Tax for private limited liability companies
A private limited liability company is a separate legal entity and a separate taxpayer. This means that the company itself is responsible for reporting and paying tax. As an owner (shareholder), you will only be taxed on what you pay out in salary and dividends from the company.
The profits of a limited liability company are subject to a 22 percent tax rate. However, the tax, which is known as 'advance tax', does not have to be paid until the year after that in which the profit was earned.
The first advance is payable in two instalments in February and April. Final settlement takes place in October and is based on the submitted tax return.
In order for new companies to have their tax calculated, form 'RF-1097 Søknad om endring av eller krav om forskuddsskatt - upersonlig skattyter' (Application for new or changed advance tax - non-personal taxpayer - in Norwegian only) must be completed and submitted via Altinn. If you wish to alter your advance tax, e.g. because of changes in your income, the same form must be used. In the case of companies that have submitted a tax return in previous years, the advance tax will be calculated on the basis of the most recent assessment.
Limited companies registered in 2023 will have their first tax payment in 2024, and should not submit RF-1097 in 2023.
Tax must be paid in two equal instalments during the first six months after the income year. The deadlines for these instalments are 15 February and 15 April.
If the amount of tax that has been paid is expected to be too low relative to your income, with the resultant possibility that the company might incur underpaid tax, you can pay an additional advance by 31 May.
Summaries of how much tax is to be paid are distributed by the Norwegian Tax Administration via Altinn in January. Make sure that your company's contact details are up-to-date in Altinn, so that you can receive an e-mail notification when this summary becomes available.
You will be sent a payment form with an account number and a KID number. Payment must be made to the Norwegian Tax Administration. If you wish to pay an additional advance, you must generate a KID number on the Norwegian Tax Administration's website. You will also find the account number you need to use there. When the tax return is processed, any underpaid tax will be calculated. If any underpaid tax is outstanding, you will be sent a payment slip.
The company's tax return must be submitted to the Norwegian Tax Administration by 31 May.
The obligation to submit a tax return also applies to private limited companies with no turnover during the income year (the tax return period), and companies which were founded towards the end of the income year - but not registered in the register of Business Enterprises until the following year must send the tax return via the accounting or annual settlement program.
From the income year 2023 (which is reported in 2024), limited liability companies must send the tax return via the accounting or annual settlement program.
Companies which own shares in another company
Companies owning shares in another company are generally exempt from taxation on gains and dividends on these shares. Losses are correspondingly not deductible. This is referred to as the exemption method and these rules generally apply to companies domiciled in a normal tax country within the EEA. Section 2-38 of the Tax Act stipulates more detailed provisions concerning which companies and organisations, and which incomes and losses that are covered by the exemption method.
However, there is a standard rule according to which three percent of the income, which is exempt from tax liability under the exemption method, must still be considered taxable income.
The standard rule only covers share dividends which are covered by the exemption method and distributions from businesses assessed as a partnership. Gains made on the realisation of shares are therefore not covered by the three-percent rule. Gains and dividends in group arrangements within the EEA (tax group) are also not covered, which means that no tax should be calculated on such gains.