Banking, Money and Taxes in Norway
Banking in Norway is fairly straightforward. Given the country’s high level of technological advancement, most transactions in the country take place online and with cards.
It is important for expats moving to the country to get a national ID number, which makes it possible to open accounts and carry out transactions.
Currency in Norway
The official Norwegian currency is the Norwegian Krone, or NOK. It has become one of the world’s most stable and powerful currencies.
- Notes: 50, 100, 200, 500, 1000 NOK
- Coins: 1, 5, 10, 20 NOK
Banking in Norway
Most financial transactions in Norway are conducted with a debit card issued by a local bank. Cash is becoming rare in this highly technological society. Cheques no longer exist, and are considered archaic.
Online banking is very common, and is used for just about any transaction. Mobile banking is also commonplace but it can take some time for expats to master, especially as the systems are mostly in Norwegian.
Credit cards are accepted, but most Norwegians use their bank card for cash purchases, and credit cards are not as common as in other Western countries.
Getting a credit card is easy for anyone with a local bank account, but Norwegians don’t use them too much unless they have major purchases. However, local and foreign credit cards are accepted almost everywhere. Eurocard, MasterCard, VISA, American Express and Diners Club are the most common.
It is vital for expats to open a local bank account if they plan to live and work in Norway. In order to do so, they need a national ID number called a personnummer. This national ID number, which every resident and citizen must have, is necessary to get paid, pay taxes, open a business and receive social benefits such as medical services, unemployment compensation and parental leave.
Expats planning to stay in Norway for more than six months, will have to register at the National Population Register (Folkeregister) in order to apply for an 11 digit national ID number which consists of the holder’s date of birth, and a five digit personal code. Applicants will require their passport and residence permit. They will also have to fill in the form titled “Notification to the National Registry (NR) of move to Norway from abroad”.
If someone is not yet a resident, they can receive a temporary number at Skatteetaten, the Norwegian Tax Authority. A D-number (dummy number) is a registration number for foreigners who are not yet registered in the Norwegian Population Register.
The main Norwegian banks are DNB NOR, Fokusbanken, Postbanken, Nordea and Sparebanken. Nordea and DNB NOR have English websites.
Opening a bank account in Norway
Opening cheque and savings accounts are easy, and can be done within a day. The process to receive a bank card is fast and simple, and carries the account holder’s image and other necessary information on it.
Expats should to remember is to bring their passport and a passport photo, and to take a queue number when they walk into any bank (or any pharmacy, post office or bakery), so they don’t wait in vain.
Banking hours in Norway are generally 8am to 3:30pm. People often find that once they have their Norwegian bank card, they very rarely need to set foot inside a bank branch.
Sensitive information can be given over the phone with just a name as identification. Norwegians are by default trusting. Honesty is a strong value, and people are taken at their word.
Tax in Norway
While it’s true that taxes are very high in Norway, expats may be pleasantly surprised to find that they are not as high as they feared.
Tax rates range from around 28 to 47.2 percent, which is actually either lower than or comparable to taxes in Sweden, Germany, the Netherlands and Belgium. Standard personal tax is 27 percent or 23.5 percent for those living in the northern provinces of Finnmark and Nord-Troms.
Taxes go toward public services such as healthcare, hospitals, education, transport and communications. Thanks to the strong Norwegian economy, residents can rest assured that they will receive free healthcare, education, pension, paternity leave and employment benefits.
The Norwegian tax year begins on 1 January, and it is important to remember that even non-Norwegian expat residents are taxed on their Norwegian income. Special rules apply to those who have lived in Norway less than six months, and foreign citizens are given a discount on taxes for the first two years of residence in Norway.
Norwegian residents are taxed on their worldwide income, but there are double taxation agreements with the UK, the US and other countries. Expats can obtain more information from their local tax office (ligningskontor).
Norwegian employers are obliged to deduct tax from employees before they are paid. Once someone has found employment in Norway, they are responsible for obtaining a tax card from the local tax office. An expat’s employer and local tax office can help with this process, providing all necessary information on how to apply and what must be enclosed with the application.
Declaring personal taxes is an organised, systematic and simple process. Once someone is listed in the Norwegian system, they will receive a tax declaration with the tax authority’s details and estimates of their income, assets and debt.