Correction of tax on bonus shares
Overview of maximum and unclaimed tax-free benefit per year.
The tax-free amount is calculated at a certain percentage of the market value, capped at a maximum amount. The percentage rate and maximum amount have varied in the period 2017 to 2021, see columns A and B in the table below. Column D shows the unclaimed tax-free benefit and column E shows the market value that received bonus shares must have for you to receive the maximum tax-free benefit. These amounts assume that you received a maximum tax-free amount of NOK 1,500 per year when you purchased shares (column C).
You find examples of the calculation of unclaimed tax-free amounts below.
|2017||NOK 3,000||20%||NOK 1,500||NOK 1,500||NOK 7,500|
|2018||NOK 3,000||20%||NOK 1,500||NOK 1,500||NOK 7,500|
|2019||NOK 3,000||20%||NOK 1,500||NOK 1,500||NOK 7,500|
|2020||NOK 5,000||20%||NOK 1,500||NOK 3,500||NOK 17,500|
|2021||NOK 7,500||25%||NOK 1,500||NOK 6,000||NOK 24,000|
|Total||NOK 21,500||NOK 7,500||NOK 14,000*|
* Equinor has reported excess taxable benefits of up to NOK 14,000 in the period 2017 to 2021 for individual employees who were part of the share savings plan throughout the period. Depending on your tax rate, you may have paid around NOK 6,500 in excess tax for the entire 5-year period. You will get new tax assessment notices, and excess tax will be refunded.
Below are two examples for 2021. One example shows an employee who has received bonus shares that entitle to the maximum tax-free benefit, while the other example shows one who has received bonus shares that do not entitle to the maximum tax-free benefit.
In 2021, the tax-free discount on the shares could be 25% of the market value, but the maximum tax-free benefit was capped at NOK 7,500.
1) Maximum tax-free benefit
In 2021, employee A received bonus shares with a market value of NOK 50,000. The tax-free benefit amounts to 25% of the market value, however maximum NOK 7,500. She has already received NOK 1,500 in tax-free benefit in connection with the purchase of shares in 2021, and therefore has an unclaimed tax-free benefit of maximum NOK 6,000.
|- 25% of 50,000 = 12,500 (max benefit 7,500)||7,500|
|- claimed tax-free benefit||1,500|
|= Unclaimed tax-free benefit||6,000|
Equinor reports the new information to the Norwegian Tax Administration, reducing Employee A's income for 2021 by NOK 6,000. The Norwegian Tax Administration uses the new information as a basis for its calculations, and sends a new tax assessment notice to Employee A.
2) Below the maximum tax-free benefit
In 2021, employee B received bonus shares worth NOK 20,000. The tax-free benefit amounts to 25% of the market value, however maximum NOK 7,500. He has already a NOK 1,500 tax-free benefit in connection with the purchase of shares in 2021, and therefore had an unclaimed tax-free benefit of maximum NOK 6,000.
The tax-free benefit of the bonus shares amounts to NOK 5,000 (25% of NOK 20,000). Since he has an unclaimed tax-free benefit that exceeds this amount, Equinor reports new the information to the Norwegian Tax Adm., reducing Employee B’s income for 2021 by NOK 5,000. The Norwegian Tax Administration uses the new information as a basis for its calculations, and sends a new tax assessment notice to Employee B.
Questions and answers about correcting tax on bonus shares
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