Tax residence in Norway when moving to or from Norway
Here you will find information on when you become liable to tax as a resident when you move to Norway, when the obligation to pay tax as a resident ceases when you leave Norway, when you are liable to tax on latent gains on shares etc. on moving from Norway and, what you must do when you are liable to tax as a resident in both Norway and another country.
The rules concerning tax residence upon moving to Norway apply to you who have not previously been resident in Norway. The rules also apply to you who have been resident in Norway before, if your previous emigration has been approved for tax purposes.
If you stay in Norway for more than 183 days during a twelve-month period, you will become tax resident in Norway. The same applies if you stay in Norway for more than 270 days during a thirty six-month period. All whole or part calendar days in Norway are included in the calculation of the number of days.
If you stay in Norway for more than 183 days during the year in which you move to Norway, you will be deemed tax resident from your first day in Norway. If the 183 days are split between two income years, you will become tax resident from 1 January of the second year. (You will have limited tax liability in the year before. This means you are only liable to tax on certain income linked to Norway.)
If you stay in Norway for more than 270 days during a thirty six-month period, you will be deemed tax resident from 1 January of the year in which the stay exceeds 270 days. (You will have limited tax liability in the preceding year(s).)
You can stay an average of 90 days per year in Norway without becoming tax resident in Norway.
Johan is a pensioner and emigrated to France in 2003. He stays in Norway every summer and every Christmas. If Johan stays in Norway for more than 270 days over a period of 36 months, i.e. more than three months per year on average, he will become tax resident in Norway. He will then be liable to pay tax in Norway and be obliged to submit a tax return. Tax residence can only cease in accordance with the rules that are described below.
If you are tax resident in Norway pursuant to Norwegian internal law, you are in principle liable to tax in Norway for all your capital and income, regardless of whether it is located or earned in Norway or abroad. Norway's right to levy tax may be limited by the provisions of a tax treaty with another country.
Only if you take up permanent residency abroad can you be deemed to have moved from Norway for tax purposes. Temporary stays abroad do not cancel tax residence in Norway.
For your tax residence in Norway to cease when moving abroad, you must substantiate:
- that you have taken up permanent residency abroad,
- that you have not stayed in Norway for one or more periods which exceed 61 days during the income year,
- that neither you nor your close relatives (spouse, cohabiting partner, child) have a place of residence available in Norway.
If you have lived in Norway for less than ten years before the income year in which you take up permanent residency abroad, your tax residence in Norway will cease in the income year in which all three of these conditions are met.
If you have lived in Norway for a total of ten years or more before the income year in which you take up permanent residency abroad, your tax residence in Norway cannot cease until after the end of the third income year after the year in which you took up permanent residency abroad.
For your tax residence to cease, you must meet the following requirements in each of the three income years after you up permanent residence abroad:
- your stay in Norway must not exceed 61 days,
- neither you nor your close relatives (spouse, cohabiting partner, child) have a place of residence available in Norway.
Per and Kari are both pensioners. They sold their home in Norway and moved to Spain in autumn 2013. They still have a cabin in Norway, which they have owned for 20 years. They are planning to stay in Norway for six weeks every summer and one week every Christmas. Per and Kari will be tax resident in Norway until 31 December 2016. If they stay in Norway for more than 61 days, they will continue to be tax resident in Norway after 2016.
These rules apply to everyone who has lived in Norway for one or more periods totalling more than ten years.
Please note that all whole or part calendar days are included when calculating the period of stay in Norway.
The condition that you must not have a place of residence available in Norway means that neither you nor your spouse, cohabiting partner or minor children may own (either directly or indirectly), rent or be entitled on any other basis to use a home in Norway. Minor children living with a former spouse or cohabiting partner in Norway are not normally considered to have a place of residence available in Norway.
'Place of residence' means any housing unit which has been used as a dwelling. It also covers any housing unit with permanent water and wastewater systems all-year round, provided you are not prevented from using it as a dwelling by a land use plan or similar at the time you moved abroad.
You can still have a holiday home or other real property in Norway after you moved abroad without it preventing the cessation of your tax residence in Norway. This applies to housing units which do not qualify as a place of residence, i.e. housing units without permanent water and wastewater systems all-year round, and housing units which cannot be used as a dwelling at the time you moved abroad due to a land use plan or similar. It also applies to other housing units which were purchased at least five years before the year in which you moved abroad. It is a condition that neither you nor your spouse, cohabiting partner or children have used the housing unit as a dwelling during the five years before the year when you moved abroad.
