Global Daily Tax News, Norwegian Budget Sounds Death Knell On EV Tax Perks, (Oct 22, 2025)

Norway has announced plans to phase out value-added tax concessions for electric vehicles, in its 2026 Budget.

The Government has announced that VAT zero-rated treatment for electric vehicle sales will be phased out from 2027, as practically all new passenger vehicles acquired in Norway are electric vehicles. From 2026, zero-rated treatment will apply to vehicles sales up to NOK300,000 (USD29,825), down from NOK500,000 currently.

The Government said, "The phasing out of EV benefits will give us the opportunity to reduce other taxes and levies, which is aligned with the Government's tax pledge that if any taxes are increased others will be reduced."

The Budget also announces that carbon taxes will be increased by 14 percent, as part of gradual plans to establish a NOK2,400 rate per tonne of CO2 by 2030. The Government has also newly announced a commitment to raise this rate to NOK3,400 per tonne of CO2 by 2035.

The Budget features personal tax reliefs, with the Government allocating NOK4bn to increase the personal allowance and reduce social security levies on wages, benefits, and business income.

Finally, the Budget includes proposals to address loopholes in the tax system. Namely, it proposes to remove the ability of financial institutions with operations abroad to obtain interest deductions twice and to close a loophole in the VAT rules for international traded services. Further, a tax loophole in the property sector where capital gains taxation can be evaded through targeted tax planning is also being closed, the Government said.