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Dividends from Norwegian companies to foreign shareholders

Documentation requirements for a reduced withholding tax rate.

Here you'll find information about:

  • The rules for withholding tax deductions on dividends
  • The documentation requirements for a reduced withholding tax rate
  • How to apply for a pre-approval from the Norwegian Tax Administration
  • How to apply for a permit to operate a nominee account in VPS with a reduced withholding tax rate

The rules for withholding tax deductions on dividends

Foreign shareholders (final dividend recipients) are liable to tax in Norway for dividends received from Norwegian companies. If the Norwegian distributing company does not know the identity and tax status of the foreign shareholder, the company must deduct 25 percent withholding tax on dividends.

The distributing company may however apply a reduced withholding tax rate in accordance with a double taxation treaty or a 0 percent tax rate pursuant to the exemption method in section 2-38 of the Norwegian Tax Act, if the shareholder has provided documentation that proves they're entitled to a reduced withholding tax rate.

The shareholder must provide the documentation before the tax deduction. Normally, this means before the dividend distribution. The same documentation requirements apply for shares registered in VPS (the Norwegian Central Securities Depository) and shares not registered in VPS.

The documentation must not be submitted to the Norwegian Tax Administration. You'll find information about the correct recipients of the documentation further down this page, under "General information about the documentation requirements".

Read more about the rules in section 5-10(a) of the Tax Payment Regulations (available in Norwegian only). See the tax office's unofficial English translation of the rules here.

Personal shareholders (final dividend recipients who are private individuals) can obtain a reduced withholding tax rate at source if they're resident in a country with which Norway has a double taxation treaty. In order to fulfil the documentation requirements under a tax treaty, personal shareholders must provide the following:

  • Certificate of residence, issued by the tax authorities in the shareholder's country of residence, specifically confirming that the shareholder is a tax resident there in accordance with the tax treaty with Norway. The certificate must not be older than three years at the time of the tax deduction.
    • Exception: If the distributed dividend amount per year is less than NOK 10,000, a certificate of residence is not required. The amount limit applies separately for each company in which the shareholder invests. A new amount limit of NOK 10,000 will apply for extraordinary dividend distributions. Please note that this exception does not apply to applications for refund of withholding tax.
  • Confirmation from the shareholder that they're the beneficial owner of the dividends.

Personal shareholders cannot apply for a pre-approval from the Norwegian Tax Administration. In order to obtain a reduced withholding tax rate at source, personal shareholders must present the documentation to their bank, custodian or account operator.

Corporate shareholders (final dividend recipients who are not private individuals) can obtain a reduced withholding tax rate according to a tax treaty and/or be entitled to exemption from withholding tax pursuant to the exemption method (2-38 of the Norwegian Tax Act).

Documentation requirements for a reduced withholding tax rate according to a tax treaty

  • Documentation proving the shareholder is entitled to a reduced withholding tax rate according to a double taxation treaty, usually a decision on refund of withholding tax or a letter of pre-approval from the Norwegian Tax Administration.
  • A certificate of residence, issued by the tax authorities in the shareholder's country of residence, specifically confirming the shareholder is resident there in accordance with the relevant tax treaty with Norway. The certificate must not be older than three years at the time of the tax deduction.
  • Confirmation from the shareholder that they're the beneficial owner of the dividends.

Documentation requirements for exemption from withholding tax pursuant to the exemption method

  • Documentation proving the shareholder is entitled to exemption from withholding tax pursuant to the exemption method in section 2-38 of the Norwegian Tax Act, usually a decision on refund of withholding tax or a letter of pre-approval from the Norwegian Tax Administration.
  • A certificate of residence or a registration certificate, showing that the shareholder is resident in an EEA country. The certificate must not be older than three years at the time of the tax deduction.
  • A statement from the shareholder, confirming that the basis for the tax exemption status remains unchanged. The statement must not be older than three years at the time of the tax deduction.
  • Confirmation from the shareholder that they're the final dividend recipient.

Brexit: New rules for corporate shareholders resident in the United Kingdom

The United Kingdom left the EU on 31 January 2020, and the transitional period where the United Kingdom was treated as if the country was still a member of the EU and the EEA expired on 31 December 2020.

No longer comprised by the exemption method

From 1 January 2021, Norway's relationship with the United Kingdom is no longer regulated by the EEA Agreement. This means that certain corporate shareholders resident in the United Kingdom are no longer comprised by the exemption method (section 2-38 of the Norwegian Tax Act). Consequently, they're not entitled to exemption from withholding tax under the exemption method after this date.