You will always be tax resident in Norway in the year in which you move abroad and the three following income years if you have lived in Norway for ten years or more before the income year in which you take up permanent residency abroad. During this period, you must submit a tax return in Norway in the same way as if you lived here. You must substantiate that you did not have a place of residence available in Norway during this period and that you have not stayed here for more than 61 days in each year. The obligation to submit a Norwegian tax return will not lapse until the tax authorities in Norway have accepted that the tax residence in Norway has ceased.
Norway's right to levy tax may be limited by the provisions in the tax treaties which Norway has entered into with other countries.
If you stay abroad but do not meet the conditions for cessation of tax liability to Norway under the rules referred to above, you’ll still be resident in Norway for tax purposes under Norwegian domestic law. If you’re resident for tax purposes in both Norway under Norwegian domestic law and in the country to which you emigrate under that country's domestic law, the issue of residence must be determined in accordance with the provisions of the tax treaty between Norway and the other country. The same applies if you become resident in Norway for tax purposes and are still resident for tax purposes in the country from which you emigrated.
Resident for tax purposes
The concept ‘resident for tax purposes’ means that in this context, your tax liability as a resident in a country is the relevant point. In terms of the tax treaty, this means you have the same tax liability as the ordinary residents in the country. If the country’s residents for tax purposes are tax liable for global income (and any assets/wealth), you must be able to substantiate that you tax liable as a resident for tax purposes in the other country if you want to claim that your residence according to a tax treaty has moved from Norway to another country.
Where are you resident pursuant to the tax treaty, and what significance does it have?
When you’re resident for tax purposes in both countries, your residential status must be determined in accordance with the provisions of the tax treaty's article concerning residence for tax purposes (usually, Article 4). Under this provision, you’ll be considered resident in the country in which you have the use of a permanent residential property. If you have a permanent residential property in both countries, the decisive factor is where you have the "strongest personal and financial links (the centre of your life interests)". If this does not provide a clear answer or you do not have a permanent residential property in either of the countries, you’ll be deemed resident for the purposes of the tax treaty in the country in which you ordinarily live. If you have ordinary periods of residence in both countries, you’ll be considered as resident in the country of which you’re a citizen.
Residence under the tax treaty will be of significance in determining which income can be taxed in Norway.
If you’re resident in Norway for tax purposes under Norwegian domestic law but resident in another country under the tax treaty, you’ll generally be liable to pay tax to Norway on income that originate in Norway.
Typical examples are:
- Employment income earned in Norway
- Real property or business income in Norway
- Dividend from Norwegian companies
- You may also be tax liable for pension and disability benefits from Norway.
The tax treaties are not the same, and Norway’s right to taxation for the various incomes will therefore vary from treaty to treaty. Many tax treaties do not regulate assets and wealth. In these cases, Norway has a right to impose taxes on global wealth as long as you’re resident for tax purposes according to the Taxation Act (section 2-1).
Some tax treaties have provisions that make you tax liable to Norway for income originated outside the country of residence that are not transferred (remitted) to this country, and are therefore not taxed according to this country’s tax rules for remittance.
If you’re a resident in Norway under both domestic law and the tax treaty, you’ll generally be liable to pay tax to Norway on all your wealth and income. The tax treaty contains rules concerning how to avoid double taxation, and it may also limit your tax liability to Norway.
Evidence that you reside abroad
If you want to claim that Norwegian taxation of income and/or wealth should cease or be limited because you believe you’re tax liable as a resident for tax purposes to another country according to the relevant tax treaty’s article of residence, you should ensure you have the necessary evidence to substantiate this claim. Such claims must be included in the tax return for each relevant income year you want to make this claim. You're responsible for assessing the correct basis for Norwegian taxation. Therefore, it’s important that you correct information in your tax return for the relevant income/deductions and wealth/debt in accordance with your claim to be treated as a resident in the other country pursuant to the tax treaty with Norway.
You must present confirmation from the tax authorities in the other country that expressly states that the tax authorities consider you resident there for tax purposes under the tax treaty (Certificate of (fiscal) Residence). The confirmation must be original, it must refer to the tax treaty with Norway, and it must state the applicable period. The tax office may require you to present a new confirmation for each income year.
Even if you submit such confirmation stating that the other country's tax authorities consider you to be resident there for tax purposes, the tax office will still carry out an independent assessment of where you should be deemed resident pursuant to the tax treaty. The criteria for this assessment are set out in the tax treaty's Article 4, no. 2.
