Tax-exempt organisations
A tax-exempt organisation may have commercial activity that is taxable.
Does this apply to you?
This will apply to you if you represent, for example, a marching band, choir, or other cultural organisation, sports club, non-governmental organisation, environmental organisation, interest organisation, religious community, a water, road or local residents’ association, public health organisation, welfare organisation, or student organisation. Many of these are voluntary or non-profit organisations.
In some cases, it may also apply to those who represent a private limited liability company or cooperative enterprise.
As a rule, all organisations have a tax liability to Norway. However, there are exceptions for foundations, clubs and associations, religious communities, and, in some cases, private limited companies and cooperative enterprises.
Common to tax-exempt organisations is that they operate without a financial motive (without a commercial purpose). This means that they do not aim to make a profit and/or provide financial benefits to their owners or members.
A tax-exempt organisation may still have commercial activity that is taxable.
If the organisation has several purposes, the main purpose will be decisive for whether the organisation is tax-exempt.
This does not apply to , or businesses assessed as a partnership.
Tax-exempt income
For the income to be tax exempt, it must be directly linked to realising the organisation’s purpose without a financial motive.
The following types of income is exempt from tax for tax-exempt organisations:
- member subscriptions
- entry fees
- training fees
- ticket revenues from sporadic events
- state subsidies
- outright donations and grants
- income from members’ meetings (club evenings, meetings, functions, etc.)
- income from individual, temporary activities, and arrangements (garage sales, kiosk during organisation events, etc.)
- sales of supporter equipment
If you only have tax-exempt income, you do not have to submit a tax return.
When do you have to pay tax?
A tax-exempt organisation may have taxable activity. The organisation is responsible for finding out whether it has to pay tax on the income from these activities.
What is taxable income is decided by – in this order:
If the organisation has activities that are not directly related to the main purpose, you may have to pay tax on the income from these activities.
- Sale of goods and services that can affect free competition in the market – such as courses, books, moving services, etc.
- Renting out properties – such as a club house, sports hall, multistorey car park, parking space, or buildings such as summer guest houses/hotels, etc.
- Sale of real property – such as buildings and building plots
- Capital management – such as dividends (profit) from shares and securities, forestry, etc.
If the activity is not directly related to your purpose:
You must consider whether it’s a one-off event, or if it’s a recurring activity.
For instance, one or a few events such as a bingo or garage sale will normally be sufficiently random in nature for them not to be considered as taxable commercial activity.
If the activity is recurring, for example frequent relocation assignments, this would suggest that taxable commercial activity may be taking place. The same can apply if you receive assignments because of active marketing.
If the activity is not directly related to your purpose, and it can be categorised as a reccuring activity:
You must check whether you have a gross turnover below or above the threshold for tax liability.
- work organisations, including trade unions
- industrial organisations
- political organisations and party-affiliated organisations
- student organisations
- scientific organisations
- professional organisations
If the organisation is not considered benevolent or charitable, you must pay tax if you have a total gross turnover above NOK 70,000 per year from these activities.
If your exceeds the amount of NOK 70,000, it must pay tax from the entire net income.
You have a deduction entitlement for expenses you have incurred in connection with the taxable income.
Example calculation of taxable amount:
You have rented out the folk high school as a summer hotel in June, July, and August and have had a total gross turnover (rental income) of NOK 200,000, that is, above the threshold amount of NOK 70,000.
In the same period, you had expenses for salary, electricity, and cleaning in connection with the rental, for a total of NOK 150,000.
Total gross turnover NOK 200,000
- expenses in connection with the rental NOK 150,000
= taxable net income NOK 50,000
- hobby associations
- handicraft associations with the purpose of promoting good Norwegian handicrafts culturally, financially, and socially
- humanitarian and social organisations
- sports organisations and sports clubs
- internationally oriented organisations, human rights organisations, and solidarity organisations
- women’s organisations and women’s issues associations
- cultural organisations, cultural heritage organisations and nature, outdoor recreation, and environmental protection organisations
- Norges Bygdeungdomslag (“Norwegian Rural Youth”) with the purpose of bringing together all young people with an interest in promoting and safeguarding rural communities and the interests of young people
- religious organisations and belief-based communities
- spontaneous action groups, ad hoc movements
- local residents’ associations, neighbourhood associations and local environmental organisations
- other associations and groups (Freemason lodges, Rotary, Lions, etc.)
Benevolent or charitable organisations must pay tax if the total gross turnover is more than NOK 140,000 per year from these activities.
If your exceeds the amount of NOK 140,000, it must pay tax on the entire net income.
Your organisation has a deduction entitlement for expenses incurred in connection with the taxable income.
Example calculation of taxable amount:
Your organisation is a marching band that has weekly cleaning assignments with a total gross turnover of NOK 155,000 per year, that is, above the threshold limit of NOK 140,000. In the same period, the marching band had expenses for detergent for a total of NOK 20,000.
Total gross turnover NOK 155,000
- expenses in connection with the cleaning job NOK 20,000
= taxable net income NOK 135,000
Note that taxable commercial activity may be taking place even if the activity is carried out using free labour, for example a voluntary work assignment.
If your organisation has taxable income, it must pay net wealth tax on assets or property related to the taxable income. Wealth below NOK 10,000 is exempt from tax.
Tax-exempt organisations organised as private limited liability company do not pay net wealth tax. It’s the shareholders who pay tax on wealth in private limited liability companies.
Tax return for organisations and companies
What you must do
You must be able to document the organisation’s income and expenses.
