Can I Deduct a Car in a Norwegian Company?

Good day, I run a business in Norway and use a car for business purposes - driving to clients, picking up materials, and so on. Can I put the car into company costs and deduct MVA?

A car can generate significant costs: fuel, leasing, servicing, insurance, road fees, parking, purchase, and depreciation.

So we explain how a car is accounted for in a Norwegian business, when mileage allowance applies, when a car becomes a business fixed asset, and how private use of a car is treated.

We also explain the difference between a tax-deductible expense and an MVA deduction, because for cars these rules often lead to different results.

What car deduction means in Norway

With a company car, you need to separate two different types of accounting:

A tax expense follows the rules on business expenses. We covered this in more detail in the article What can I put as a company expense in Norway?. With a car, however, additional rules apply, especially when the car is also used privately.

Important distinction: driving between home and a fixed workplace is generally considered private driving, not business driving. If you drive from home to a permanent workshop, office, or warehouse, that trip is usually not considered a business trip. A trip to a client, to a construction site, to a business meeting, or to collect materials needed for an assignment is treated differently.

ENK: three ways to account for a car

In an enkeltpersonforetak (sole proprietorship, ENK), the way you account for a car depends on whether the car is treated as a privatbil (a private car used in the business), or as a yrkesbil or næringsbil (a business car used in the business).

Private car in ENK under 6,000 km

If you use your own private car in the business and business trips amount to less than 6,000 km per year, you do not account for fuel, repairs, insurance, or depreciation as separate car expenses. Instead, you use mileage allowance: NOK 3.50/km in 2026.

Example: in 2026 you drove your private car 4,200 km to clients and assignments. The business expense is 4,200 km x NOK 3.50 = NOK 14,700.

You need a kjørebok (driving log) for this. Each business trip should include:

• date,
• route from and to,
• purpose of the trip,
• number of kilometers.

Car used only for business in ENK

If the car is used exclusively in the business, you treat it as a yrkesbil. Then you deduct the actual costs of owning and using the car, for example:

• fuel or charging,
• insurance,
• servicing and repairs,
• road fees,
• parking related to the business,
• leasing or depreciation of the purchase.

The purchase of a car is usually not expensed all at once. A car is a fixed asset, so you account for it through saldoavskrivning (declining balance depreciation, meaning annual write-offs based on the decreasing tax value).

Business car in ENK also used privately

If a car in ENK meets the conditions for a yrkesbil but is also used privately, you need to make a tilbakeføring (cost adjustment for private use). Simply put: the business records the car expenses, and then part of those costs is removed from the accounts because it relates to private use.

The adjustment amount for private use cannot exceed 75% of the calculated total car operating costs. These costs include, among other things, fuel, insurance, servicing, fees, and the drop in value of the car or leasing costs.

AS: company car, firmabil, and owner-employee

In an aksjeselskap (AS company), a car bought or leased by the company is part of the company’s business assets. The company records the car expenses if the vehicle is used in the business. If an employee or owner-employee has the car available for private use, this becomes a company car used privately and creates a taxable benefit.

Such a benefit is a naturalytelse (a benefit in kind, meaning compensation other than money). It must be reported in the a-melding (monthly payroll report to Norwegian authorities). This a-melding includes, among other things, income, advance tax, employment, and arbeidsgiveravgift (employer’s national insurance contribution).

In 2026, the standard annual value of private use of a company car is:

If the car was available only for part of the year, the benefit is calculated proportionally for each full and started month during which the car was available.

There are also reductions in the calculation basis:

Private use is not taxed as a firmabil if it is occasional: less than 10 days in the tax year and in total less than 1,000 km in the tax year. Both conditions must be met.

If you are still choosing a business form, also see ENK or AS - which business form should you choose in Norway?, because the car is one of the factors affecting the practical differences between these forms.

MVA, depreciation, and documents

MVA deduction for cars works differently from ordinary tax expenses. To deduct inngående mva (input VAT on purchases), the company must be registered in the Merverdiavgiftsregisteret (VAT register).

Taxable sales exceeding NOK 50,000 excluding VAT within 12 months trigger the obligation to register. We described the threshold itself in the article VAT register registration - when is it required, what does it give you?

Registration for MVA does not automatically mean the right to deduct VAT on a car. Special restrictions for vehicles apply under merverdiavgiftsloven chapter 8.

Varebil klasse 2 (a van with the appropriate technical classification) often gives more favorable tax results than a regular passenger car, but it requires a real business need and good documentation. For private use by an employee in 2026, you may encounter, among other things, the standard method with a reduction of the list price by 50%, capped at NOK 150,000, or the mileage method with a rate of NOK 3.40/km of private use, if the conditions for that method are met.

Tax depreciation of a car depends on the asset group:

Documents worth keeping for a company car:

• invoices for purchase, leasing, fuel, servicing, insurance, and fees,
• proof of payment,
• the leasing agreement, if the car is leased,
• kjørebok for business and private trips,
• mileage allowance or private use calculations,
• the basis for MVA allocation, if the vehicle gives partial right to VAT deduction.

Record car costs as they arise and describe them so it is clear what they relate to. If you use accounting software (e.g. Efirma.no), keep invoices and attachments together with the booking. In the skattemelding (tax return) for a business, the filing deadline is 31 May each year.

FAQ - frequently asked questions

Summary

• In ENK, with a private car and business trips below 6,000 km per year, you use mileage allowance of NOK 3.50/km in 2026.
• A company car used exclusively in the business allows you to deduct actual costs and depreciation, but private use requires an adjustment or taxation.
• In AS, a company car can be a cost, but private use by an employee or owner-employee must be reported as a taxable benefit.
• MVA deduction for passenger cars is heavily restricted. Varebil klasse 2 may give the right to a deduction, but only to the extent of use in MVA-taxable business.

If you need help deducting a car in a Norwegian company, call us at: +47 21 38 38 21. We help organize car costs, MVA, and the car documentation in your company.

Article author: Marcin - marcin@efirma.no