Norway’s government has released an overview outlining key tax changes which took effect on 1 January 2025.
Some of the main changes include:
Natural resource tax for hydropower
The natural resource tax for hydropower plants has been increased from 1.3 øre/kWh to 1.34 øre/kWh, of which 1.13 øre/kWh goes to the municipalities and 0.21 øre/kWh to the county municipalities.
Value added tax (VAT)
A Resolution on VAT for 2025 has been published in the Official Gazette, setting VAT rates for 2025.
The rates remain largely unchanged, including a standard rate of 25% and reduced rates of 15%, 12%, and 11.11%.
- Value added tax is calculated at 25% of taxable turnover, withdrawals, and imports at a reduced rate.
- The Value added tax is calculated at 15% of sales for withdrawals and imports of food products.
- Value added tax is calculated at 12% of turnover and withdrawals of services that apply to passenger transport, transport of vehicles on vessels, rental of rooms in hotel operations, the right to attend cinema performances, broadcasting services, admission to exhibitions in museums, admission to amusement parks, etc.
- Value added tax is calculated at 11.11% of sales, etc., of wild marine resources.
Personal income tax allowance increases
The personal income tax allowance increases from NOK 88,250 in 2024 to NOK 108,550;
The adjusted third, fourth, and fifth bracket tax rates and thresholds are as follows:
- 13.7% on income over NOK 697,150;
- 16.7% on income over NOK 942,400;
- 17.7% on income over NOK 1,410,750.
The personal tax rates for brackets 1 and 2 remain unchanged.
Employer’s national insurance contribution
The extra employer’s national insurance contribution on salaries of over NOK 850,000 has been removed. The national insurance contributions lower limit has been raised from NOK 69,650 to NOK 99,650.
Earlier, Norway’s government presented the 2025 Budget Bill on 7 October 2024, focusing on improving financial well-being and reducing social and geographical inequalities for Norwegians.