Basics of accounting, bookkeeping, and auditing requirements (Altinn)
About reporting obligations to the Register of Company Accounts (the Brønnøysund Register Centre)
More about best practices, accounting, and cash register systems
From and including the tax year 2023, organisations must submit via an accounting system.
Tax return for organisations and companies
If the organisation is not tax liable, you do not have to submit a tax return for the organisation.
You must submit a VAT return for the organisation when it has sold vatable goods and services for more than the threshold amount over a period of 12 months.
The threshold amount for submitting a VAT return is
- NOK 140,000 (not including VAT) for charitable and benevolent organisations
- hobby associations
- handicraft associations with the purpose of promoting good Norwegian handicrafts culturally, financially, and socially
- humanitarian and social organisations
- sports organisations and sports clubs
- internationally oriented organisations, human rights organisations, and solidarity organisations
- women’s organisations and women’s issues associations
- cultural organisations, cultural heritage organisations and nature, outdoor recreation, and environmental protection organisations
- Norges Bygdeungdomslag (“Norwegian Rural Youth”) with the purpose of bringing together all young people with an interest in promoting and safeguarding rural communities and the interests of young people
- religious organisations and belief-based communities
- spontaneous action groups, ad hoc movements
- local residents’ associations, neighbourhood associations and local environmental organisations
- other associations and groups (Freemason lodges, Rotary, Lions, etc.)
- NOK 50,000 (not including VAT) for enterprises and most organisations
A tax-exempt organisation has the same obligations as other employers.
The payment of board fees and expense allowances to board members, other elected representatives, and active members will generally be treated in accordance with the same rules as salary payments and remunerations. Salary also includes overtime remuneration, holiday pay, sick pay, etc. Everyone who has employees or pays salaries, pensions or other benefits must submit the a-melding.
- hobby associations
- handicraft associations with the purpose of promoting good Norwegian handicrafts culturally, financially, and socially
- humanitarian and social organisations
- sports organisations and sports clubs
- internationally oriented organisations, human rights organisations, and solidarity organisations
- women’s organisations and women’s issues associations
- cultural organisations, cultural heritage organisations and nature, outdoor recreation, and environmental protection organisations
- Norges Bygdeungdomslag (“Norwegian Rural Youth”) with the purpose of bringing together all young people with an interest in promoting and safeguarding rural communities and the interests of young people
- religious organisations and belief-based communities
- spontaneous action groups, ad hoc movements
- local residents’ associations, neighbourhood associations and local environmental organisations
- other associations and groups (Freemason lodges, Rotary, Lions, etc.)
For payments that do not exceed NOK 10,000 per employee during the year, you do not have to submit the a-melding.
Charitable and benevolent organisations must submit a simplified a-melding when:
- the salary expenses per employee amount to less than NOK 80,000 during the year
- the total salary expenses for all employees amount to less than NOK 800,000 during the year
If the payments exceed these amounts, you must use:
Salary or other payment below NOK 10,000 during an income year is exempt from tax for the recipient.
More about odd jobs and services
Voluntary organisations, religious and belief-based communities can apply to be approved recipients of gifts.
If the organisation is approved by the Tax Administration, the donors can get a tax deduction for the gifts.
After you’re approved, you must report the gifts online to the Tax Administration.
Specific information for
For sport clubs, it has been accepted that the threshold amounts for tax liability and employer's national insurance contributions apply for individual groups within the club, for example, ski groups and football groups. Each group must have its own board of directors and keep their own accounts. This does not apply to further division into subgroups by, for example, age or gender.
Sports clubs have their own rules regarding accounting obligation.
Kiosks and cafés will generally not be considered taxable commercial activity if the kiosk or café:
- is open only during organisation events or training, and
- completes sales aimed at spectators and participants, and
- offers a limited range of typical kiosk or café products, and
- is staffed by unpaid personnel
If a tax-exempt organisation sells goods from a kiosk or café with fixed, regular opening hours, it must pay tax on the income. This applies regardless of whether the kiosk or café is located at or close to for example a sports arena.
Cooperative enterprises without financial purposes have their own requirements for description in the by-laws of how they can dispose of annual profits (retroactive payment) and dissolution. This will be part of the assessment of whether the organisation is considered tax exempt or tax liable.
Read more at Samvirkene (The Norwegian Co-operative Organisation)
When we assess whether the company can be considered tax exempt, we will emphasise that the company has stipulations on:
- the company’s purpose
- limitations on payment of dividend and any group contributions
- how the wealth is to be distributed in the event of dissolution
If the organisation has subsidiaries, the activities of the subsidiaries will also be taken into account in the assessment.
Companies performing work training
When we assess whether a private limited liability company that engages in work training (AFT) or permanently adapted work (VTA) can be considered a tax-exempt organisation, we attach importance to whether it has received approval for the activity from NAV.
More about permanently adapted work at NAV
Private schools
When we assess whether a private limited liability company that runs a private school can be considered a tax-exempt organisation, we attach importance to whether it receives public subsides regulated by law.
If your organisation produces, for example, beverages, with or without alcohol, you must check whether the organisation must be registered as liable for excise duty and pay excise duties.
Check if and how you should register your enterprise as liable for excise duties
Supporting documents if you contact us
If you need guidance to determine whether your organisation is tax exempt or has taxable activities, you can contact us.
If you write to us, please include supporting documents such as:
- the organisation’s by-laws
- a description of the actual activity
- the annual accounts for last year
- the plans and budgets for the coming year
Legal sources
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The Tax Administration's guide Skatte-ABC: About tax-exempt institutions