The 2026 Budget Bill prioritises welfare, health, defence, reducing electric car subsidies, cutting income and electricity taxes to boost purchasing power, and closing tax loopholes.
Norway’s government has presented its proposal for the state budget and national budget for 2026 on 15 October 2025.
Key priorities include enhancing welfare services, healthcare, and municipal finances; increasing defence spending and aid to Ukraine; and advancing climate goals by raising CO2 taxes and reducing subsidies for electric vehicles. The Bill also aims to strengthen household purchasing power through lower income and electricity taxes, while closing tax loopholes and phasing out expensive EV incentives.
The budget bill also included measures for fiscal strategy, adhering to the fiscal rule for the management of oil revenue, and addresses challenges such as rising public expenditures driven by demographics, increasing income and wealth inequality, and efforts to boost labour participation and productivity across various sectors.
Corporate tax changes
In line with the government’s promise to maintain overall tax and excise levels for Norwegian individuals and businesses, the tax proposal for 2026 includes broad reductions in income tax. The overall plan adheres to the principle that combined taxes and excise duties on Norwegian private individuals and businesses will remain at current levels over the next parliamentary period, and specifically that the corporate tax rate will not be increased.
Instead, efforts are made to improve the tax system’s efficiency and integrity by closing loopholes. For instance, the ability for financial institutions operating abroad to achieve double interest deductions will be eliminated.
A tax loophole in the property sector, which allows gains taxation to be avoided through targeted tax planning, will be closed, effective from the budget presentation date.
Electricity excise tax
The electricity excise tax will be reduced to 4.18 øre per kWh throughout the year to help households and businesses manage energy costs.
Climate/CO2 taxes
The government proposes to increase the climate-related excise tax by 14%. This increase is part of a plan, initially announced in the 2022 budget proposal, to raise greenhouse gas emission taxes under the effort-sharing regulation to approximately 2,000 NOK (2020 prices), equivalent to 2,400 NOK in 2025 prices, by 2030.
Value Added Tax (VAT) changes
The proposal includes measures to close VAT loopholes in international trade in services. Loopholes in the VAT regulations for international trade in services will be closed.
VAT exemption for electric vehicles
The budget bill proposes reducing the VAT exemption threshold for electric cars from NOK 500,000 to NOK 300,000. It is further announced that the VAT benefits for the purchase of new electric vehicles will be removed entirely starting in 2027.
