Foreign professional athletes in Norway

10 % standard tax deduction

The law firm Visma Advokater recently assisted a foreign sportsman in obtaining the 10 % standard deduction for 2013 and 2014, resulting in a tax repayment of approximately NOK 22 000.

What is the 10 % standard tax deduction?

The 10 % standard tax deduction is a deduction a foreign employee can choose instead of certain other itemized deductions. The deduction is 10 % of the employee’s gross income from employment, with a ceiling of NOK 40 000 per year.

The foreign sportsman came to Norway during the summer of 2012, and was an employee of a Norwegian sports club for the remaining of 2012, 2013 and 2014. The sportsman was present in Norway less than 183 days during 2012. Therefore, he had only a limited tax liability to Norway for 2012. In 2013, he became a Norwegian tax resident due to the length of his stay.

According to Norwegian tax law, a foreign employee can claim a 10 % standard deduction for the first two income years he or she is taxed as a resident of Norway.

The 10 % standard tax deduction was claimed on the sportsman’s tax return for 2012, most likely because of assistance from his sports club. However, the deduction was not claimed for 2013 or 2014.

How to claim the deduction

Visma Advokater assisted the sportsman in claiming the 10 % standard deduction for 2013 and 2014. In our letter to the tax office, we described and documented the relevant facts and the relevant sources of law. As the deadline for filing a complaint for 2013 had expired, our claim had to be well documented. Otherwise, the tax office could refuse to treat the claim for 2013.

Please note that in some cases it makes sense not to claim the 10 % standard tax deduction. The effect of the 10 % standard deduction is that certain other deductions will not apply, for instance deduction for travel between housing in Norway and permanent workplace, interest on debt and child-care deduction.

Your tax return

By performing a quick review of your recent tax returns, Visma Advokater will be able to give a qualified advice. We may then also assist with filing a claim to the tax office.

It is furthermore, important to check if you are entitled to the 10 % standard tax deduction for 2015. The tax return for 2015 will be available electronically from end of March 2016, and the filing deadline is end of April 2016.