Skjermingsfradrag

Skjermingsfradrag refers to a tax deduction available in Norway that aims to reduce the impact of double taxation on company profits. It is designed to allow shareholders to receive dividends without being taxed on the same income at both the company and personal level. The skjermingsfradrag is calculated based on the company's equity and is applied to dividends received by the shareholder. The purpose is to equalize the tax treatment of investments in companies and other forms of investment, such as direct ownership of assets.

The deduction is added to the shareholder's taxable income, but it also reduces the tax payable on dividends received. If the skjermingsfradrag is greater than the dividend received, the excess can be carried forward and used against future dividends. This mechanism encourages investment in Norwegian companies by mitigating the tax burden on distributed profits. The specific rules and rates for calculating the skjermingsfradrag are determined by Norwegian tax legislation and can be subject to change. It is a fundamental component of Norway's corporate and personal income tax system.