The Norwegian National Budget for 2026

A proposal has been put forward that is negative for the real estate industry, as the Government proposes to abolish the so-called cooperative housing tax model (Nw: borettslagsmodellen). The model enabled shielding taxation of gains on properties and projects within the housing sector. This is proposed done by no longer allowing tax-free mergers between limited liability companies and cooperatives housing. It is proposed that this change will take effect from 15 October 2025, where the decisive factor will be whether the decision on the merger has been sent to the Register of Business Enterprises before this date. However, the rules may come into force somewhat later for housing development projects. More detailed information be found in our newsletter on the abolishment of the cooperative housing tax model.

Possible changes to the rules for tax related paid-in capital on shares have been announced, with effect from 1 January 2027. Simultaneously with the presentation of the proposed national budget for 2026, the Ministry has sent two alternative proposals for consultation, both of which involve limiting the tax exemption for repayment of tax related paid-in capital on shares to the shareholder's own cost price on the shares. This is unlike the current scheme, where the tax position follows the share regardless of what new shareholder has paid for the shares. More detailed information about the proposal can be found in our newsletter on tax related paid-in capital.

A change in the calculation of debt and interest deductions for financial institutions was resolved. The background to the change is the Supreme Court's conclusion in the DNB ruling (HR-2024-2073-A), as discussed in our newsletter of 9 January 2025. The result of the ruling was that DNB received an almost full deduction for debt interest in Norway, even though a significant portion of this was related to its operations in the United States and was deductible there. The bank thus received a deduction for the same interest costs in two jurisdictions, which violates the symmetry principle of matching income and expenses.

As a result of the weaknesses in the tax rules revealed in the Supreme Court ruling, the Ministry proposed a new method for limiting debt and interest deductions for financial institutions. The current gross asset method, which allocates deductions based on the ratio between assets abroad and the taxpayer's total assets, is proposed to be replaced by a direct allocation method. Under the new method, debt and interest will be allocated according to where they are actually incurred, not according to how gross assets are distributed. This means that debt interest related to foreign operations will no longer be deductible in Norway when the income from foreign operations is not taxed here under a tax treaty (the exemption method).

A number of changes were proposed and resolved for the taxation of securities funds, with effect from the income year of 2026. The changes can mainly be summarized as follows:

• Interest income in securities funds is exempt from taxation in the fund. This paves the way for accumulating interest funds in Norway. 
   
• Equity income in securities funds is exempt from ordinary taxation, but 1% of dividend income is still considered taxable income for the fund. In this income base, a deduction is granted for the fund's management costs.
   
• Income from financial instruments is exempt from taxation in the fund. 
   
• The rules on taxation of securities funds shall apply to UCITS funds, Norwegian national funds and funds established in other EEA countries that correspond to Norwegian national funds. The rules shall therefore not apply to special funds, and a transitional provision is proposed to ensure that established tax positions are safeguarded for those who fall outside the rules. 
   

In 2025 and earlier, companies that invest in fund accounts (unit-linked insurance policies) can obtain tax exemptions under the exemption method for shares outside the exemption method and for assets other than shares. A fund account is a combined investment and insurance product, and where the insurance element is small, so that the investment in the fund account is taxed in the same way as an investment in a securities fund. In line with the consultation bodies, the Ministry proposed to change the standard calculation of the ratio between shares and interest-bearing securities and to adjust the regulations so that the exemption method will be applied as normal when the investment is made through a fund account. The proposed amendments were resolved by the Norwegian Parliament and enters into effect from the income year of 2026.

It was further resolved amendments to the Supplementary Tax Act. The Act implements a model regulatory framework for global minimum taxation in Norwegian law and is intended to ensure that large groups are taxed at a minimum rate of 15% regardless of where they operate, in line with OECD's GloBE rules. The amendments primarily relate to updating the Norwegian regulations in accordance with the two administrative guidelines of the Inclusive Framework published in 2024 and 2025. In addition, certain amendments are considered to be of a corrective nature. In summary, the amendments relate to: 

• Clarification of how the reversal of deferred tax liabilities should be practised, including the introduction of two standard methods (SIFU and FIFU) and the option of a five-year election in the case of unclaimed provisions. 
   
• Guidance on the treatment of deferred tax in the event of discrepancies between adjusted values and accounting values. 
   
• Guidance on the allocation of cross-border tax from group entities subject to tax systems with credit coordination. 
   
• Clarifications for the allocation of income and tax in group structures with entities that have participant assessment.
   
• The obligation to pay national supplementary tax is imposed on another group entity located in Norway if it falls on a securitisation entity.
   

