Small Business Tax in Norway

Norway offers small-business owners two principal trading structures: the aksjeselskap (AS, private limited company) and the enkeltpersonforetak (ENK, sole proprietorship). Each carries a distinct tax logic, and choosing the right form is one of the first practical decisions a Norwegian entrepreneur faces. This page summarises current 2025 rules for both structures, covering corporate income tax, sole-proprietor personal income, dividends, value-added tax (MVA), and advance-tax payment obligations. Nothing here constitutes personal or business tax guidance; all figures should be verified with a qualified tax professional before any filing decision.

The Norway country overview provides broader context on the Norwegian tax system, including personal income tax brackets and wealth tax.

What is the corporate income tax rate for an AS?

An aksjeselskap (AS) pays a flat 22% corporate income tax (selskapsskatt) on its net taxable income (alminnelig inntekt) for the 2025 income year [1]. The 22% rate has been in place since 2019 and remains unchanged for 2026. Net taxable income is gross revenue minus deductible business expenses, depreciation, and carried-forward losses. Tax is paid via advance instalments rather than a year-end lump sum (see advance-tax section below). An AS with NOK 1,000,000 in pre-tax profit, after allowable deductions, owes NOK 220,000 in corporate tax, leaving NOK 780,000 available for retention or distribution. Financial-sector companies face a 25% rate; petroleum and hydropower are subject to additional resource-rent taxes well above 22%, but these special regimes do not affect ordinary small-business AS activity.

How is an ENK sole proprietorship taxed?

An ENK (enkeltpersonforetak) is not a separate legal entity; its profit flows directly into the owner's personal tax return and is taxed at multiple layers [2][3]. First, net business income is subject to the flat 22% alminnelig inntekt rate alongside all other ordinary income. Second, the ENK owner must calculate beregnet personinntekt (calculated personal income) from the business, which is the basis for two additional charges:

• Trygdeavgift (national insurance contribution): the 2025 rate for general business income is 10.8%, charged on beregnet personinntekt above the NOK 99,650 exempt threshold [4]. A sole proprietor cannot pay more than 25% of income above that threshold in trygdeavgift. The contribution secures pension entitlements and sickness-benefit rights, partly compensating for the absence of an employer paying the separate employer NIC.
• Trinnskatt (bracket tax): a progressive surtax on personal income starting at 1.7% once income exceeds NOK 226,100 (see table below). Trinnskatt is charged on gross personal income before most deductions, so even an ENK with modest profit can reach bracket 2 or 3 if combined with employment income.

The shielding deduction (skjermingsfradrag) for ENK owners reduces beregnet personinntekt by the product of business net assets multiplied by the annual skjermingsrente. The skjermingsrente for ENK is 4.6% for 2025 [5], providing a meaningful tax-free return on capital invested in the business before trygdeavgift and trinnskatt apply.

Source: Skatteetaten bracket-tax rates page [4].

How are dividends taxed under the aksjonaermodellen?

When a personal shareholder receives a dividend from an AS, the aksjonaermodellen (shareholder model) applies [1][6]. The mechanics are:

1. The cash dividend is reduced by the shielding deduction (skjermingsfradrag) for that share. The shielding deduction equals the share's acquisition cost multiplied by the annual skjermingsrente (3.6% for personal shareholders in 2025 [5]). Any unused shielding deduction carries forward to future years.
2. The remaining taxable dividend is multiplied by the oppjusteringsfaktor of 1.72. This upward-adjustment factor has been 1.72 since 2023 and is maintained for 2025 and 2026.
3. The adjusted amount is included in alminnelig inntekt and taxed at 22%.
4. Effective rate on the gross dividend above the shielding deduction: 1.72 x 22% = 37.84%.

Example: a shareholder receives a NOK 100,000 dividend. After a NOK 3,600 shielding deduction (NOK 100,000 acquisition cost x 3.6%), the taxable portion is NOK 96,400. Multiplied by 1.72, that gives NOK 165,808 included in alminnelig inntekt. Tax due: NOK 36,478 (22% of NOK 165,808), an effective rate of approximately 36.5% on the gross NOK 100,000 dividend. Shareholders with higher acquisition costs relative to dividend size see a proportionally larger shielding benefit.

The aksjonaermodellen ensures that withdrawing retained profits as dividends carries a combined corporate-plus-personal effective rate of roughly 51.5% on pre-tax AS earnings distributed in full. Retaining earnings inside the AS at 22% defers that personal-level layer entirely.

How does MVA (value-added tax) work for small businesses?

MVA is Norway's value-added tax, levied at a standard rate of 25% on most goods and services [1][7]. Reduced rates of 15% (food) and 12% (accommodation, passenger transport, cinema) apply to specific categories but the 25% rate covers the vast majority of B2B and B2C transactions for service businesses, consultancies, and retailers.

Registration is mandatory once taxable turnover exceeds NOK 50,000 in any rolling 12-month period [7]. The period can span calendar years -- NOK 30,000 in July and NOK 25,000 in January of the following year cross the threshold even though no single calendar year separately exceeds it. Below the threshold a business may not charge or reclaim MVA. Once registered, the business collects MVA from customers and remits the net amount (output MVA minus input MVA on business purchases) to Skatteetaten via the MVA return (merverdiavgiftsmelding), typically filed every two months via Altinn. Late registration triggers interest charges backdated to when the threshold was first crossed.

For AS companies the minimum share capital is NOK 30,000, and the company must register at Bronnøysundregistrene (the Business Register) before trading. ENK formation requires only a registration in the Enhetsregisteret and, if turnover exceeds the MVA threshold, a separate MVA registration.

What are the advance-tax (forskuddsskatt) payment rules?

Neither AS nor ENK owners wait until year-end to settle their full tax bill. Both structures operate under an advance-tax system [3][8]:

ENK sole proprietors pay forskuddsskatt in four equal instalments during the income year, due on 15 March, 15 June, 15 September, and 15 December. The Tax Administration issues invoices based on an estimate filed when the business is registered; owners should notify Skatteetaten if actual profit differs significantly from the estimate to avoid large top-up payments or penalties. As a working rule, setting aside approximately 40% of business profit throughout the year covers income tax, trygdeavgift, and likely trinnskatt for most sole proprietors at mid-range income levels.

AS companies pay corporate tax in two instalments falling in the year after the income year: 15 February and 15 April. Any residual balance is settled when the final tax assessment issues, typically in October of the same year. AS shareholders who take salary from their own company have PAYE withholding deducted by the company under the normal employer rules; it is only dividend distributions that fall outside PAYE and are assessed separately under the aksjonaermodellen framework.

For any ENK earning substantially above the bracket-tax entry point, or any AS owner weighing salary against dividend mix, the interaction of these rules has material cash-flow consequences. A qualified tax professional can help model the advance-tax position and the most efficient owner-remuneration structure for a specific business situation.

For additional context on the Norwegian tax system, including personal allowances and the full personal income tax framework, see the Norway country overview.