Taxation of Motor Insurance Policies: Norway

Edit Buliczka
March 7, 2024

Norway has an indirect tax that applies to elements of coverage under a motor insurance policy. This blog details everything you need to know about it.

As with our dedicated Spain IPT overview, this blog will focus on the specifics in Norway. We also have a blog covering the taxation of motor insurance policies across Europe.

 

Which taxes are payable in relation to motor insurance policies in Norway?

In 2018, Norway replaced the collection of traffic insurance tax with a new fee known as the Traffic Insurance Fee (TRIF). This fee is collected by the insurance companies on behalf of the Norwegian State, together with the premium for third-party motor liability insurance coverage.

The annual insurance tax needed significant administration. As such, implementing a new tax scheme on mandatory automobile third-party liability insurance policies aimed to streamline and speed up tax and excise administration. With the new approach, insurance companies must invoice TRIF together with the premium amount sent to registered vehicle owners. The fee is clearly stated on the invoice in a distinct line aptly named “Traffic Insurance Fee”.

 

How is TRIF on motor insurance policies calculated in Norway?

In Norway, the TRIF is charged for all registered cars that weigh under 7,500 kg. The Norwegian Tax Office collects the so-called weight-year tax on heavier vehicles, in which the TRIF is not due.

Norway charges the fee for insurance contracts on compulsory third-party liability insurance regarding motor vehicles registered domestically. The fee also applies to the sum received by the Norwegian Motor Insurers’ Bureau for uninsured motor vehicles or when the new owner has not taken out insurance for the motor vehicle.

There is no insurance premium tax on insurance policies covering Class 3 policies.

As stated above, insurance companies collect TRIF at the same time as the premium, so the fee is distributed in accordance with the frequency of premium payment. This can be monthly, quarterly, semi-annually or annually.

TRIF is a daily fee based on the type and usage of the vehicle. Vehicles are classified into five classes, from a) to f).

  • Group a) covers passenger cars, vans, camper vans, buses, combination cars, lorries, and tow trucks with a maximum total weight of 3,500 kg or higher
  • Group b) covers diesel-powered automobiles out of group a) that do not have a factory-installed particulate filter
  • Group c) comprises annual tests identifying markings for motor vehicles
  • Group d) covers motorcycles
  • Group e) covers other vehicles, including taxis, mopeds, tractors, vehicles that transport disabled people and vehicles that are over 30 years old
  • Group f) covers electric-powered vehicles

The new rates take effect on 1 March each year. This means that if the policy is issued or renewed on or after this date, the new rates will apply. The rates for 2024 range from NOK 0.37 (approx. EUR 0.032) for group e) to NOK 9.11 (approx. EUR 0.80) for group b).

 

What vehicles are exempt from tax in Norway?

Exemptions from TRIF occur based on the car’s usage or the owner. For example, motor vehicles registered at the Nordic Investment Bank that are used for official bank operations are exempt from TRIF. Vehicles registered at NATO or NATO headquarters, forces or personnel, as defined by international agreements, are also excluded. The exemption also applies to stolen cars.

The Ministry has the authority to issue regulations for implementation, delimitation and exemption criteria.

It is also worth mentioning that if liability insurance is not compulsory to take out, for example, in the case of the Norwegian state, municipalities or local institutions, the person responsible for the motor vehicle will be considered “self-insured”. In these circumstances, TRIF is not due.

Read our IPT Guide to learn more about Insurance Premium Tax compliance.

Have questions about the taxation of motor insurance policies or IPT in Norway? Speak to our experts.

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Author

Edit Buliczka

Edit is a senior regulatory counsel. She joined Sovos in January 2016 and has extensive IPT knowledge and experience. Her role ensures the IPT teams and systems at Sovos are always updated with legislative changes. She is a Hungarian registered tax expert and chartered accountant and has worked for companies in Hungary including Deloitte and KPMG and as an indirect tax manager she worked for AIG in Budapest. She graduated with an economist degree from Budapest Business School, faculty of finance and accountancy and also she has a postgraduate diploma from ELTE Legal University in Budapest.
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