Income and deductions for companies

Name: Income and deductions for companies
Topic: Establishments, enterprises and accounts

Division for Accounting Statistics and Business Register

National level.

Frequency: Annual.

Timeliness: Data are collected after ordinary assessment, i.e. 10 months following the fiscal year covered. The statistics are published about 4 months later.

Not relevant.

Collected and revised data are stored securely by Statistics Norway in compliance with applicable legislation on data processing.

Statistics Norway can grant access to the source data (de-identified or anonymised microdata) on which the statistics are based, for researchers and public authorities for the purposes of preparing statistical results and analyses. Access can be granted upon application and subject to conditions. Refer to the details about this at Access to data from Statistics Norway.

The purpose of the statistics is to show how the tax system affects corporate taxation. Among other things, the statistics give detailed information on taxable income, tax deductions, tax-related balances of depreciable assets, depreciation, and calculation of personal income for active owners of split-income enterprises etc. This information goes beyond the net-employment and taxes found in the Tax statistics for companies. The split-income model was abolished when the shareholder model was introduced in 2006 and, as from 2005, these data are not included in the statistics.

Income statistics for non-personal taxpayers (companies) were previously compiled every three years, with figures for fiscal years 1979, 1982, 1985 and 1988. Income and deductions for companies has been compiled annually since 1991. As of fiscal year 1993, the survey covered only limited companies, and starting with fiscal year 1997, it was further limited to non-financial limited companies. As of fiscal year 2012, the statistics include all non-personal taxpayers except fund and asset management and corporations which are assessed under the Petroleum Tax Act.

Major users are the Ministry of Finance and internal and external research institutes. The statistics are used to show the effect of changes in tax rules, revenue effects and general tax research. In addition, the statistics are used to analyze the rules for calculating personal income from business operations for active stockholders (the split-income model).

No external users have access to statistics before they are released at 8 a.m. on ssb.no after at least three months’ advance notice in the release calendar. This is one of the most important principles in Statistics Norway for ensuring the equal treatment of users.

Income and deductions for companies covers the same population as Accounting statistics for non-financial limited companies, except companies taxed in accordance the Petroleum Tax Act. The register-based accounts statistics include profit and loss account and balance sheet for non-financial sector limited companies, which are not covered by Income and deductions for companies.

Income and deductions for companies covers almost the same population as Tax statistics for non-personal taxpayers. The tax statistics are based on the Directorate of Taxes' register of non-personal taxation entities, and gives inter alia overall ordinary income.

The statistics are developed, produced and disseminated pursuant to Act no. 32 of 21 June 2019 relating to official statistics and Statistics Norway (the Statistics Act).

Not relevant

The population for Income statistics for limited companies (IFS) includes all limited companies that meet certain criteria. The criteria have changed over time. Activities taxed pursuant to the Petroleum Tax Act are not included in the population. A separate annual survey has been conducted for these companies since 1985 ( Income statistics for oil companies ).

As of fiscal year 1996, a new voluntary tax regime with special rules was established for shipping limited companies, for which a separate annual survey has been conducted from the same year ( Tax statistics for shipping companies ). These companies have therefore been kept out of the IFS population starting from 1996. Shipping limited companies that choose not to follow the special rules, and were therefore taxed as ordinary limited companies, were included in the IFS population.

In fiscal year 1997, new taxation rules for power plants (natural resource tax) were introduced, leading to the exclusion of power companies from the IFS population the same year. A separate survey has been annually conducted for these companies since 1997 ( Tax statistics for electric power stations ). The same fiscal year (1997), the IFS population was limited to enterprises not involved in financial activities. Companies such as commercial banks, mortgage companies, finance companies, insurance companies and the like were therefore kept out of the population.

From the IFS survey 1999, the population was further limited and all companies with main industry production and distribution of electricity were excluded.

As of fiscal year 2001, shipping limited companies taxed as an ordinary limited company were kept out of the population. In addition, companies involved in service activities incidental to oil and gas extraction were kept out of the population.

As of fiscal year 2006, the population includes all limited companies in non-financial sector, except companies belonging to crude oil- and natural gas extraction industry and companies taxed pursuant to the Petroleum Tax Act. This means that the population now includes shipping limited companies and companies with main industry production and distribution of electricity, as well as portfolio investments.

As of fiscal year 2008, the population includes Norwegian limited companies on Spitzbergen.

Compulsory electronic reporting of tax information was introduced for all businesses as of fiscal year 2015. The Directorate of Taxes also introduced a simplified reporting system for businesses with simple tax circumstances.

Income and tax deductions for companies is based on data from ordinary assessment of taxes for companies that have submitted tax data through The Business Tax Return (for businesses with simple tax circumstances) and companies that have submitted tax data electronically through The System for Tax Assessment of Businesses.The data are collected by the Directorate of Taxes.

The classification of industries and institutional sector is added from the Central Register of Establishments and Enterprises. Tax base is added from the Tax statistics for non-personal taxpayers. Share capital is added from the Central Coordinating Register for Legal Entities and accounting data from the Register of Company Accounts in Brønnøysund.

As of fiscal year 2012 the statistics comprises all companies submitting tax data electronically, and approximately 600 companies submitting tax data on paper. The statistics is considered as a full count.

