Norwegian finance minister, Sigbjørn Johnsen, has presented a new state budget in the Norwegian Parliament.
The Norwegian government will adopt new tax rules for the new pension system to be introduced in 2011, which it says will make it more worthwhile to work alongside receiving a pension. In particular, the government said the current tax limitation rule would be replaced by a special tax free allowance for the early retired and older pensioners. The new tax allowance would ensure that those on the lowest earnings did not have to pay income tax. This would be concurrent with increased social security contributions on pension income and scrapping the age-related special allowance.
The government also proposes to extend tax allowances on its gift deduction scheme to support voluntary organizations in the European Economic Area. The ministry of finance may issue regulations about which areas of cultural heritage qualify under the gift tax scheme.
Municipalities will have the option to tax any commercial property not explicitly excluded in the property tax law under the budget proposals. The current rules prevent municipalities levying tax on certain properties in specific areas, for example urban area shopping centers, office buildings and hotels. Commercial property specifically exempted from property taxes, such as agricultural property, will continue to be exempt.
In addition, with effect from July 2011, 25% value-added tax is to be imposed on suppliers outside Norway when private individuals resident in Norway purchase online services from abroad. This applies especially to downloading of movies and e-books on demand.
Basic tax on mineral oil is to be increased by 8.1 cents per liter, equivalent to an increase of 1 cent per kWh.
Tax on snuff and chewing tobacco will be increased by 10% in real terms, and tax on other tobacco products increased by 5% in real terms. Taxes on alcohol have been increased by 5% in real terms.
.Tags: tax | law | individuals | budget | tax rates | value added tax (VAT) | individual income tax | social security | gift tax | Norway | property tax | oil and gas | excise duty | regulation | VAT
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