The amendments are to enter into force from the income year of 2024 for financial years beginning after 31 December 2023. However, certain provisions of the Supplementary Tax Act are proposed to enter into force first from the income year of 2025 for financial years beginning after 31 December 2024.

The Parliament resolved to amend the VAT rules for cross-border trade in services. This will contribute to equal treatment of international and national enterprises. In 2025, international enterprises were not charged VAT on significant service purchases used in Norway.

International companies often organise the purchase of services so that the services are purchased from one place of establishment (e.g. head office in Sweden) while the services are used in whole or in part by another place of establishment (e.g. branch in Norway). According to the destination principle, VAT should be calculated on the proportion of purchased services used in Norway, but Section 3-30, second paragraph, of the VAT Act has been interpreted and practised in such a way that companies in many cases avoid VAT calculation in Norway, which leads to unintended non-taxation. The Ministry believes that the current situation violates VAT law considerations and creates unequal VAT burdens between international companies and wholly national companies. The purpose of the amendment is to treat services purchased abroad for use in Norway equally with services purchased in Norway.

The Ministry points out that the current situation is detrimental to competition in the financial markets. The proposed amendment is therefore aimed at financial enterprises, and in order to limit the scope of the new tax liability under Section 3-30, second paragraph, the rules do not apply to enterprises that are fully entitled to deduct VAT.

For international financial institutions, the proposal will necessitate changes and developments in internal procedures and systems. Furthermore, the proposal will require changes to the Norwegian Tax Administration's systems. These circumstances argue in favour of postponing the entry into force of the rules compared to the consultation proposal, which proposed that the amendment enter into force on 1 January 2026. The Ministry therefore proposes that the proposal enter into force on 1 July 2026.

More detailed information can be found in our newsletter on new VAT rules for cross-border services affecting the financial sector.

For the aquaculture industry, the most important aspect is that the Government proposed to introduce a new tax on lost fish, with the aim of reducing mortality in aquaculture to the target of 5% set out in the Aquaculture Report. The levy is also proposed to include escaped fish. A study will be conducted to assess the tax base, tax level and mechanisms for reporting/control. Proposed regulations will be sent out for consultation, with a view to introduction from 1 January 2027.

The Government also proposes that the Ministry of Trade, Industry and Fisheries be authorised to require payment when granting licences for the farming of salmon and trout, either at a fixed amount or by auction.

The ground rent tax rate for aquaculture will remain unchanged. On 15 October 2025, the Government will send out a consultation proposal on limiting the deduction for tax on farmed fish in the ground rent tax, whereby the right to deduction applies to the same licences that are included in the ground rent tax. The proposal means that tax on farmed fish originating from permits other than ordinary food fish permits can be deducted from ordinary income. The change is proposed to take effect from the 2027 income year.

• Change in income tax: A slight reduction in income tax for most wage earners, with annual relief of between NOK 200 for low-income groups and up to NOK 1,400 for those with an income of approximately NOK 1 million.

• Change in wealth tax: An increase of the basic deduction in wealth tax from NOK 1.76 million to NOK 1.9 million.

• Trial scheme with tax relief for young people: As previously proposed and discussed in our newsletter of 4 July 2025, a trial scheme with tax relief for young people is to be implemented from the income year of 2026. The trial scheme involves 100,000 randomly selected young people between the ages of 20 and 35 receiving an employment tax credit of NOK 125,000, provided that they are in work. The aim is to see whether tax relief will get more people into work.

• Phasing out of electric car subsidies: Reduction of the limit for VAT exemption for electric cars from NOK 500,000 to NOK 300,000. It was in the proposal announced that the exemption would be removed completely from 2027, but after agreement with other parties this was extended until 2028, where there will be a step-down to NOK 150,000 in 2027.

  At the same time, it was resolved to increase the one-off tax on fossil fuel-powered passenger cars. Overall, this means that the incentives to buy zero-emission cars will be maintained even though the subsidies are reduced.
  

• Change in the right to write off output VAT on claims against related parties: The right to write off output VAT is reserved for what must be considered a loss on accounts receivable and does not include circumstances that must be considered a loan or capital contribution. Particularly between related parties, there is a risk that what is in reality a loan or capital contribution is given in the form of credit on VAT-liable deliveries. In order to limit the need to assess the actual legal relationship between related parties, the Ministry proposes that the right to write off VAT should lapse after 24 months if the VAT relates to a claim on a related company. The Ministry proposes that the changes come into force with effect from 1 January 2026.
  

• Exit tax: No changes to the exit tax rules are proposed nor implemented.