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Thursday, May 23, 2024

Parliament set to agree on tax reform

After years of political quarreling, Norway’s conservative minority government coalition has come to terms with the opposition in Parliament on more tax reform. The goal is to ease the tax burden on business, with the hope of creating more jobs, while taxpayers in general may also get some relief.

News bureau NTB reported Wednesday that the government parties finally went along with the Labour Party’s demand that tax on business earnings be reduced to 23 percent, not the 22 percent that the Conservatives and the Progress Party wanted.

In return, though, Labour went along with changes in how Norway’s controversial formueskatt, literally the “fortune tax” that is imposed year after year on taxpayers’ and business’ net worth, will be calculated. A “new model” for calculating the tax values of assets is being hammered out that’s likely to reduce the actual value of “working capital” by 20 percent.

The goal is to make taxation of Norwegian and foreign-owned businesses more fair. At present, it’s been argued, Norwegian owners effectively pay for the tax breaks enjoyed by foreign-owned businesses that are not subject to fortune tax. Politicians also want to make it more attractive to invest in Norwegian business instead of real estate, which currently offers more tax advantages.

Private individuals are also likely to see changes in how their fortune tax is calculated, with details due after the entire package is hammered out in Parliament later this spring. Government officials appeared confident that they would be getting tax relief as well.

The Parliament’s finance committee has until May 10 to debate the compromise arrived at Tuesday evening on the government’s proposed tax reform. staff



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