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Small growth in entrepreneurial income
statistikk
2016-12-08T08:00:00.000Z
Income and consumption;Income and consumption
en
ifpn, Income, self-employed, income from self-employment, capital income, wages, sole proprietorship, deductions, profit and loss account, tax, independent professions (for example dentists, solicitors, physiotherapists), farmersIncome and wealth, Personal tax, Income and consumption
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Income, self-employed

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Key figures

538

thousand NOK – average entrepreneurial income for self-employed

Income for self-employed, by main income. Average NOK
2015
TotalIndustryWages and public pensions
Number of self-employed (persons)331 868132 754199 114
 
Gross income (NOK)646 500690 600617 100
Entreprenurial income (NOK)248 500538 00055 500
Wages and public pensions313 70061 900481 500
Capital income (NOK)73 20071 60074 200
 
Assessed taxes (NOK)189 900228 000164 500

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Table 1 
Income and deductions for self-employed, by main income. Average NOK

Income and deductions for self-employed, by main income. Average NOK
2015
TotalIndustryWages and public pensions
1Negative amounts have been set to zero from 2014
Gross income (NOK)646 500690 600617 100
Personal income wages and public pension (NOK)313 70061 900481 500
Entreprenurial income (NOK)248 500538 00055 500
Capital income (NOK)73 20071 60074 200
 
Deductions, total (NOK)162 400152 400169 100
Agriculture deduction (NOK)10 20017 9005 100
Entreprenurial deficit (NOK)13 00011 90013 700
Previous year's entreprenurial deficit (NOK)12 30020 3006 900
Interest paid (NOK)46 40054 50041 000
 
Ordinary income after special deduction (NOK)1508 300590 700453 300
 
Personal income (NOK)528 200528 900527 800
Personal income from wages and public pension (NOK)313 70061 900481 500
Personal income from industry (NOK)214 600467 10046 200
 
Assessed taxes (NOK)189 900228 000164 500
 
Number of self-employed (persons)331 868132 754199 114

Table 2 
Income statement for sole proprietors with main income from entreprenurial activity, selected industries. Average NOK.

Income statement for sole proprietors with main income from entreprenurial activity, selected industries. Average NOK.
2015
All industriesPrimary industry, totalElectrical installationPlumbing, heat and air-conditioning installationJoinery installationPaintingWholesale and retail trade: repair of motor vehicles and motorcyclesMedical practice activities
Operating income1 290 0001 707 4001 263 8001 561 900943 400913 3002 271 7001 984 600
Sales income1 076 9001 309 6001 250 5001 535 200916 900906 4002 134 300860 300
Income from rent37 30087 9007 8009 9007 2001 90017 80012 700
 
Operating expenses794 7001 285 900691 900970 300517 600486 2001 871 100736 000
Raw materials and consumables used260 700470 300339 200554 700214 000144 6001 263 10022 900
Wages and social expenses111 60094 10098 00085 20064 800118 200206 50077 300
Houserent, landrent, electric lighting, heating71 50033 50032 10036 40018 50019 400101 700386 300
Rented fixed durable assets, tools and equipment32 10076 90010 10018 3009 7008 60014 10030 700
Car expenses41 50027 10036 50046 60028 20027 10023 3003 400
Maintenace/costs of repairs38 600132 1008 40010 5008 2002 40016 0003 500
Depreciation56 900149 70024 40029 00022 60014 20027 10033 800
 
Operating profit495 200421 500571 900591 600425 800427 100400 6001 248 600
 
Number of observations103 89122 2264186332 9301 1135 8304 320

Table 3 
Income statement for sole proprietors by main income. Average NOK.

Income statement for sole proprietors by main income. Average NOK.
2015
TotalIndustryWages and public pensions
Operating income705 0001 290 000241 800
Sales income577 9001 076 900182 800
Income from rent27 30037 30019 500
 
Operating expenses459 300794 700193 700
Raw materials and consumables used144 600260 70052 700
Wages and social expenses56 300111 60012 600
Houserent, landrent, electric lighting, heating40 70071 50016 400
Rented fixed durable assets, tools and equipment18 20032 1007 100
Car expenses23 10041 5008 500
Maintenace/costs of repairs26 80038 60017 500
Depreciation37 00056 90021 200
 
Operating profit245 700495 20048 100
 
Number of observations235 104103 891131 213

About the statistics

Tax statistics for the self-employed list income, deductions and taxes split by whether the source of main income is self-employment or wages/pensions. It also summarizes the income statement for self-employed in sole proprietorships. The data is collected from the Directorate of Taxes in Norway.

Definitions

Definitions of the main concepts and variables

Company model

was inducted from 01.01.2006 and replaces the split-income model. The model is the rules for taxing profit that exceed a free-risk return.

