As from 2017 the tax assessment rules concerning withholding tax have been amended. The amended rules entail that the withholding tax is finally assessed when the distributing company submits a withholding tax return.
The withholding tax return may however be amended within three months after the date of expiry of the deadline for submitting the return. However, the deadline for amending the withholding tax return will in any event expire at 31 December of the year in which the dividends were distributed. As such, the distributing company is given certain flexibility to correct instances where too much tax has been withheld, without the need for the shareholder to submit a withholding tax refund application.
After the above mentioned deadlines for amendments to the withholding tax return have expired, a foreign shareholder being entitled to a reduced tax rate than has been assessed and withheld, must submit a refund application for the excess tax withheld to the Central Office for Foreign Tax Affairs.
Potenital grounds for refund
If the dividend shareholder is tax resident in a country with which Norway has a tax treaty the correct withholding tax rate is likely to be 15 percent. Some tax treaties do on some points have differing terms. However, the majority of the tax treaties require that the shareholder is resident for tax purposes in the treaty state, and is the beneficial owner of the shares.
For personal shareholders resident for tax purposes within the EEA-area that are the beneficial owners of the Norwegian shares, the withholding tax rate may be reduced by a shielding deduction if the withholding tax is higher than the tax payable on the dividends according to the shielding deduction, cf. Section 10-13 (2) and 10-12 of the Tax Act. However, a refund under the tax treaty will normally be more favourable than refund pursuant to the shareholder's model.
Please note: It is usually not possible for personal dividend recipients to receive a full refund of withholding tax, regardless of the basis for their refund claim. Any information indicating that claims made under the shareholder's model will ensure a full refund of withholding tax is incorrect.
Corporate shareholders, etc (other than personal shareholders)
If the shareholder is tax resident in a country with which Norway has a tax treaty the correct withholding tax rate could be lower than 25 %. Some tax treaties do on some points have differing terms as to when such a reduced withholding tax rate will apply. However, the majority of the tax treaties require that the dividend recipient is resident for tax purposes in the treaty state, and is the beneficial owner of the shares.
- Norwegian participation exemption regime
Certain corporate shareholders resident in the EEA may be entitled to a withholding tax exemption under the Norwegian participation exemption regime pursuant to the Norwegian Tax Act section 2-38 paragraph 1 litra i and paragraph 5. To be entitled to the withholding tax exemption, the dividend recipient must be comparable to certain non-personal taxable persons pursuant to the Norwegian Tax Act. The exemption applies to foreign private and public limited companies comparable Norwegian private and public limited companies. Furthermore, the exemption applies to non-personal dividend recipients comparable to Norwegian stock investment funds, associations, institutions/foundations, estates in bankruptcy, municipal and state-owned companies, inter municipal companies, co-operative societies, mutual insurance companies and Savings Banks and other self-owned finance companies.
The application must state which Norwegian entity the shareholder is comparable to and include the basis for the comparability claim.
The shareholder must also be engaged in genuine business activity through an establishment in an EEA country. In addition, the shareholder must be the final recipient of the dividends.
In order to claim a refund of withholding tax, an application must be submitted to the Central Office for Foreign Tax Affairs. The deadline for submitting a refund application for withholding tax on dividends is five years calculated from year end of the year in which the deadline for assessing the withholding tax expired. A refund application cannot be submitted until the date of expiry of the deadline for the distributing company to amend the withholding tax return, as outlined above.
- Full name, address and tax-id of the claimant (and of the representative, if relevant).
- The total amount of refund claimed including a list of all the dividends.
- If the claim is made according to a tax treaty with Norway: A certificate of residence issued by the competent local tax authorities with reference to the claimant's tax identification number. The certificate must be in original. The certificate of residence must mention solely the claimant's name and be valid for the year when the decision to distribute the dividend was made. The Certificate of residence must state that the claimant was resident according to the tax treaty with Norway.
- If the claim is made according to the tax exemption method: Certificate of residence or a confirmation from public authorities that the applicant is registered and based within the EEA.
- A credit advice to certify that the claimant has received the dividends and that the dividends have been subject to Norwegian withholding tax. The credit advice must be issued by a bank and contain the following:
- Name of the recipient (claimant)
- Name and ISIN of the share
- The number of shares and gross dividend per share in NOK
- The total gross amount and withholding tax in NOK
- Pay-date, ex-date or record-date
The bank must document that the dividend payment has been subject to withholding tax, not just tax. If the dividend has gone through a chain of transactions from the Norwegian company to the final recipient (the claimant) an overview of the chain of transactions should be included.
- For dividend payments received from the year 2016 onwards: VPS account information (if applicable). We require information about which account in the Norwegian central securities depository (VPS) the dividend payment was initially made to, i.e. account number and account holder. If the claimant does not have an account with VPS, please contact the bank (account operator) to provide this information.
- A power of attorney (if the application is submitted through a representative).
- General information about the claimant as regards legal, corporate and taxable aspects. Additional documentation in this respect may be required to substantiate that the relevant conditions for reduced withholding tax rate are met. Reference is made to the comments above regarding potenital grounds for refunds.
- Payment details, including the name of the account holder and a Norwegian bank account number or an IBAN and a SWIFT/BIC code. The IBAN account must be able to receive NOK as any refund will be transferred in NOK. A unique payment reference of maximum 20 characters may facilitate the payment.
Please note that only the beneficial owner may be entitled to a refund of withholding tax. An entity that is acting on behalf of someone else as either trustee or investment manager, and who is as such the registered or indirect owner of the dividends, is not entitled to a refund. Neither is an entity that receives the dividend payments and passes them directly on to other entities/persons.
Please include all the required documentation and information in the application. Incomplete applications require longer processing time and the application may be rejected or dismissed due to inadequate documentation.
Send the application to:
Central Office – Foreign Tax Affairs
P.O. Box 8031