Special provisions in the tax treaty

Corporate shareholders can be entitled to a reduced or 0 percent withholding tax rate according to the double taxation treaty between Norway and the United Kingdom. Under the treaty, the tax rate is usually reduced to 15 percent. Certain corporate shareholders may be entitled to a 0 percent tax rate if they fulfil the requirements under a special provision in the treaty.

Corporate shareholders that directly or indirectly owns at least 10 percent of the capital in the Norwegian distributing company may be entitled to a 0 percent withholding tax rate according to Article 10, no. 2, letter b (i) in the tax treaty.

Approved pension schemes may be entitled to a 0 percent tax rate pursuant to Article 10, no. 2, letter b (ii), and the same applies to parts of the British Government as described in Article 10, no. 3, letter b (ii).

Corporate shareholders must provide documentation showing they fulfil the conditions under a special provision in the treaty.

Read more about tax and VAT implications of Brexit.

Application for pre-approval

Corporate shareholders (dividend recipients who are not private individuals) can apply for a pre-approval from the Norwegian Tax Administration. A pre-approval substantiates that the shareholder is entitled to a reduced or 0 percent withholding tax rate according to a double taxation treaty or exemption from withholding tax pursuant to the exemption method (2-38 of the NorwegianTax Act).

The approval scheme allows shareholders to document their right to a lower withholding tax rate than 25 percent, without having to claim a refund of withholding tax.

  • Name
  • Address
  • Tax Identification Number (tax ID/TIN)
  • Legal basis: You must specify in the application whether you apply for a reduced withholding tax rate under a tax treaty or exemption from withholding tax pursuant to the exemption method (section 2-38 of the Norwegian Tax Act)
  • If you apply under a tax treaty:
    • A certificate of residence, issued by the tax authorities in the shareholder's country of residence, specifically confirming that the shareholder is a tax resident there in accordance with the relevant tax treaty with Norway. The certificate must not be older than six months.
    • If you claim a reduced withholding tax rate according to a special provision in the tax treaty, you must specify this in your application.
  • If you apply under the exemption method:
    • A certificate of residence or a registration certificate, showing that the shareholder is resident in an EEA country. The certificate must not be older than six months.
    • A statement naming the shareholder's legal entity type, including an assessment of which Norwegian entity type the shareholder is comparable to as set out in section 2-38, subsection 1, letter a-h, of the Norwegian Tax Act.
    • A statement explaining why the shareholder should be considered as genuinely established and carrying out genuine economic activity within the EEA area, see section 2-38, subsection 5, of the Norwegian Tax Act.
  • The application must be signed by the shareholder
    • If a representative submits the application, the representative must provide a power of attorney signed by the shareholder. If you use our application form, a signature from the shareholder is sufficient as long as the representative's name and contact information is stated under item 2 in the application form.

Select the form that applies to you, download and complete:

Send the application to:

Skatteetaten
Postboks 9200 Grønland
0134 OSLO
NORWAY

Note: A pre-approval does not have to be renewed as long as the actual circumstances on which the pre-approval is based remain unchanged. The same applies when a former decision on approved refund of withholding tax is used as documentation to be registered on an account with a reduced withholding tax rate.

  • A change in organisational form
  • Change of business address to another country
  • Mergers and demergers, sale of shares and other transactions that change the legal structure and ownership
  • Changes in the establishment's purpose/objectives as set out in operating documents (for example articles of association)

  • Change of the establishment's name
  • Change of business address within the same country

Foreign custodians must apply for a permit to register shares on nominee accounts in VPS

Foreign custodians must apply for a permit to operate a nominee account (NOM account) in VPS with a tax rate lower than 25 percent. Permits granted under the rules that applied before 1 January 2019 (permits dated before 1 June 2017) are no longer valid. Custodians who have been granted permits under the former rules, and who wish to continue to register shares on an account with a reduced tax rate, must apply for a new permit.

  • The custodian must only register shares on a nominee account in VPS with a reduced withholding tax rate on behalf of a final dividend recipient after having received documentation in accordance with section 5-10a-1 of the Tax Payment Regulation
  • The custodian must make sure the documentation is renewed within the deadlines set in the regulation
  • The custodian must provide information about the final dividend recipient when requested by the Norwegian Tax Administration in accordance with section 5-10a-2 of the Tax Payment Regulation
  • The custodian must make sure that nominee accounts in VPS are marked with "NOM"

  • ID from the Financial Supervisory Authority of Norway (Finanstilsynet ID)
  • A confirmation from the custodian that they're familiar with the documentation requirements for a reduced or 0 percent withholding tax rate on dividends, and with the conditions of the permit as they're stated in section 5-10(a) of the Tax Payment Regulation
  • A copy of the license issued by the Financial Supervisory Authority of Norway, stating that the custodian is authorised to be registered in a Norwegian securities register. Alternatively, a reference to the Financial Supervisory Authority of Norway's registry where it's stated that the custodian has such authorisation.