Previous, the sample covered about 7 000 limited companies, of which about 3 000 are a total census, and about 4 000 are a sample. The total census includes all enterprises above specified limits respecting employment, share capital, ordinary income and operating result. All companies listed on the stock exchange and covered by the population are also included in the sample. A stratified sample is drawn among small and medium-sized enterprises. The sample is drawn on the basis of information from the register of non-personal taxation entities for the year before the survey year, plus a supplement of newly established limited companies (data from the Central Coordinating Register for Legal Entities) during the survey year. The sample is established with the intention of good representation in the various industries, with the exception of the financial industries, oil sector, power companies and shipping companies (which are covered by separate statistics). As of the survey for 2001 the sample is expanded with enterprises that have reported their taxation data electronically. These companies undergo the same revision and are included in the same estimation method as the initial sample. Examinations have been done to ensure that the expansion does not create unmanageable bias in the sample.

From the survey of 2003, data for 3 000 selected large companies are collected, and from the survey of 2006, data for only 1 000 selected large companies are collected. The rest of the sample is entirely based on electronically reported data.

Statistics Norway collects data from The Directorate of Taxes on companies reporting electronically. Statistics Norway previously identified large enterprises which had not reported electronically and sent the list of those enterprises to the country’s tax offices, which copied the enterprises’ relevant forms and sent to Statistic Norway.

Starting with the 1998 tax year, local taxation was abolished and all income of limited companies is taxed in the municipality where the company's main office is situated. Previously the tax office of the municipality in which the enterprise is domiciled had to coordinate the enquiry when the enterprise was taxed in several municipalities. Tax data from companies that choose to report electronically are collected from the Directorate of Taxes.

Information is obtained mainly for the enterprise. Information is also obtained for calculating personal income at the personal level in those cases where the enterprise is covered by split-income model rules.

A number of controls and corrections are undertaken to ensure consistency of individual forms, between main and supplementary forms and between register and form-based information.

The unit of analysis is the limited company (a non-personal taxation entity) and active stockholder (person). The sample is weighted and, if necessary, calibrated against known register figures. The estimation method is established to show the structure the given year and is not developed to give continuous time series. As of 2001, the sample has been expanded with electronically reported data. This has made it possible to take into account additional known characteristics of the population during the calculation of weights.

The statistics are estimated by counting all units with a certain characteristic, e.g. the number of split-income companies, and by adding up a certain characteristic for all units in the statistics, e.g. ordinary income.

Not relevant

Employees of Statistics Norway have a duty of confidentiality.

Statistics Norway does not publish figures if there is a risk of the respondent’s contribution being identified. This means that, as a general rule, figures are not published if fewer than three units form the basis of a cell in a table or if the contribution of one or two respondents constitutes a very large part of the cell total.

Statistics Norway can make exceptions to the general rule if deemed necessary to meet the requirements of the EEA agreement, if the respondent is a public authority, if the respondent has consented to this, or when the information disclosed is openly accessible to the public.

More information can be found on Statistics Norway’s website under Methods in official statistics, in the ‘Confidentiality’ section.

To ensure confidentiality, the suppression method is used in these statistics.

When comparing figures from various years, changes in industrial rankings and structural changes in the different industries can affect the figures.

Both the data basis and the principles of the statistics have been changed over time. The alterations that the tax system has undergone over the years are reflected in the data basis and influence the continuity of the time series. Changes in the scope of the population can affect the comparability of the figures over time. As of fiscal year 2004 new rules for taxation of income from shares were introduced. Dividends and gains on shares are tax free for corporate shareholders, and loss from realisation of shares no longer gives tax relief.

A new Accounting Act was introduced in 1999. This law might change underlying data of the assessed tax material. Also, the inclusion of the electronically reported material from 2001 can influence the comparability with earlier years. The expansion as of fiscal year 2006 will also influence the comparability.

Norwegian companies’ oil extraction abroad is taxed according to the ordinary tax rules for companies. Income from oil extraction in foreign countries is exempt from taxation with effect from the 2013 fiscal year, and expenses relating to the incomes cannot be deducted from taxable income. The changes in tax rules affect the statistics and comparability between 2012 and 2013.

The primary data are obtained from tax returns and tax return appendixes (depreciation form, form for calculating personal income, general trading statement, profit and loss account and form for specification of temporary differences). The forms can contain errors made by the individual taxpayer filling out the form. A number of the errors are discovered and corrected by the tax offices. Our control system uncovers errors when there are logical inconsistencies in the forms.

Errors of no practical significance for the actual tax assessment are frequently not corrected by the tax offices. A number of these errors are corrected in our control system to ensure the most uniform and consistent treatment possible.

Some errors made during the collecting and processing of the data are unavoidable and include coding, revision and data processing errors etc. Extensive efforts have been made to minimize these errors, and we regard these types of errors to be relatively insignificant.

Non-response in the survey is caused by limited companies that are no longer in business because of closure, merger or not assessed for other reasons. Non-response rates vary somewhat, but are between 5 and 10 per cent.

Variance

All sample surveys are associated with a certain degree of uncertainty. In general, the fewer observations the more uncertain the results. Groups based on relatively few observations will be influenced by extreme observations, i.e. observations that deviate considerably from the average. Extreme observations are therefore given a weight equal to 1, so that they only represent themselves in the material.

Bias

In drawing the sample, emphasis is placed on including large limited companies in the various industries in order to compile good macro statistics. Basically, the selection of the sample is thereby unbalanced at the outset because large companies are over-represented. Inclusion of all the companies that chose to electronically report their tax data can also introduce bias in the data material.

The quality of the register base for selecting the sample and the linked data from administrative registers also have an impact on the quality of the final result.

The published figures do not take into account that certain amounts can be changed at a later time due to complaints or that the tax authorities themselves discover errors. The statistics are among other things prepared on the basis of register information at a given point in time. Both the administrative and statistic registers are regularly updated, and will therefore change during the production process.

Not relevant