Revised national budget 2024

The Government maintains the tax rate for corporate income tax and wealth tax. The Government also states that there are no plans for the introduction of a new inheritance tax this parliamentary term.

Furthermore, the Government does not intend to follow up on any major changes presented in the Tax Committee's report for a comprehensive tax reform presented in December 2022, as you can read about in our earlier newsletter. The Government will, however, consider the proposed restrictive measures to the participation exemption method, hereunder to increase the taxation on dividend income from 3% (effective tax rate of 0.66%) to 5% (effective tax rate of 1.1%) and a tax rate of 5% for capital gains.

For the special rules regarding taxation of private consumption, it is stated that adjustments to the consultation proposal is still ongoing.

From 1 January 2023, employers have been required to calculate and pay an additional 5% in employer's national insurance contribution for taxable wages exceeding NOK 750,000. The Government initiated a partial phase-out of the increased contribution in the National Budget for 2024 when the threshold was raised from NOK 750,000 to NOK 850,000. In the Revised National Budget for 2024, the Government has now announced that the additional employer's national insurance contribution will be removed completely from 1 January 2025.

The Government has proposed that resource rent tax on onshore wind power plants owned by companies with participation determination (e.g., responsible companies, limited partnerships, etc.) shall be calculated according to a gross method. This method will apply when the participants sell the main part of the power production on an independent basis and implies that the individual participant's actual sales revenue shall be used as the basis for income tax purposes. Such calculation method is similar to that used of hydropower plants, and the Government proposes that the change shall come into effect immediately.

Under current rules, mergers involving emigration of a Norwegian securities fund may trigger tax on gains from shares owned in companies domiciled outside the EEA. Shares owned in companies domiciled within the EEA is exempt from tax. In order to create better coherency in the regulations, the Government proposes to amend Section 9-14 of the Tax Act to include tax exemption for shares owned in companies outside the EEA as well. Such amendment will also be consistent with Section 10-20 of the Tax Act which facilitates tax exemption for actual realization of shares in companies domiciled outside the EEA. The purpose of the proposal is to ensure consistency in the legislation regarding tax exemption for gains upon divestment and the relocation of security funds, so that going forward security funds shall be exempt from exit taxation on shares in companies both within and outside the EEA. The Government proposes that the change will come into effect immediately.