Download and complete:

Send the application to:

Skatteetaten
Postboks 9200 Grønland
0134 OSLO
NORWAY

General information about the documentation requirements

Shareholders who own shares registered on a VPS account in a foreign custodian's name (NOM account) must provide the documentation to the foreign custodian.

Shareholders who own shares on a VPS account registered directly in the name of the shareholder, must provide the documentation to the account operator for investor. The account operator for investor is the one who sets up and administrates the VPS account. If the VPS account is set up by a foreign custodian, and the shares are registered directly in the shareholder's own name, the shareholder must present the documentation to the foreign custodian. 

If the shares are not registered in VPS, the shareholder must provide the documentation directly to the Norwegian company.

The documentation must not be submitted to the Norwegian Tax Administration.

The custodian/account operator can store the documentation electronically. It is not necessary to keep paper documents.

If the shareholder changes their name, and the documentation that's provided is in the shareholder's former name, the shareholder must provide a confirmation of name change. The confirmation must be presented to the custodian or account operator, in addition to the other documentation. It is not necessary to apply for a new pre-approval. There are no requirements to the format of the confirmation of name change.

Compared to companies registered in VPS, it's often easier for companies not registered in VPS to gather information on the shareholder's identity and tax status. This is because it's easer for these companies to communicate with the shareholder directly.

If the company is familiar with the shareholder's identity and tax status, and is able to confirm that the shareholder is entitled to a reduced withholding tax rate at source, the shareholder does not need to fulfil the documentation requirements.

Note: If the company misjudges the shareholder's identity and tax status, the company can be held liable for incorrect withholding tax deductions. The company will not be held liable if the shareholder meets the documentation requirements.

The certificate of residence is initially valid for three years after the date it's issued. If the certificate is issued for prior income years, its validity is calculated from the end of the relevant year. If the certificate refers to a specific period between two dates, the document must be renewed within three years from the end date on the certificate.

  • Example 1: A certificate of residence issued for the income year 2018, dated 1 November 2018, must be renewed by 1 November 2021.
  • Example 2: A certificate of residence issued for the income year 2015, dated 1 November 2017, is valid from 31 December 2015. The certificate must be renewed by 1 January 2019.
  • Example 3: A certificate of residence issued for the period 31 August 2018 to 31 December 2018 must be renewed by 31 December 2021.

The amount limit of NOK 10,000 applies for all ordinary dividends received in the income year in total. For companies that normally distribute dividends more than once during the year, the amount limit of NOK 10,000 is divided by the number of ordinary dividend payments. A new limit of NOK 10,000 will apply for extraordinary dividend payments.

  • Example 1: The shareholder receives a dividend payment from a company that only distributes one ordinary dividend per year. The shareholder must only provide a certificate of residence if the dividend is NOK 10,000 or more. The shareholder can receive extraordinary dividends in addition to the ordinary dividend, but must then provide a certificate of residence if the extraordinary dividend amount is NOK 10,000 or more.
  • Example 2: The shareholder receives dividend from a company that distributes four ordinary dividends during a year. The shareholder must provide a certificate of residence if one of the dividends is NOK 2,500 or more, even if the dividends amount to less than NOK 10,000 in total.

The main rule is that the certificate of residence must always refer to the relevant double taxation treaty with Norway. Documentation without such reference may only be accepted in special cases, for example when the tax authorities in a country of residence will not issue such a certificate under any circumstances.

The tax office is familiar with the American tax authorities' (IRS) practices in that they do not issue certificates of residence referring to the tax treaty. Certificates of residence from the IRS will still be sufficient documentation of residence according to the tax treaty between the United States and Norway.

The documentation requirements also apply for supranational organisations.

As an alternative to a pre-approval or a decision letter on refund of withholding tax, supranational organisations can provide reference to a treaty that explicitly states that the entity is exempt from tax in the member states.

Foreign custodians with a permit to register shares on nominee accounts (NOM accounts) with a reduced withholding tax rate according to a tax treaty can also register shares on accounts with a reduced or 0 percent tax rate on behalf of supranational organisations.

This applies even if the permit to register shares on an account with a lower tax rate does not explicitly mention such entities. 

Contact us

If you have questions about the documentation requirements for a reduced withholding tax rate, the application for pre-approval or the permit to operate a NOM account in VPS, you may contact us by e-mail at [email protected]

 

Read more about withholding tax on share dividends