Entrepreneurial income

is a result of the activities of the self-employed person, and is estimated from profit and loss account and balance sheet. Entrepreneurial income is transferred to the tax return and is included in the calculation of ordinary income.

Agriculture deduction

was introduced in 2000 as a deduction from positive entrepreneurial income from farming, market gardening and fur-bearing animal activities. The deduction is associated with the operating unit.

Taxable ordinary income after special deductions

can be defined as the sum of wages, capital income and entrepreneurial income less interest on debt, and different income deductions. Ordinary income after special deductions is the basis for assessing income tax.

Personal income

is a description of income from work personally performed by employees or self-employed persons. Personal income of employed persons is taxable earned income and pensions. Personal income of self-employed persons is an estimated personal income calculated on the basis of the entrepreneurial income from the business corrected for capital items, deductions for calculated capital yield, deduction for wages and salaries and negative personal income. Personal income makes up the basis for calculating the national insurance contribution and surtax.

Assessed taxes

include property and income taxes of municipalities, counties and the central government as well as members' contributions to the National Insurance Scheme after all deductions and reductions in taxes have been deducted.

Risk-free return

is used to reduce personal income. The risk-free return is computed by multiplying the net value of the business assets by a risk-free rate.

Deduction for wages and salaries

Calculated personal income is reduced with a deduction for wages and salaries if wage earners are employed by the business. The deduction for wages and salaries cannot bring the calculated personal income and wages from the enterprise for each active stockholder below a limit set annually, nor can it bring calculated personal income below nil or increase the negative estimated personal income. The deduction is eliminated from 2012.

Utilised negative personal income from previous years

Negative personal income can be carried forward, and is deducted from positive estimated personal income in subsequent years.

A self-employed person

is defined as a person who conducts business at his own account and risk, and is required to document entrepreneurial income as an addition to the tax return form.

The business (enterprise)

of a self-employed person must be clearly separated from the self-employed person as an individual. A self-employed person can operate one or more businesses (enterprises), and a business can be operated by one or more self-employed persons (co-ownership/joint operation/general partnership). The statistics provide statistics on both self-employed persons and their business activities.

Type of main income

indicates what type of income provides the biggest contribution to the self-employed person's total income. The type of main income is not influenced by the working hours of the self-employed person or wage earner. If the largest portion of a self-employed person's income is received from wages and pensions, his/her type of main income is wages and pensions.

The split-income model

is the rules for calculating personal income from business. The split-income model is used for self-employed persons and active shareholders of joint-stock companies. Persons who are participants in participant taxed companies (general partnerships, limited partnership and so on), are covered by the split-income model. In brief, the model splits an enterprise's income into two parts, capital income and personal income. The model was replaced by the company model from 01.01.2006.

Capital yield basis

is a net valuation of the assets of a business. The value of the assets can be set according to various principles, including tax-related value and accounting value. The portion of the income attributed to return on invested capital is calculated from the capital return basis. The calculation is done with a capital return rate adopted for each income year. The remaining income is characterized as calculated personal income (see above).

Standard classifications

Industry is mainly defined by the industry of the enterprise of the self-employed/participant as registered by Statistics Norway's Central Register of Establishments and Enterprises. The industry groups can be found from the Standard Industrial Classification or Standard Industrial Classification (SIC2007) in STABAS

Administrative information

Name and topic

Name: Income, self-employed
Topic: Income and consumption

Next release

Responsible division

Division for Income and Wage Statistics

Regional level

National level

Frequency and timeliness

Frequency: Annual

Timeliness: The statistics is published about 50 weeks after reference year.

International reporting

Not relevant.

Microdata

Statistics files with data from tax returns, depreciation forms, forms for calculating personal income, profit and loss account, and general trading statements that have been through the linking and estimation programs are stored.

Background

Background and purpose

The survey shows the effect of the tax system on self-employed persons. The statistics give information on self-employed persons' income and costs from the ordinary tax assessment, which are the basis for calculating the taxable revenues. These include operating income and operating costs from the general trading statement, information on depreciation and depreciation basis from depreciation forms and information on the basis for personal income and capital yields from personal income forms.

The income and property survey for self-employed persons has been conducted annually since fiscal year 1991 for the Ministry of Finance.

Users and applications

Major users are the Ministry of Finance and the research activities in Statistics Norway. Data from the survey are included in tax models and are used for tax research, distribution analyses and various analyses of the split-income model. In addition, the data are used in the national accounts on business activities in the household sector.

Equal treatment of users

No external users have access to the statistics and analyses before they are published and accessible simultaneously for all users on ssb.no at 8 am. Prior to this, a minimum of three months' advance notice is given in the Statistics Release Calendar. This is one of Statistics Norway’s key principles for ensuring that all users are treated equally.

Coherence with other statistics

The statistics are related to the Tax Statistics for Personal Taxpayers.

Legal authority

Statistics Act § 2-1, 3-2.

EEA reference

Not relevant.

