Newsletter Budget Bill for 2025

On the 7ht of October 2024 the Norwegian Government presented the 2025 Budget Bill to the Parliament. The Government did not propose any major changes in the tax and VAT rules.

The Government did not propose any essential changes in the general income tax rule. The general tax rate on ordinary income will continue to be 22 %. Some of the standard deductions are proposed to be increased and social security tax for employees are proposed to be slightly reduced.

The temporary 5 % additional tax on employer’s social security tax on salary exceeding NOK 850 000 is proposed to be abolished.

The Government proposes a minor change in the tax incentive scheme for options in start up companies.

The most important proposal is related to the Norwegian exit tax rules. The Government propose to make the exit tax payable within 12 years after the taxpayer has ceased to be tax resident in Norway according to Norwegian domestic tax rules or applicable tax treaty. The Government propose to increase the limit for the exit tax. Today potential gain exceeding NOK 500 000 at the time the taxpayer ceased to be resident in Norway will trigger exit tax. The Government propose that the exit tax will apply if the potential gain on shares etc estimated at the time the taxpayer ceased to be tax resident in Norway, exceeds MNOK 3.

If dividends are distributed on shares subject to postponed exit tax, the amount postponed shall be reduced with 70% of the distributed dividend. This means that 70 % of the distributed dividend must be paid immediately as repayment of the postponed exit tax.