Do you have to live somewhere else than your real home, to work? Then you may be considered to be a commuter and thereby entitled to several tax deductions in Norway.
What is a commuter?
For tax purposes, you are considered to be a commuter if you:
- due to your work, must live somewhere else than your real home, and
- qualify for regular visits home
Commuters may be entitled to claim deductions for the extra expenses related to visiting their home abroad, i.e. extra subsistence/ daily allowance, accommodation and travel expenses.
As a main rule, expenses related to commuting from abroad are not deductible. However, the EEA agreement ensures that citizens of EU/EEA who work in Norway have the same rights as employees commuting within Norway.
Download free guide: Individual income tax return to Norway
Commuting to countries outside of EU/EEA area
If you are commuting from a country outside of EU/EEA, you cannot claim deductions related to subsistence, accommodation or visits to your home country. Note that if your employer covers such expenses on your behalf, this will be considered as a taxable benefit for you.
Exemptions exist if the following conditions are fulfilled:
- You don’t claim the standard deduction
- Your actual home is abroad
- You make enough home visits
In such cases, your employer can cover the above-mentioned expenses without you being taxed.
Are you a family commuter or a single commuter?
To claim commuter deductions, your home must be situated within another EU/EEA country. In addition, you must be classified as either a family commuter or as a single commuter.
If you share home with your children and/or a spouse in your home country, you are regarded as a commuter for tax purposes as long as your home is situated in an EU/EEA country.
Documentation, such as marriage - and birth certificates, confirm this status. In addition, you must be able to document the joint residential address in your home country. You are normally required to have at least three or four home visits with overnight stays per year.
If you are not a family commuter, you are classified as a single commuter. Cohabitants are treated as single commuters in this context. However, if you also live with your own children, you are classified as a family commuter.
There are other requirements for single commuters. Single persons are deemed to be resident where they have “independent housing”. To be classified as “independent housing” the residence must:
- be at your disposal for at least 12 months
- be at least 30 square meters
- have running water and drains
If you have “independent housing” in Norway, you will be regarded as a resident in Norway, and you will not be entitled to deductions for visits to your home country. It is important to review the status of the two houses, to consider if the conditions are fulfilled.
Single commuters must go home once every third week. Less frequent visits may be accepted if there are special reasons like illness or lack of finances.
How and when to claim commuter deductions
The commuter costs can be claimed on the personal tax return for the taxpayer. This is due 30 April the year following the income year.
The costs must be split into daily allowance, accommodation and travel expenses.
It is not necessary to forward documentation for this, but you must be able to present documentation if the tax office asks for it.
News for the income year 2018:
The rules for daily allowance for commuters have changed for the income year 2018.
The important changes are:
- For accommodation with cooking facilities, you are no longer entitled to an allowance. This means that 2017 is the last year you may claim the NOK 205 when staying at a guesthouse or in a bedsit/Portacabin with cooking facilities.
- The daily allowance is reduced for the other types of accommodation. The rates for additional expenses for food (board) depend on your type of accommodation:
- Hotel with breakfast: NOK 455 per day.
- Hotel without breakfast: NOK 569 per day.
- Accommodation with cooking facilities: No longer able to claim this expense.
- Accommodation without cooking facilities: NOK 159 per day
- Deductions are limited to a period of 24 months. Living expenses and expenses for food can only be claimed in a period of 24 months. For those already qualified as a commuter, the time starts running from January 1, 2018. Holidays and short breaks, will not stop these periods from running.
Make sure you include all deductions and earnings on your annual income tax return to Norway.