In Norway, we often give gifts to employees at Christmas. It is a lovely tradition that helps to create good bonds between employer and employee. The main rule is that this is taxable income for the employee. However, there are exceptions, and it is vital to know the rules for tax exemptions.
The most important thing is to know the current annual amount limit for tax-free gifts. Starting from January 2021, the yearly amount limit for tax-free gifts has been NOK 5 000 per employee. It must be something other than a monetary amount, but gift cards that employees cannot exchange for money are accepted. The employer is free to choose what a Christmas present can be. Also, benefits such as electronic communication or a free car can be given as a tax-free gift as long as it is within the NOK 5 000 limit.
Tax-free gifts don’t need reporting. The excess must be taxed as salary if the value exceeds the tax-free amount limits. If the gift is an amount of money, it is a taxable cash benefit.
If you want to know more about the regulations surrounding gifts to employees, you can read about them here: