Employment Tax

Norway | Norway proposes 2026 State Budget with key tax and VAT changes

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Summary

On October 7, 2025, the Norwegian Cabinet presented its proposal for the 2026 State Budget, outlining several tax-related adjustments. The proposed measures aim to support younger workers, provide greater tax relief for individuals, and align Norway’s tax framework with international standards. The proposal is pending parliamentary approval, expected before the end of 2025.

The detail

The proposed budget includes a mix of personal tax reliefs, wealth tax changes, and environmental tax increases:

Key details:

• Personal allowance increases to NOK 114,210 (from NOK 108,550).
• IPS deduction rises to NOK 25,000 (from NOK 15,000).
• New pilot work deduction up to NOK 125,000 for individuals aged 20–35.
• Wealth tax threshold increases to NOK 1.9M (individuals) / NOK 3.8M (couples).
• OECD Pillar Two alignment under the Supplementary Tax Act.
• CO₂ tax rates raised across multiple industries.

What this means for employers

Employers may see indirect effects through employees’ take-home pay and potential adjustments in payroll systems to reflect new deductions once approved. Environmental tax increases could also raise operating costs in affected sectors.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Rune Strømhylden
Director

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