresident) can deduct mortgage and other interest expenses (mortgages relating to Norwegian property only), expenses incurred in producing income, private pension premiums (maximum NOK40,000), alimony, and commuting expenses in excess of NOK7,000. In addition, an allowance  (minimum, NOK3,900); maximum, NOK34,900) can be claimed as a deduction. An alien who intends to be in Norway for less than four years can elect to take a standard deduction instead of itemized deductions. The standard deduction is calculated as 15% of gross taxable income (earned income only). If the standard deduction is elected, only the minimum allowance with a maximum NOK34,900 and contributions to company pension schemes may be deducted.

Personal allowances/No personal allowances can be claimed when calculating net income subject to tax. In the final tax computation, a credit of NOK1,820 for each child under 16 years old and NOK2,540 for each supported child from 16 to 18 years old is allowed.

TAX CREDITS
Resident aliens can take income taxes paid to a foreign country as a credit against their tax liability (subject to limitations). In practice, this applies only to income earned in non-tax-treaty countries and to dividends. A nonresident alien would not be entitled to a foreign tax credit.

Personal allowances (see above) take the form of credits.

OTHER TAXES
Social security taxes/The taxpayer contributes to the social security system through a social security tax, which is calculated on gross salary income (including benefits-in-kind) at a rate of 7.8%. The employer pays an additional 14.1% of the employee's gross income as a contribution to the soCIAl security scheme. A solidarity tax of 12.5% on gross income is payable on income (salary-related) in excess of 16G (one G is at present NOK45,370).

Local taxes on income/See "Tax rates" below.

TAX ADMINISTRATION
Returns/Joint filing with income splitting is not permitted. If both spouses have earned income, each files a separate return and is taxed in classⅠ as a single taxpayer.Otherwise, they file one return and are taxed in class Ⅱ as a married couple. Tax returns must be filed on a calendar-year basis. Effective from the fiscal year 1998, Norway has introduced a new tax return (PSA), which is to be completed by the edn of April. In the PSA, all available details have been imposed by the tax authorities, and the taxpayer must check the return carefully and delete or add items in accord with the facts.

Payment of tax/There is income tax withholding from salaries. Generally, if taxpayers have sizable income not subject to withholding they will be required to make quarterly payments of estimated taxes.

TAX RATES
Local taxes on income/All municipalities are separate taxing authorities and impose a local tax at an aggregate rate of 28% on taxable income in excess of NOK52,600 (married man, wife not working).

Top tax/An additional tax (state tax) on salary income, including benefits-in-kind, is assessed. For Class Ⅱ taxpayers, top tax is 13.5% of earned income in excess of NOK318,600.

INDIVIDUAL TAX CALCULATION
Assumptions
Resident alien husband and wife, two children; one spouse earns all of the income,

Tax computation
Gross income:
    Salary…………………………………………       NOK   600,000
    Interest………………………………………               60,000
    Dividends from abroad………………………             10,000
    Gain on sale of shares……………………              30,000
    Total gross income…………………………             700,000
Less (choosing the 15% standard deduction):
    Minimum allowance…………………………  34,900
    15% standard deduction on 600,000……  90,000
    Contribution to pension scheme
    (paid by employer) ……………………    18,900       143,800
Taxable income………………………………          NOK   556,200
Income tax:
    Local tax (municipal tax) ……………………  NOK     141,008
    SoCIAl security…………………………………            46,800
    Top tax-13.5% of (600,000-318,600) ………            37,989
                                                        225,777
Less:
    Personal allowance-Two children…………    3,640
    Withholding tax on foreign dividend(25%)… 2,500     (6,140)
Income tax for married couple……………………     NOK    219,637

Note:
Exchange rate of the krone at December 31,1998:US$1=NOK7.600        

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北京中立诚会计师事务所简介下载
地 址:北京朝阳区北苑路13号领地OFFICE大厦B座7层701室
电 话:(010)- 52086638 51095615
传 真:(010)- 52086636
邮 编:100107
E-mail:supercpa@163.com