Carrying out agriculture activity
When you’re engaged in agriculture as a business activity, you have certain obligations and tasks you must do to ensure you pay correct tax and duties. Read on to learn more about this.
Does this apply to me?
Agriculture is an activity that produces food or animal feed by the use of land and/or through animal husbandry. Agriculture can be:
- the growing of grain, animal feed, vegetables, fruit and berries
- animal husbandry, including breeding and rearing connected to agriculture when the goal is to produce and sell your own products
The information on this page applies to you if you engage in agriculture as a business activity. Am I running a business?
What you need to do
Tax deduction cards and advance tax
Check your tax deduction card and remember to pay advance tax.
Value added tax
If you’re registered in the VAT Register, you must submit VAT returns.
Accounting
Keep accounts throughout the entire year. Your accounts must be updated with all your income and the expenses you’ve had.
- The sale of products and goods such as milk, slaughtered animals, live animals, vegetables, potatoes and similar.
- Subsidies you’ve received from the government and similar.
- Compensation following damage to crops, machinery, animals or the like that you’ve received in connection with the business.
- The sale of fixed assets, such as tractors or other machinery.
- The renting out of one or two holiday homes on the farm. The renting out of three or more holiday homes is usually considered a separate business activity.
The value of goods and animals in agriculture activity is set by the valuation rules (in Norwegian only). Changes to your stock will have an impact on your income.
If you have income from other activities related to the farm, you must state these in the tax return. They are not to be included as part of the agriculture activity when you complete the business information.
Other activities can be:
- the sale of soil, sand, stone and peat
- the collection of berries, cones, moss, kelp and similar
- income from the renting out of residential properties, agricultural buildings, hunting and fishing rights, milk quotas, grazing rights, rights of way and similar
- income from the production of biofuel or firewood
If you use the farm’s machinery, tools or assets in carrying out assignments for others, there are limits on how much you can use these before it will be considered a separate business activity.
Expenses are things you buy or rent that are necessary to running your agriculture business. This could, for example, be animal feed, fertiliser, fuel for machinery, maintenance and the like.
You’ll receive deductions for buying machinery and equipment that costs more than NOK 15,000 (NOK 30,000 in 2024). If they cost NOK 15,000 or more (NOK 30,000 in 2024) and have an expected lifetime of more than 3 years, they must be capitalised and depreciated in the accounts.
If you have a ditch that needs repairing, this will be considered maintenance and must be stated as an expense in your business. The same applies if you have a piped ditch that you convert into an open ditch.
Expenses for new ditches must be capitalised and depreciated in balance group h. The same applies if you have a ditch you intend to pipe.
When buying a farm, the value of ditches are calculated as part of the value of the land. This means that a new owner cannot capitalise and depreciate the value of the ditches.
The tax return
You must submit the tax return with the business information by 31 May at the latest.
Your accounts are the basis for completing the business information. You must state all the income and expenses you have in the business. You’ll receive deductions for expenses.
If you run an agriculture, gardening centre or horticulture business, you may receive a special allowance for agriculture.
Profits
If two spouses run an agricultural business together, they can divide the profits. Both spouses must work in the agricultural business but they do not both have to own the business.
If only one of the spouses works in the agricultural business, the entire profit must be entered in that spouse’s tax return.
If both spouses work in the agricultural business, they can divide the profits between themselves based on their own work efforts.
Losses
Losses must be allocated to the owner of the agricultural business. If both spouses are listed as responsible owners, the loss must be divided in accordance with the ownership interest in the business.
If you have a sole proprietorship, you must calculate and state personal income for your business.
Specific information if you
Agritourism is tourism where the farm’s resources are used, such as the farm’s buildings, animals, nature and similar. The farm may be a farm that’s open to visitors, a farm that offers accommodation, food services, or activities.
Green care is the term for services and activities offered by the farm, in collaboration with the public sector, for health, rehabilitation, training and similar.
Income amounting to less than NOK 30,000 will be considered part of the farm’s usual business activity and will form part of the farm’s accounting. If the income amounts to NOK 30,000 or more, it will be considered a separate business activity. Then it must have its own accounts, because the tax must be calculated differently for this than for the rest of the agricultural business.
If you have both agritourism and green care on the same farm, the limit is NOK 30,000 in total, this means for the total amount of turnover.
If you run another business in connection to the agricultural business, this will be part of the agricultural business if the turnover is NOK 30,000 or less.
If the turnover is more than NOK 30,000, this will be considered a separate business. If the other business is not connected to the agricultural business, it’ll be considered a separate business regardless of the turnover.
You must then keep separate accounts for this. If you have joint expenses for both businesses, the expenses must be divided according to the turnover for the businesses. For example, two businesses may be run from the same agricultural building. Then joint expenses such as insurance, maintenance, electricity and the like must be divided between the different businesses according to turnover.
Example
You run an agricultural business and grow apples to make cider. You sell the cider for more than NOK 30,000 a year and use the same agricultural building for both the agricultural business and the cider production. You must then divide the expenses connected to the agricultural building between the two businesses according to turnover.
The agricultural business has a turnover of NOK 400,000. The cider production has a turnover of NOK 100,000. The total turnover is NOK 500,000. The agricultural business amounts to 4/5 of the total turnover, or 80%, whereas the cider production amounts to 1/5 of the total turnover, or 20%.
The agricultural building has expenses connected to maintenance, electricity and insurance amounting to NOK 50,000. You must divide the expenses according to the turnover, which means 4/5, or NOK 40,000, on the agricultural business and 1/5, or NOK 10,000, on the cider production.
When you buy milk quotas, you’ll not receive deductions for the purchase price. The purchase price must be entered in the accounts as an asset in the business until you sell the milk quota.
If you sell at a profit, this will be taxable income. If you sell at a loss, this will entitle you to a deduction.
You’ll receive deductions for expenses in connection with buying a sheep dog. If the sheep dog costs NOK 30,000 (2024) or more, the expense must be depreciated in balance group d.
You’ll also receive a deduction for expenses related to feed for the sheep dog. The expense must be set to NOK 2,700 each year (the rate for 2023). If you can prove that the expense is higher, you can use the actual cost.
Any sale of puppies is taxable income.
If you use the farm’s machinery, tools or assets in carrying out assignments for others, this is considered part of the farm’s income. It could, for example, be that you use the farm’s tractor and mower to mow someone else’s land.
If more than 40 percent of the property’s total use is in carrying out assignments for others, this will be considered a separate business.
The value of your own work on buildings and other depreciable fixed assets in agriculture is not considered income. Nor must the value of work you perform yourself be included in the value of the fixed asset.