3.3.2 Interest on debt abroad

Item 3.3.2 Applies to the tax year 2016

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Under this item, you must enter what you have paid in interest on debt abroad.

Does this item concern me?

This item concerns everyone who has paid interest on debt to foreign lenders.

I live in Norway

If you are resident in Norway for tax purposes, you are entitled to a deduction for interest on debt. The deduction for interest on debt is limited if:

- you run/participate in a business abroad and income from the business is exempt from taxation in Norway under a tax treaty,

- you have real property abroad and income from the property is exempt from taxation in Norway under a tax treaty.

However, the deduction will not be limited if you own a residential property or holiday home in another EEA state and the applicable tax treaty states that the income is not taxable in Norway.

For 2016, this applies to Belgium, Italy and Croatia. If you have claimed a deduction for interest on debt in the country in which the house/apartment or holiday home is situated, you will not be entitled to deduct this amount in Norway.

I live abroad

If you are not resident in Norway for tax purposes, you will generally only be able to claim a deduction for interest on debt that is linked to real property in Norway or business activity which is taxable in Norway.

If you are resident in another EEA state, you can still receive a deduction for interest on debt if all or almost all (90 percent) of your total income is taxable in Norway.
However, if you have received income from real property or commercial activity abroad which is exempt from taxation in Norway under a tax treaty, the deduction for interest on debt is limited.

However, the deduction will not be limited if you own a residential property or holiday home in another EEA state and the applicable tax treaty states that the income is not taxable in Norway.

For 2016, this applies to Belgium, Italy and Croatia. If you have claimed a deduction for interest on debt in the country in which the house/apartment or holiday home is situated, you will not be entitled to deduct this amount in Norway.

If you are claiming the standard deduction under item 3.3.7 you cannot claim a deduction for interest on debt under item 3.3.2.

How do I enter this in my tax return?

Under the item, you must enter the lender's name, the debt in Norwegian kroner, interest on debt in Norwegian kroner and the average exchange rate. You should use the average exchange rate from Norges Bank.

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Documentation requirements

You do not need to send us any documentation for this, but you must be able to present documentation if we ask for it.

If we ask you to, you must be able to document the following:

  • debt and interest on debt with confirmation from the lending institution,
  • if you own a dwelling/holiday home in another EEA state, you must be able to document that you have not claimed a deduction for the interest on debt in the country in which the dwelling is situated,
  • if you are not resident in Norway for tax purposes and are claiming a deduction for interest on debt, you must be able to document that all or almost all of your income is taxable in Norway. The basis for comparison is your total income before deductions in the various countries.

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