Changes in taxes in 2018

There are many changes in the Norwegian budget concerning taxation system. Changes will affect people working away from their place of residence – Poles living in Norway.

Limiting the rights to tax allowance for accommodation and board

One of the most important changes to be introduced in 2018 concern tax deduction for accommodation and lodging. The solution suggests that a person employed by the same employer and living in the same administrative district for over two years will no longer be considered a pendler with rights to reimbursement of accommodation and lodging expenses. There is a caveat, however, which states that if someone is to change their place of employment and move to a different administrative district, the two-year period of the tax deduction is renewed. What is more, even after two years the employer can still provide their employees who commute to their place of work, both transportation and board according to the current rates.

It is worth noting that the costs of the commute are not included in the new regulations. You still can get reimbursed for the costs of your commute, if you travel to a different administrative district, fylke, or land.

The aforementioned 2-year period will come into effect in 2018. It means that people who are pendlers retain their right to be reimbursed for their travel and food expenses for the next 2 years and will lose them in 2020.

Lower reimbursement for food

In 2018 the government wants to limit reimbursement for food expenses. The right to this tax allowance will be granted to persons living in locations without access to kitchen facilities (hostels, barracks, boarding houses). People who live in rented apartments or houses and with access to a kitchen will lose the right to such allowance. What is more, according to the legislators, the tax allowance is too high and should be lowered by 100 NOK.

Second tax tier is no more

The government plans to wind down the second tax tier. The reason for this decision is a desire to activate women, especially the women from immigrant families in the job market. It is motivated by the fact that women and pensioners use this tax allowance the most.

Taxation of renting a flat

The officials also want to regulate and limit short-term flat rent, which is on the rise due to the popularity of online services. They want to abolish tax limits – you will have to pay tax if you rent a room or rooms for a short-term (shorter than 30 days), provided that your income exceeds 10 000 in a year.

What about my tax return for 2017?

Persons who want to do their tax return for 2017 for 2018 will not have to follow new tax regulations. If you are a pendler you would still be able to make a tax allowance for your commute and board according to old rates: 315 NOK for an overnight accommodation in a hotel or a boarding house or rooms without access to kitchen and 205 NOK for an overnight accommodation in a location where you have the access to kitchen equipment. You will also be able to claim tax return for costs of commute which exceeds 22000 NOK (up till 70500 NOK) and use second tier tax allowance. Persons who are just embarking on their careers in Norway and covering the costs of their travel, accommodation and food will be able to claim 10% tax allowance.

More details are available online: www.podatek.no