Tax on rental income from Airbnb in Norway

[Karan95]

Hi everyone, 

Does anyone knows short term rental of one apartment in Norway is considered business and subject to business tax in Norway? 

Thanks 

Karan 

[Mike-And-Jane0]

@Karan95 You clearly do not want to accept that the government website suggests you are a business. If you want to fight this then pay for an accountant in Norway versed in such matters. 

[Karan95]

No. What you say is not correct. The website does not say clearly if it is business or not. I contacted tax office of Norway four times and talked to four different people. Three of them told me that is not a business and one said it is a business. It is interesting for me to see what other Airbnb hosts in Norway experienced regarding the tax. That is all. Better not to judge others quickly without enough evidence. 

[Helen744]

@Karan95 Tax law is a funny beast but the devil is in the detail Karan. In Australia there is no need to have a business liscence if the income derived is below a certain amount such as yours. Its simply a matter of adding the income to any other taxable income after deductions etcetera are taken into account.It also depends on if you are the only owner of the property .Which 'costs of doing business", not 'a business' are allowable as this will once again reduce your income. If none of this makes sense to you Karan then it is wise to make an appointment with a 'local tax agent ' or indeed to ring the tax department in your country... H

[Helen744]

@Karan95 'to be a business or not to be  a business is the question Karan. There is not one answer to that question . Its all about levels of income , costs etcetera. The tax departments website in Australia will clearly tell you when you 'must be a business' and when you 'can choose not to be a business' . Look these things up . Or better still look up 'tax law' as it applies to Airbnbs .We are not able to help you with definitions of tax law and you are asking the wrong question ... H

[Karan95]

Yes Helen you are right. 

In my official question from the tax office, I defined different parameters such as estimated level of income, size of my apartment, approximate hours I expect to work on average per month, etc. 

[Helen744]

@Karan95 I think again you may be mixing up different types of tax. You are not your own employee. You will probably work many more hours in your own right that you could afford to pay or even be generally able to cover the costs of. The money that goes into your account is called 'income' . The money that you receive from all other sources is also income. the costs of running an airbnb are generally deductible ,in other words can be taken off your income before you add it to your overall income. Tax agents charge about 150 dollars for doing your tax, it could save you a lot more than that and is worth it for 'peace of mind'. the agent will also advise you if you do not have to send a tax income statement to the tax department and a which stage you may need to. Airbnb has provided sufficient copy of your transactions for you to print out for the year and add it all up for yourself.... H

[Karan95]

Hi Helen, 

Thank you for sharing this information. According to three people in the tax office with whom I spoke, renting out my own apartment for Airbnb is not considered a business. As a matter of fact, one person in the tax office stated that it might be considered a business based on the amount you earn, but he did not know what the income limit was. 

My action was to send an official letter to the tax office with a signature asking the question. I expect a response in ten days. I will decide how to rent out my apartment based on their official response. During the past year, I rented out my apartment only for four months through Airbnb, and it was not considered a business. It would be interesting to hear different Airbnb hosts' experiences regarding income taxation in Norway. 

[Helen744]

@Karan95 I am unaware of general tax law in your region but common sense tells me that you do not have to be a business in that circumstance Karen . Tax law has nothing to do really with anything except income. The amount of income you receive for the year , which you personally should be able to calculate . I suggest it is 'false economy to restrict yourself to four months ' as Airbnb deductibles will only apply for those four months. You need all your bank details , all your reciepts and to read up on tax law for Airbnbs generally as when you do go to the 'tax man , or lady they will need all of that. Even if you are not 'running a 'business ' it is important to be 'business like ' and to educate yourself about these things . It is also important to know when a 'tax year ' begins and ends as part of your income could be applied either side of the year , thus reducing it again.In Australia it is not 'illegal to attempt to 'reduce tax' but it is illegal to 'avoid tax''... H

[Karan95]

Thanks Helen. I understand your comment. 

The issue is that according to the rules in Norway if I rent out my apartment  (where I live) short term through Airbnb and it is not considered as a business, then I can not deduct all the expenses. The rule is that the first 10,000 NOK is not taxable and then I should pay 22% tax on 85% of the total income on Airbnb. That was one reason why I combined it with long rental and then would be able to deduct all Airbnb costs from my long term rental. 

But if that is considered a business, the tax rate would be 50.6% but it is possible to deduct all the costs. 

[Helen744]

@Karan95 If that is the case then the tax law where you are is a very peculiar beast . I am hoping for your sake that is incorrect. Generally deductibles are applied before tax is calculated , not after... H

[Karan95]

It is very difficult to distinguish between Airbnb short term rental to be considered a business or non-business activity based on the rules given in Skatten in Norway. If someone rent out his own apartment frequently (short term) through Airbnb, does it considered business or no?