Withholding tax on interest, royalties and lease payments
Withholding tax applies to interest, royalties and lease payments that go from a Norwegian company or branch to foreign related entities in low-tax jurisdictions.
The withholding tax aims at reducing profit shifting to low or no tax jurisdictions and a more equitable taxation in Norway.
The Norwegian company or branch must deduct and pay
The paying Norwegian company or branch is responsible for reporting and paying withholding tax. If the amount deducted is insufficient to cover the tax liability, the payer may be held responsible.
The company receiving the payment is tax liable.
How to report and pay
Whenever you make such interest, royalties or lease payments, you must deduct withholding tax.
The duty to deduct withholding tax arises even if no payment transfer is made, for example when interest is added to the loan’s principal amount.
This is what happens after you submit the form
- You will automatically receive a receipt in Altinn with a reference number confirming that the form has been submitted.
- You will receive a notification in Altinn within 24 hours with a payment claim for the withholding tax. The notification will show the amount you must pay, the account number for the payment, and the payment deadline.
- Norwegian limited liability companies, businesses assessed as partnerships and other Norwegian companies covered by section 2-2, subsection 1, of the Taxation Act,(in Norwegian) or section 10-40 of the Taxation Act,
- corresponding foreign companies covered by section 10-40 of the Taxation Act with Norwegian partners, and
- Norwegian branches of foreign enterprises
- pay interest on debt, or
- pay for use or right to use intellectual property rights such as patents, trademarks, designs, copyrights and know-how (royalty), or
- pay the lease of certain tangible fixed assets such as ships, vessels, rigs, aircrafts or helicopters
to a foreign related entity in a low-tax jurisdiction.
The Norwegian company with an obligation to withhold tax is responsible for assessing whether the foreign related enterprise in a low-tax jurisdiction is liable to tax.
Foreign entity means that the entity is judged as a separate taxable entity according to Norwegian tax law, and is, for example, comparable to a Norwegian limited liability company.
If the receiving entity is not a taxable entity (i.e. the entity is transparent for tax purposes), you must assess whether any of the partners are taxable entities. If so, the assessment of whether the payments are made to related entities in low-tax jurisdictions must be made at the partner level.
The foreign entity that receives interest, royalties or lease payments is considered “related” when it
- owns and controls (directly or indirectly) at least 50 percent of the Norwegian company
- is owned or controlled (directly or indirectly) by the Norwegian company by at least 50 percent, or if
- a common parent entity owns or controls (directly or indirectly) both by at least 50 percent.
The parties are related if they at some point during the period between the beginning of the income year and the date of payment meet one of the requirements listed above.
The related entity is resident in a low-tax jurisdiction if the general income tax liability on its overall profits amount to less than two thirds of the tax the entity would have been liable to pay if it had been resident in Norway.
See list of countries that are always low-tax jurisdictions (in Norwegian only)
Other jurisdictions can also be considered as low-tax jurisdictions. The company or branch with an obligation to withhold tax is responsible for assessing whether the foreign entity is located in a low-tax jurisdiction. See Skatte-ABC (in Norwegian only) for further guidance on the assessment of low-tax jurisdictions.
Withholding tax on interest, royalties and lease payments is dated according to the general time period principles and will usually be when the foreign company has an unconditional right to the benefit. See Skatte-ABC (in Norwegian only) for more guidance on the time period for the realisation of income.
There is no requirement for an actual payment in order for there to be a duty to deduct and pay withholding tax. For example, the company has a duty to deduct and pay withholding tax if interest is accrued on part of a loan’s principal amount.
The deadline for reporting and paying is 7 days after you made the interest, royalties and lease payment to the receiver.
The withholding tax rate is 15 percent.
- The withholding tax rate can be lower if the recipient is resident in a country that has a tax treaty with Norway. See the overview of countries with which Norway has entered into tax treaties.
- The withholding tax does not apply if the company is genuinely established and carries on genuine economic activity in an EEA country.
- The agreed amount for payment of interest, royalties or lease payments forms the basis for the reporting and payment.
The paying Norwegian company and branch have an obligation to withhold the tax, as well as a responsibility for reporting and paying the correct amount of withholding tax on time. If the deduction is not sufficient, the payer can be held responsible.
You may change the information in the notification of withholding tax after it has been submitted. The deadline for changing the notification of withholding tax is three years from and including the submission deadline.
How to change:
- Go to inbox/archive in Altinn
- Find the submitted (archived) form that you wish to change
- Copy the archive reference – ARxxxxxxx.
- Click on “Create new copy"
- Select “Change of previous notification”
- Paste the archive reference
- Make the change
- Sign and submit the new form/correction
You may report on paper and send the notification of withholding tax by post. This is not as simple as reporting online and takes more time.
Download the paper form:
RF-1528 Notification of withholding tax on interest, royalties and certain leasing payments (PDF)
You must send the paper form to:
Postboks 9200 - Grønland
If you want to submit the notification of withholding tax on paper, you must:
- download the form RF-1528 Notification of withholding tax on interest, royalties and certain leasing payments.
- tick the box “Change previous notification” in the form.
- find the archive reference on the receipt you received in Altinn when you submitted the initial notification. The receipt can be found in inbox/archive.
- use the archive reference as a reference in the form.
- complete the form and make the necessary changes (such as amount, type of payment, date of payment) and send it to the Tax Administration.
The recipients of payments where withholding tax has been deducted can apply for a refund if they believe withholding tax should not have been deducted or that too much has been deducted. ieve withholding tax should not have been deducted or that too much has been deducted.