Accountant for a sole proprietorship (ENK)
A Norwegian sole proprietorship has simpler accounting rules than a limited company, but that does not mean you should face tax, VAT and the business specification on your own. Greenleaf helps sole proprietorships across Norway with ongoing bookkeeping, VAT returns and the tax return – at a price that matches the size of the business.
What does a sole proprietorship actually need?
The requirements are lighter than for a limited company, and many owners can keep the books themselves in a simple system. The need for help does not follow turnover – there is no threshold where it suddenly «pays off». It follows complexity: VAT, employees, stock, a vehicle used in the business, imports or exports, larger investments and compound deductions. A consultant with 20 invoices a year can have a simpler set of accounts than an online shop with far lower turnover.
VAT and the sole proprietorship
The threshold is 50,000 NOK in VAT-liable turnover and withdrawals over any twelve-month period – not the calendar year. Past it, the business must be entered in the VAT Register, and you can deduct input VAT on purchases made for the registered activity. Most file every two months. Small businesses can apply for annual filing, but that does not follow automatically from low turnover – there are conditions and an application deadline.
Tax – what you should know
You are taxed on the profit, not on what you take out. Moving money from the business account to your private account is a drawing – not salary, and not a cost. Tax is calculated on the result, and personal income from the business is calculated on top as the basis for national insurance contributions and bracket tax. No tax is withheld automatically. You state your expected profit on the tax deduction card, and advance tax falls due in four equal instalments: 15 March, 15 June, 15 September and 15 December. Miss one instalment and the whole year's advance tax falls due.
When should a sole proprietorship become an AS?
There is no profit threshold at which it automatically should. The choice depends on how much of the profit you need privately, the risk in the business, whether you need employees or investors, differences in social security rights, how profit is to be reinvested, and any plans to sell or grow. A limited company lets you keep profit in the company after corporate tax rather than taking it all into personal taxation the same year. But it has to be worked out for the specific case.
Frequently asked questions
What does an accountant cost for a sole proprietorship?
Ongoing bookkeeping starts at 1 100 NOK per month for simple businesses, and the price follows the number of documents. The year-end close comes in addition, from 5 000 NOK per year.
Do I have to use an accountant?
No. The law does not require a sole proprietorship to use an external accountant, and you do not need to be a state-authorised accountant to keep the books in your own business. The approval requirement applies when someone keeps accounts for others as a business. But the business specification and the VAT returns are often reason enough.
What is the difference between bookkeeping and accounting obligations?
A bookkeeping obligation means transactions must be documented and recorded. An accounting obligation under the Accounting Act is something else, and most small sole proprietorships do not have one. It arises only at assets above 20 million NOK or an average of more than 20 full-time equivalents, and the threshold normally has to be passed two years running. It does not follow turnover.
Can I convert from a sole proprietorship to an AS?
Yes, through a conversion without immediate taxation under section 11-20 of the Taxation Act. It requires a newly formed company and tax continuity, and the deadlines are tight if the conversion is to take effect from 1 January of the same year. We handle the whole process – formation, transfer of assets, the register changes and the start-up in the new system.
Need an accountant for your sole proprietorship?
Send a short description of what you do, and you will get a firm quote scaled to the size of the business.
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