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The benefits of checking your tax card in Norway right away

Norway's Tax Administration made tax cards for 2023 available on Thursday. The tax authority recommends people check the information on their cards to avoid paying too much tax.

Published: 15 December 2022 17:49 CET
Tax card 1
If you have a lot of debt, small adjustments to your tax card can free up thousands of kroner a month. Screengrab: Norwegian Tax Administration

As of Thursday, December 15th, people in Norway are able to access their tax cards on the Tax Administration’s website, here.

After you access your tax page, you will be able to see the estimate of taxes that you will have to pay in 2023 based on the Norwegian Tax Administration’s calculations.

Marta Johanne Gjengedal, divisional director at the Norwegian Tax Administration, asks people to take a second look at their tax cards.

“We make an estimate of what the individual will earn during 2023, how their most important deductions will change, and calculate the tax based on this information. But it is important to know that we base these calculations on figures from 2021 and that the tax card you receive now is not necessarily conclusive…

“If you have financial challenges, having correct tax deductions is the most important thing you can do. Then you know what money you have at your disposal,” Gjengedal told Norwegian Broadcasting (NRK).

Why you should double-check your tax card for 2023

Gjengedal recommends people check and, if necessary, change their tax cards right away, before the New Year, so that they can get the full effect of the changes as early as their first salary or pension payment in January.

“There have been such big changes in 2022 that we probably weren’t able to account for them in our calculations,” she noted.

Norway’s central bank (Norges Bank) raised its key interest rate to 2.75 percent on Thursday, but the actual interest that your bank charges you will be even higher than that.

That means you will have to pay even more to banks for the money they lent you. As most people in Norway get a floating interest rate on their home loan, they can expect a rate of between 4 and 5 percent after the New Year.

That is where your tax card comes into play. As the interest rate will likely be more than twice as high as the last time you (likely) adjusted your tax card, you can also claim more interest deductions.

If you have a lot of debt, minor adjustments to your tax card can free up thousands of kroner a month.

An example based on a 3 million kroner loan

As NRK points out, in Norway, you get 22 percent of what you pay in interest back.

You can already calculate the sum you will pay in interest in 2023 and enter it into your tax card.

If you have a loan of, for example, 3 million kroner and an interest rate of 4.5 percent, you will pay some 135,000 kroner in interest in one year.

That means that you can get 2,475 kroner on your tax back every month, the national broadcaster notes.

If you don’t make the adjustment now, you will have to wait to get your money back in the tax settlement in a year and a half.

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ECONOMY

‘Turning point’: What the future holds for Norway’s economy

The standstill in Norway's economy may soon be at an end, according to a new report from Norway's national data agency. The agency isn't alone in its optimistic outlook, as the country's PM has said the country is at a 'turning point'.

Published: 14 June 2024 11:19 CEST
'Turning point': What the future holds for Norway's economy

Norway’s economy should begin to pick up in the coming months and years after a period of stagnation, according to a national data agency, Statistics Norway, in a forecast on the Norwegian economy.

“With lower interest rates and clear wage growth, household consumption will increase. Economic activity will also pick up as a result of increased public consumption and an increase in housing investment,” said Thomas von Brasch, head of research at Statistics Norway.

The stagnation would likely continue for the rest of 2024 before picking up in 2025 and returning to a more neutral position in 2026.

“The standstill in the Norwegian economy is soon over,” von Brasch said.

After a period of high inflation, peaking at 7.5 percent in October 2022, price rises have begun to moderate. During this period, inflation in Norway was at its highest level since the 1980s.

This is good news for those hoping for lower interest rates, as the central bank had raised rates rapidly to try and control inflation and get it towards a target of two percent.

“Lower inflation at our trading partners will cause inflation here at home to continue to fall. Reduced interest rates internationally also contribute to the policy rate being gradually cut in Norway,” von Brasch said.

After the latest inflation figures for Norway were released, many economists predicted that the first cut would arrive around December. Between May 2023 and May 2024, inflation was measured at 3 percent.

READ ALSO: What Norway’s latest inflation figures mean for your finances

Market rates, the interest rates consumers pay, are expected to fall from around 4.7 percent this year, to 4 percent next year, and 3.5 percent the year after.

Norway’s PM, Jonas Gahr Støre, said the Norwegian economy was at a “turning point”, with the future looking much more positive for those in Norway.

“It is good news for people’s finances and clearly confirms that we are at a turning point in the economy where people can get better advice. Statistics Norway estimates that price growth will continue downward, so interest rates can eventually be lowered. They also expect increased purchasing power for people this year and in the following years. The government aims for people to get better advice,” PM Jonas Gahr Støre told Norwegian newswire NTB.

One factor that had the researchers at Statistics Norway more uncertain was the development of the Norwegian krone.

“The development in the krone exchange rate is important for inflation, among other things through import prices measured in Norwegian kroner. There is great uncertainty surrounding exchange rate movements,” the report read.

However, it added that keeping exchange rates the same in the coming years could be considered a positive development. This may disappoint those who have been negatively affected by a weakened krone.

Still, there was much better news when it comes to wages. Over the past eight years wages have barely grown in real terms, meaning price increases have outpaced wages. Workers in Norway can look forward to real wage increases of around 1.5 percent until 2027.

Unemployment would rise slightly in the coming years, though, from 4 percent currently to 4.2 percent in 2025.

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