– We want it to be easier for pensioners to stay in the job longer while they receive the pension they have earned through a long working life. This gives retirees a total tax of 1.35 billion in 2011, says Finance Minister Sigbjørn Johnson.
The government proposes tax changes that aims many older workers have better incentives to work than the current rules. Instead of a special tax deduction for early retirement and age pensioners , a new tax deduction has been proposed to secure those who have only the minimum income not to pay income tax. On the other hand, increase in social security contributions on pension income and removing the special allowance for age have also been adopted.
Taxes on Labor Market and Tax Deduction for Donation
The rates in the top tax has not changed, and the amounts given are held in real terms at about the same level. Furthermore, the Ministry is working on a broad evaluation of tax reform, which will be presented to Parliament later.
The government also proposed to extend the gift deduction scheme to include NGOs in the EEA. The amendment allows people who pay taxes in Norway, and who want to support a voluntary organization in an EEA country, can get a deduction for these donations. At the same time, the criteria for which organizations to be included change by removing smaller religious societies without national scope from the arrangement.
There is currently a deduction for donations to organizations with a cultural purpose. However, the government try to find a clear definition of the concept of culture. The Government therefore proposes that the Ministry may issue regulations about which areas of cultural heritage to qualify to come under the gift tax scheme. It is also proposed that the Directorate of Taxes will publish a list of NGOs that receive tax deductible gifts and donations each year.
Changes in property tax
In the new period, municipalities will be allowed to tax all commercial property that is not explicitly excluded in property tax law. These include the service sector, such as hotels, shops and offices, as well as commercial property is now defined as' works and use “. Municipalities will still have the opportunity to tax the “work and use” under current rules.
– The introduction of VAT liability by private individuals purchasing online services from abroad. The aim is the implementation from 1 July 2011.
– The basic tax on mineral oil increased by 8.1 cents per liter excess of price adjustment, which represents an increase of 1 øre per kWh.
– One-time fee is adjusted to further contribute to lower CO 2 emissions from newly registered cars.
– The tax on snuff and chewing tobacco increased by 10 percent in real terms, and tax on other tobacco products increased by 5 percent in real terms.
– Taxes on alcohol increased by 5 percent in real terms.
– Efforts to establish a joint electricity certificates market with Sweden from 2012. The Government proposes to include income from electricty certificate in interest income due to power plants.
– To clarify the rules and avoid tax motivated erosion, it is proposed that the value of waterfall rights shall not be deductible because of the interest income for the power plant.
– Some limits are held nominally unchanged, including the amounts given the wealth tax and inheritance tax.
The table below shows the estimated revenue of the Government's proposed changes to the tax changes for 2011.