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Norway considers tourist tax to deal with its growing popularity

Norway is currently enjoying a newfound level of popularity amongst tourists.

Norway considers tourist tax to deal with its growing popularity
A growing number of politicians argue that growing tourism numbers are leaving areas like Lofoten in dire need of new funding sources. Photo: Bo Johanson / NTB scanpix
Spurred in part by ‘the Frozen effect’ that has seen tourism rise sharply since Disney's 2013 film Frozen, which was developed with the support of Norway's tourism agency, some officials began warning that the country was experiencing “too much of a good thing”. 
 
Now a number of politicians are suggesting the implementation of a tourist tax to help local communities deal with the influx of visitors
 
Local Nordland party leaders of the Socialist Left Party, the Christian Democrats, the Liberals and the Red Party have backed a new tourist tax to finance the upkeep needed as a result of the growing tourist numbers. 
 
 
This summer has seen news reports about roadside bathroom facilities in desperate need of maintenance and the ongoing safety concerns at popular tourist spots like the famous Trolltunga promontory, which has become such a popular destination for tourists that mountain rescue services can hardly manage to come to the aid of all of the ill-prepared visitors who run into trouble on their hike. 
 
Spurring the call for a tourist tax is the method in which the Norwegian state transfers funds to local municipalities. The funding is largely based on the number of year-round residents, which means that tourist destinations like the Lofoten archipelago are at a significant disadvantage because its public infrastructure is worn down by tourists who are not factored in to the economic distribution. 
 
 
Thus Nordland is seeing growing political support for a tourist tax, and NRK reports that the idea is also catching hold in Western Norway. 
 
The Christian Democrats’ leader in Nordland, Dagrun Eriksen, is one of the local politicians pushing hard to introduce a tourist tax in the area. 
 
“Down south [in Oslo, ed.] they have no idea of the extent of what Lofoten is facing. So the tourists also need to contribute their fair share and a tourism tax into a shared fund could raise the money needed for necessary infrastructure projects,” Eriksen told broadcaster NRK. 
 
 
Eriksen is likely to have a hard time convincing the Norwegian government to go along with a tourist tax however. In a tourism report issued this spring, the government argued that Norway is already a very expensive destination and that an additional tourist tax would hurt the competitiveness of the national tourism industry. 
 
“The tourism industry needs to find a suitable way to finance this on its own. They have already delivered good solutions in similar situations,” Dilek Ayhan, the state secretary at the Norwegian Ministry of Trade, Industry and Fisheries, told VG. 
 
Ayhan was backed by Progress Party spokesman Erlend Wiborg, who pointed out that despite Norway’s newfound popularity amongst foreign tourists, it is still primarily Norwegians who holiday in the country.
 
“Norway is already an expensive country to take a vacation in,” Wiborg said. “If there is one thing we don’t need now then it is more taxation that will result in fewer tourists and possibly a loss of [tourism] jobs. The solution could be as easy as making people pay for the [public] toilet when they use it.”
For members

TAXES

Tax returns in Norway: Five things you need to know

Norway’s tax season is upon us. We’ve put together some essential tips and information to help you understand the Norwegian tax system better. 

Tax returns in Norway: Five things you need to know

Keeping track of the key dates

Taxes can be tricky for some, but it can pay to be prepared. Keeping track of this year’s key dates when it comes to tax season can be a huge helping hand. 

Tax returns are already being sent out and will continue to be posted until April 4th. Then, April 30th will see the deadline to submit your tax return. 

If you feel like you need more time to assess the previous year’s finances, the end of April also sees the deadline for applications for a postponed deadline. 

READ MORE: The key Norwegian tax season dates you need to know about

You are able (and meant) to add any student loans from abroad to your tax return

You can add your student loan to your debts and claim the interest as tax-deductible. In fact, you are supposed to declare all overseas assets, received and earned interest, in addition to any debts and loans.  

However, this means the debt is visible to Norwegian lenders, which can impact your lending ability.

You can get a rough idea of whether you can expect a rebate or repay tax

After submitting your tax return, you will receive a tax assessment notice. In addition, you’ll receive a notice with information regarding how much money you’ll receive as a rebate or how much you’ll need to repay if you’ve overpaid. 

When you receive this will give you a fair idea of whether you can expect money back or if you’ll need to dig into your pockets to pay back any money you owe. 

If you receive your tax assessment notice in May, you will likely be due a refund, whereas if you receive it from June onwards, you’ll probably owe the tax man money. 

Tax return versus a tax receipt

Most people working in Norway will receive a tax return, which is an outline of your income, deductions, wealth and debt. However, not all people will receive a tax return, and some will receive a tax receipt. 

If you participate in the PAYE (Pay as You Earn) scheme, you will not receive a tax return. Instead, you will receive a tax receipt, which shows the amount of tax that you’ve paid in Norway. Those in the PAYE scheme play a flat rate of 25 percent. 

One of the key differences is that you cannot claim deductions with a tax receipt. Also, some lenders only accept tax returns rather than receipts when it comes to giving credit. This means those on the PAYE scheme may find it challenging to build a credit history in Norway as their income and earnings are not taken into account. 

You are expected to pay tax on your worldwide income 

Once you are considered a tax resident of Norway, you generally are required to pay tax on your worldwide income. Tax residency is slightly different to legal residence. 

The rules can be a bit complex, and if you are earning an income in two countries, several factors will come into play, such as whether Norway has a tax treaty with those countries and how much you are taxed on that income in other countries. 

If you have any questions or queries regarding your tax, it is best to contact The Norwegian Tax Administration or a qualified accountant. 

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