18th April 2018
Ragnhild Myren Stephansen - (Magnus Legal)
Moving to, or from Norway triggers many tax questions. The most common questions are related to Norwegian resident criteria and tax return obligations. MSI Norwegian law member Magnus Legal provides an overview.
Persons who are tax resident in Norway are liable to:
This means that all income and wealth generated outside Norway must be reported on the Norwegian tax return. The person is considered to be globally taxable to Norway.
Read more: A brief guide to your Norwegian tax return
Norwegian residency is first of all determined by the number of days spent in Norway. You will be considered a tax resident if you are present in Norway for more than 183 days in any 12-month period or more than 270 days during a 36-month period.
If you stay in Norway for more than 183 days during the year you move to Norway, you will be deemed tax resident from your first day in Norway. If the 183 days are split between two income years, you will become tax resident from 1 January the second year.
It is possible to be tax resident in more than one country and thereby applicable to pay tax to both countries on the same income/wealth. To avoid double taxation, The Act of Tax and tax treaties may entitle you to claim deductions for paid tax. The deduction must be claimed on your tax return and is done by filling in forms issued by the tax administrations, in example sheets RF 1147 and RF 1150.
Please notice that there are strict rules related to documentation.
Taxation of non-Norwegian residents can be found in the Act of Tax.
Also read: 5 tax deductions to claim in your Norwegian tax return
Moving from Norway does not necessarily mean that you are freed from all tax obligations to Norway.
You can be considered as a tax resident, even if you move from Norway.
The following criteria must be fulfilled, to end your Norwegian residency:
If you have lived in Norway less than 10 years before the income year in which you take up permanent residency abroad, your tax residence in Norway will cease in the income year in which all three of the above conditions are met.
Norwegian tax return: Commuting and commuter expenses
If you have lived in Norway for a total of 10 years or more before the income year in which you take up permanent residency abroad, your tax residence in Norway cannot cease until after the end of the third income year after the year in which you took up permanent residency abroad. This means that you will be obligated to report and pay tax to Norway on your global income/wealth the year of moving, and the 3 following years. If you moved abroad sometimes between 2014 and 2016, you will most likely be liable to submit a Norwegian tax return also for the income year 2017.
For your tax residence to cease, you must also meet the general three conditions mentioned above for each of the 3 income years.
If you fail to submit a tax return, your income will most likely be estimated by the tax authorities, and a penalty may be levied.
You are entitled to make changes in your tax return by filing a new tax return, but tax arrears based on the estimated figures must be paid within due date, and the refund will be paid back when the final tax assessment is ready. This process may take several months.
Please note that if you are no longer liable to report and pay tax to Norway, you will need to apply for emigration. An emigration application must be submitted to the Norwegian authorities.
Norway has entered into the Tax Information Exchange Agreement. The purpose of this agreement is to promote international co-operation in tax matters through exchange of information. The agreement gives the participants easy access to worldwide information about finance related to resident persons.
In late 2017 Norwegian authorities started to requested income, wealth and finance information from countries around the world to avoid tax evasion.
If you are considered to be Norwegian resident, it is essential to declare global economic information on your tax return. The tax authorities can start an investigation and gather necessary income- and wealth information from other countries. Penalty tax or fines may be levied if complete information is not reported.
If you have foreign income and/or wealth which you have not previously declared to the Norwegian Tax Administration, you can avoid additional tax by using the voluntary correction process (tax amnesty). The tax office can change tax assessments dating back ten years.
We are a multidisciplinary business law firm. Our 35 professionals have vast experience in assisting international and domestic clients in both advisory and litigation issues including tax controversy.
View firm profile
New headquarters for @MSI_Global in London. We recently moved our headquarters to 10 Queen Street Place at the Lon… https://t.co/sk8PY556yB
Register for our free webinar and international panel discussion on trading with the UK post Brexit. Leading accoun… https://t.co/EsDqZVlRYD
MSI's Portuguese member Moneris @RPA_Moneris launches new mobile app to help clients plan and manage #tax payments… https://t.co/yIYisFWqPm