Also in the news...
New plans revealed to save small firms £22,000 a year and improve access to cash
New Fair Payments and Disability Finance Codes launched to support SMEs
UK support to Ukraine: factsheet
This factsheet summarises how the UK is supporting Ukraine following the Russian invasion.
Avoiding Scheduling Conflicts: Tips for Better Leave Coordination
Effective leave coordination is essential for any workplace. Balancing staff time off with operational needs ensures businesses run smoothly while employees enjoy their well-deserved breaks. However, without proper planning, scheduling conflicts can lead to disruption, reduced productivity, and even strained relationships among colleagues.
Compensation if you're a victim of crime abroad
You may be able to apply for compensation if you’re a UK resident and have been injured because of a violent crime in another country.
Iceland Foreign travel advice
Warnings and insurance Still current at: 21 November 2024 Updated: 21 November 2024 Latest update: Updated information on driving conditions and extreme weather ('Safety and security' page).
Tax Changes In Norway’s 2016 Budget
Announced last month, Norway’s 2016 Budget proposals include a corporate tax rate cut and an increase in the VAT rate.
Tax reform is high on the agenda for the Norwegian Government. Alongside its 7 October 2015 national budget announcement, the Minister of Finance published a white paper outlining plans to be rolled out over the next two years.
Let’s take a look at two changes due to take effect from 2016:
VAT increase
Norway’s 8% VAT rate will rise to 10% from 1 January 2016 following parliamentary approval.Dubbed a “fun tax”, the VAT increase covers transport services and products related to entertainment; movie and event tickets, TV licenses and entertainment services. Consequently, this rate hike would mainly affect the cost of organising events in Norway whether it be by companies for themselves, on behalf of other companies or private individuals.
There is a possibility that this will reduce demand and affect the industries involved in entertainment, but the Norwegian authorities have assumed that the industry will not be too severely impacted.
Looking further ahead, the Ministry of Finance has its sights set on possibly removing current areas of exclusion so that they fall under the VAT system. There is also a Government proposal to introduce indirect taxes within the finance sector, which would include VAT on a number of fees and charges; financial services rendered against compensation and a special tax on marginal income of financial institutions.
Corporate tax rate cut
In order to boost investment and employment - and put Norway on par with the corporate tax rates of Denmark and Sweden - the Government plans to cut its corporate tax rate from 27% to 25% next year.
A second stage would see the rate drop to 22% in 2018. This further reduction follows recommendations put forward in the Tax Commission’s 2014 reform report.
Currently Norway has one of the highest tax rates in Europe, and it sees the need to overhaul taxation to prevent companies moving income to jurisdictions with much lower rates.
The decrease in corporation tax should provide the potential for companies to increase their profits. Ultimately, the move should lead to higher productivity and higher real wages, which would have a positive effect on the Norwegian economy.
Need more information? Get in touch with our expert VAT team.