Introduction
Tax value (formuesverdi), formerly known as ligningsverdi (assessed value), is an important concept for anyone who owns shares in, or runs, a Norwegian unlisted company, whether you're a founder, leader, or investor. In this article, we explain what tax value is, when and what you need it for, and how you, as an owner or company, should handle it now that the reporting deadline is coming up.
What we cover in this article:
- What is tax value?
- When do you need to know it?
- What is it used for?
- How do you find the tax value?
- What does this mean in practice for the company and the owners?
- How does Unlisted support this work?
What is tax value?
Tax value is the tax-assessed value of your shares as of 31 December. For listed shares, the value is pulled automatically by the Norwegian Tax Administration. For shares in unlisted companies, which are most startups and growth companies, the value has to be calculated and reported manually. Companies do this through their corporate tax return. The Tax Administration receives the tax value information from the company when they submit their tax return. You'll get a notification when updated tax values are available in your share statement (aksjeoppgave). These details can arrive either before or after the tax return filing deadline. The tax value is calculated based on different assessments of the accounts, and an accountant typically handles this as part of closing the company's annual accounts.
If you hold the shares as a private individual, the tax value will usually be pre-filled in your tax return, assuming the company has reported it correctly. If you hold the shares through a holding company, you may need to enter the tax value yourself, based on information from the companies you own (assuming you have access to it).
Remember: tax value is one part of your total wealth, which can also include property, bank deposits, and other assets.
When do you need to know the tax value?
Every year, companies need to report the Aksjeoppgave (shareholder statement) and tax return. The tax return also applies to most people living in Norway. If you have shares in unlisted companies, you need to make sure they're reported at the right value.
Tax value is reported each year as part of:
- Tax return for businesses and companies — deadline end of May
- Tax return for private individuals — deadline end of April
If your company has many shareholders, or if you've made capital changes during the past year, it becomes especially important to make sure everyone gets the same correct information in time.
What is tax value used for?
Tax value is mainly used for:
- Calculating wealth tax (formuesskatt) for the owners
- Reporting on the tax return
It's important to be aware that an overstated valuation can lead to unnecessarily high wealth tax. And you need to distinguish between market value and tax value (the tax-assessed value).
There are several methods for calculating tax value, but the most common ones follow the Tax Administration's templates for valuing unlisted shares. These typically start from the company's:
- Book values (balance sheet)
- Any adjustments for market conditions
Important for early-stage companies: don't use the company's market value from, for example, a funding round or an investor pitch deck, unless that aligns with the tax-assessment principles. A high valuation here can land the owners with an unrealistically high wealth tax.
Get in touch with your accountant or auditor to make sure the calculation is correct.
Practical implications
For the company
As CEO or someone with board responsibility, you need to make sure the tax value is correctly calculated and distributed to the shareholders. This can become time-consuming if you have a lot of owners.
If you don't handle it, shareholders may end up reporting the wrong numbers, or fielding unnecessary questions from the Tax Administration.
For owners
If you have shares in an unlisted company, you need to make sure the tax value is reported in your own tax return. If you haven't received it from the company, ask for it well before the deadline.
Tax value in Unlisted
If you use Unlisted to manage your ownership structure and shares, we make this process easy:
1. Go to the Valuation screen in the platform.
2. Enter the tax value per share.
3. Select Notify shareholders by email to send the information out automatically.
4. If shareholders have access to the Unlisted portal (via the Stakeholders page), they'll also be able to see their tax value there.
Need help?
Questions about how to enter or send out tax values in Unlisted? We're happy to help. Get in touch at [email protected].