Production

Population

The population is all physical persons who operate businesses at their own account and risk. The tax return statistics define the population as all persons with entrepreneurial income, entrepreneurial deficits and/or estimated personal income from such business activities, regardless of the size of the entrepreneurial income/loss and the ratio between entrepreneurial income/deficit and other income. The unit of analysis is sole proprietorship (business) and self-employed person.

From the income year 2004 the tables include residents age 17 years or older.

Data sources and sampling

The statistics is based on information from ordinary tax assessment. The data is obtained from the tax offices in the form of copies of tax returns, depreciation forms and forms for calculating personal income for self-employed persons. The classification of industries is based on information from the business register.

From the income year 2009 self-employed persons with operating income under NOK 50 000 are exempt from reporting trading statement.

The sample consists as of income year 2003 of all self-employed persons who has delivered their tax assessment electronically through Altinn.

Mandatory electronic submission of income statement as of 2015

From 2015 onwards, all self-employed must submit their tax information electronically. At the same time, the Directorate of Taxes has launched a simplified reporting solution for self-employed with simple tax relations.

Income statistics for self-employed has until then been a sample survey in which electronically submitted income statements were weighted to give numbers on self-employed in sole proprietorships. Since from this year on we had access to all submitted income statements electronically, the income statement consisted of a full count, with the exception of those with no obligation to dispatch an income statement due to low annual turnover. This change resulted in a minor disruption of the time series, and complicates direct comparisons with previous years. For example, this year there was a considerable increase of over 10 per cent in the number of submitted income statements within arts, entertainment and recreation, education and information and communication.

 

Collection of data, editing and estimations

The data is collected electronically from the Directorate of Taxes. There has been a change in how these data are organized, taking affect from 01.01.2009. This may have influenced the comparability with previous years.

A number of checks and corrections are made to ensure consistency both within a single form, between the main form and the supplementary form and between the tax return data and trading statements. The main part of the checks and revisions are done by automatic procedures.

The sample is weighted (until 2015 figures, see below), and stratified by the industry and the source of the main income (entrepreneurial income or wages and pensions) of the self-employed person. The calculation of weights is detailed in Notater 2001/66: Oddbjørn Haugen, Utrekning av vekter til inntekts- og formuesundersøkingane 1999 (in Norwegian only).

Most of the amounts are estimated at a personal level. Relevant items from the depreciation forms are aggregated at business level, even though parts of the amounts is a part of the husband's/wife's taxable amount.

Seasonal adjustment

Not relevant

Confidentiality

Not relevant

Comparability over time and space

The statistics is comparable from 1993 to 2002. There have been minor changes in the tax rules for this period, which have influenced the basis and therefore the continuity of the statistics. There were major changes in the forms documenting the self-employed tax assessment in 2003. Self-employed within primary industries were, for example, obliged to deliver separate depreciation forms. As of 2003, all self-employed delivered the same type of depreciation forms, and only one form per person. Several items were shifted to new forms. There were also changes in Statistics Norway's data collection process. Previously, data was collected for a sample of 5 000 self-employed. As of 2003 all self-employed who delivered data by Altinn were included in the data (almost 100 000 self-employed in 2003). As of 2004 transport and communication was split from independent occupations. Also self-employed without industry were not included in independent occupations. From 2012 the social security contribution in primary industries was altered to the same rate as other industries. Therefore it is from 2012 only possible to split type of main income in two: main income from wages and pensions or main income from self-employment.

Accuracy and reliability

Sources of error and uncertainty

The primary data are obtained from tax returns and tax return appendices (depreciation forms, forms for calculating personal income, general trading statements, profit and loss accounts and forms for specification of temporary differences). They 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 checks uncovers errors when there are logical errors in the forms.

Errors of no practical importance to the tax assessment are frequently not corrected by the tax offices. A number of these errors are corrected by our checks to ensure the most uniform and consistent treatment.

A number of errors in collecting and processing the data are unavoidable. Examples include coding errors, revision errors, data processing errors etc.

Non-response in the survey is caused by inconsistency within the data or absence of important data. Non-response rates are below one per cent.

Variance All sample surveys are associated with uncertainty. In general; the fewer the observations, the less certain the results. Groups with relatively few observations will be very highly influenced by extreme observations, i.e. observations that deviate greatly from the average. Having a full count as of income year 2015, this source of error is eliminated.

Bias The sample includes all self-employed persons delivering their tax assessment by Altinn. Bias among those delivering electronically will give bias in the sample. Having a full count as of income year 2015, this source of error is eliminated.

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

Publishing of this statistics is based on data obtained late in the autumn after the tax assessment is made public and a fair number of tax-related complaints from taxpayers have been dealt with. The published figures do not take into account that some amounts can be changed at a later time due to complaints or that the tax authorities themselves discover errors.

Revision

Not relevant

Contact

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