The revised national budget 2023

On 11 May 2023, the Norwegian government presented the revised national budget for 2023 with very few proposals for changes related to direct and indirect taxes. The Norwegian government has surprisingly postponed the implementation of resource rent tax on wind power. Otherwise, there were minor changes that have limited significance for Norwegian businesses.

Before the presentation of the revised national budget, there was speculation about potential proposals for a payable exit tax. In the Norwegian government's budget settlement in 2022, an amendment of the exit tax was proposed, whereby the "five-year rule" (whereby calculated exit tax would be permanently non-payable should the taxpayer still own the relevant shares five years after exiting Norway) was abolished, as described in our newsletter here. However, no proposals were presented for further changes on the exit tax in the revised national budget.

Nor has the Norwegian government proposed any major changes in line with the Tax Committee's report of 19 December 2022. In the revised national budget, the Norwegian government writes that the Ministry of Finance has received 267 consultation responses with substantive comments. It also appears that the Ministry of Finance is aiming to give a motion of the Tax Committee's report to the Norwegian Parliament in connection with the revised national budget in spring 2024.

Deferred implementation of resource rent tax on wind power

The Norwegian government has decided to postpone the implementation of the proposed resource rent tax on wind power from 1 January 2023 to 1 January 2024. The deferred implementation is explained due to time considerations and the input from the 140 consultation responses the Norwegian government has received. The resource rent tax is planned to be presented to the Norwegian Parliament in the autumn 2023, with effect from and including the income year of 2024.

The deferred implementation of the resource rent tax does not affect the adopted increase in production tax for land-based wind power from NOK 0.01 to 0.02/kWh for 2023.

In comparison, the Norwegian government has received around 420 consultation responses on the proposed resource rent tax on aquaculture, but this is still planned to be implemented with effect from 1 January 2023. This is despite the fact that the structure of the tax is still largely unclear. You can read our newsletter about the final framing of the resource rent tax on aquaculture here.

Reduced production tax for the aquaculture industry

In the national budget for 2023, the product tax for the aquaculture industry was set at 2% for 2023. The Norwegian government proposes that the product tax shall be reduced to 1.9% from 1 July 2023, based on revised forecasts for next year's first-hand value of the fishery and estimated expenses.

Priority for direct and indirect tax claims

In the regulation on temporary exemption from the priority rules during reconstruction under the temporary act on reconstruction of businesses, it is determined that the rules on preferential rights for tax, VAT and social security tax in Section 9-4 of the Recovery Act shall not apply to reconstructions under the Reconstruction Act. The regulation was supposed to be repealed on 1 July 2023, but the Norwegian government proposes to continue this regulation until 1 July 2025.

Exemption from electrical power tax when sharing local energy production

In the national budget for 2022, an exemption from the electrical power tax for self-production of electricity from renewable energy sources was adopted. The new rules were subject to a public consultation in 2022, and the Norwegian government has decided after the public consultation that there will be a limit for facilities with an installed output of up to 1,000 kW per property.

The Norwegian government aims to implement the exemption from electrical power tax for self-produced renewable power from 1 October 2023.

Tax benefit for commuters

The Norwegian government proposes to increase the rates for deductions and tax-free coverage for food (bord) for commuters living in barracks and for long-haul drivers. In 2023, the rate for commuters staying in barracks, boarding houses and dormitories without cooking facilities is NOK 177 per day. The Norwegian government has proposed to increase this rate to NOK 250. Long-haul drivers have a rate of NOK 300 per day if they are absent from home for 24 hours. This rate is proposed to be increased to NOK 350.

Tax benefits for pensioners

The Norwegian government proposes to reduce the income tax on pensions for pensioners with low pensions. This is done by increasing the threshold for step 1 from NOK 219,950 to NOK 246,800, as well as increasing the threshold for step 2 from NOK 331,750 to NOK 373,650. Preliminary calculations show that the proposed changes could mean that pensioners with a low pension receive reduction of taxation of up to NOK 4,500.