Unlimited tax liability
The significance of being resident in Norway for tax purposes
If you are resident in Norway for tax purposes, you will be liable to pay tax to Norway on all assets and income, whether located or earned in Norway or abroad. Tax agreements with other countries may limit your taxes to Norway.
Most of the tax treaties between Norway and other countries apply to taxes on both income and capital. However, i.a. the Nordic Tax Treaty only applies to taxes on income. This implies that you have to pay Norwegian wealth tax on all your assets when you are tax resident in Norway according to domestic legislation. This applies even though you live in another Nordic country.
As from 2019, there are new rules on taxation of salary for work carried out in Norway. Most people who come to Norway to work must pay tax with a flat rate of 25 per cent of the gross salary income. If you are not insured in the Norwegian National Insurance scheme (the social security scheme) the tax rate is 16.8 per cent. Your tax is finally settled when the tax is deducted and reported to the tax administration by your employer. You may not claim any deductions.
You may choose to pay tax according to the general rules for your entire salaryy income instead of with a flat tax rate. If you have salary income above NOK 639.750 or other taxable income in Norway such as business income, you must always pay tax according to the general rules. The same applies if you have capital income above a certain amount.
This applies as long as you are subject to limited tax liability and in the first year you meet the conditions of tax residence.
For more information about the new rules, see skatteetaten.no/paye.
Residence for tax purposes when moving to Norway
Persons staying for one or several periods in Norway for more than 183 days during a 12-month period will be considered as tax resident in Norway. The same applies to persons staying in Norway for one or several periods for more than 270 days in the course of a 36-month period. Every whole or part of a calendar day of stay in Norway is included when calculating the number of days.
If you stay in Norway for more than 183 days during the year you moved to Norway, you are resident for tax purposes from the first day of your stay in Norway. If the 183 days are divided between two income years, you will become a tax resident from 1 January in the second year. (You will have limited tax liability the preceding year. This means that you are only liable to pay tax on certain income linked to Norway.)
If you stay in Norway for more than 270 days in the course of a 36-month period, you will be resident for tax purposes from 1 January in the year when your stay exceeds 270 days. (You will have limited tax liability the preceding year/s.)
When does tax residence cease when moving from Norway?
Only persons who take up habitual residence abroad are considered as having moved from Norway for tax purposes. A temporary stay abroad does not terminate your tax residence in Norway.
For tax residence in Norway to cease when you move abroad, you must document
- That you have taken up habitual residence abroad,
- That you have not stayed in Norway for one or more periods exceeding 61 days in the income year, and
- That you or a closely related person (spouse, cohabitant, children under age) do not have a house/flat available in Norway.
If your have lived for less than 10 years in Norway before the income year in which you take up habitual residence abroad, your tax residence in Norway will cease during the income year when all of the three above requirements are met.
If you have lived in Norway for a total of 10 years or more before the income year in which you take up habitual residence abroad, your tax residence in Norway will only cease after the end of the third income year after the year when you took up habitual residence abroad. For each of the three years, the following requirements must be met:
- Your stay in Norway must not exceed 61 days
- You or a closely related person (spouse, cohabitant, children) must not have a house/flat available in Norway.
The requirement that you must not have a house/flat at your disposal means that neither you, nor your spouse/cohabitant or your under-aged children can own (directly or indirectly), lease or otherwise be entitled to use a house/flat in Norway. Children under age living with your former spouse or cohabitant in Norway are not normally considered as having a house/flat at their disposal in Norway.
You much submit a tax return for each of these three years, stating whether you meet the requirements for termination of tax liability.