If you claim your residence pursuant to a tax treaty is in another country for part of or the entire income year, you must present a Certificate of Residence and information concerning your affiliation to the other country and to Norway that is necessary in order for the tax office to assess the question of residence. The same applies if you’re actually taxed on the same income in both the other country and in Norway.
After considering the criteria in the article of residence, one of the countries will be your country of residence pursuant to the tax treaty, and the other country will be the source country pursuant to the tax treaty. If this outcome means that the same income is taxed in both countries as the country of residence pursuant to a tax treaty, this will be double taxation that should be prevented pursuant to this tax treaty. Preferably, this is solved when you apply to change the taxation in the country whose taxation you believe to be incorrect, or whose taxation is in breach of the tax treaty.
If a double taxation situation is not resolved in this way, you must bring the matter up with the tax authorities in the country in which you believe you’re resident. If you’re resident in a country other than Norway, you must bring the matter up with either the Ministry of Finance in that country or with the tax authority that is competent to consider such double taxation cases. If the authority that considers the case concludes that you’ve been taxed on the same income in two countries, they’ll bring the matter up with the Directorate of Taxes or the Ministry of Finance in Norway if they cannot solve the matter of double taxation themselves. If you’re resident in Norway, you can bring the matter up with the Directorate of Taxes.
If you’re resident in Norway for tax purposes under Norwegian domestic rules but resident in another country under a tax treaty, you’ll always be obliged to submit a fully completed tax return to the Norwegian tax authorities.
The rules concerning residence in Norway for tax purposes in connection with immigration and emigration are set out in section 2-1, subsections 2 to 6 of the Taxation Act.
Salary income and other benefits that were earned on the basis of your personal work input, but that is not paid before your tax liability in Norway ceased under internal law, must be recognised as of the date your tax liability ceased and be taxed in Norway. This could for example be holiday pay, bonus payments, severance pay (“parachute payments”), etc. It doesn't affect your tax liability if the payment amount isn't determined until after the work has been performed, or that the payment isn't to be made until a certain period of time after the work was performed.
A person moves to Norway from Sweden in February 2014 and works here in Norway until October 2016. The person then moves back to Sweden and is assigned the status of ‘emigrated from Norway for tax purposes’ with effect from 1 January 2017.
In May of the year after the person emigrated, the person receives a bonus payment from their previous Norwegian employer based on the work they performed in 2016. As the person isn't a tax resident of Norway in the year of payment, the bonus payment must be recognised and taxed in the year of emigration.
If you receive such benefits, you must contact the tax office so that the tax assessment and withholding tax for both the year of payment and the year of emigration can be assessed correctly.
If you meet the requirements for cessation of tax residence pursuant to domestic law or a tax treaty you are liable to tax on the increase in value of shares etc. up until the date you move from Norway. The amount liable to tax is the gain that would have been liable to tax if the shares etc. had been realised on the day before the cessation of full tax liability.
These rules also apply if you transfer shares etc. to your spouse who is tax resident abroad.
The tax liability applies to gains relating to:
- shares and equity certificates in Norwegian and foreign companies
- units in Norwegian and foreign unit trusts
- holdings in Norwegian and foreign partnerships etc.
- subscription rights, options and other financial instruments relating to shares etc., including options from your employer
There is no requirement relating to the size of the ownership interest in the company or the period of ownership.
When the total net gain (after any deductible loss) does not exceed NOK 500,000, the latent gain is not liable to tax. If the total net gain exceeds NOK 500,000, the entire gain is liable to tax.
Latent losses are only deductible when moving to another EU/EEA country and only to the extent a deduction is not granted in the other country. The taxpayer is only entitled to a deduction if the net loss exceeds NOK 500,000.
The tax liability applies irrespective of how long you have been tax resident in Norway.
The latent gain that is liable to tax is calculated and assessed in connection with the tax assessment for the year when you moved (the day before the cessation of full tax liability). Any latent deductible loss will also be calculated in connection with the assessment for the year you moved, but it will not be settled until such time as the shares etc. are realised.
Statement concerning shares etc.
When you claim in your tax return that tax liability to Norway as a resident has ceased pursuant to domestic law or a tax treaty, you must submit a statement covering all shares etc. included in the tax liability, and a calculation of the gain. This applies irrespective of how many shares etc. you own. The statement must be given in the form RF-1141 "Gevinst og tap på aksjer og og andeler ved utflytting" (Gains and losses on shares and holdings on moving from Norway – in Norwegian only) and submitted together with the tax return.
The opening value of the shares etc. is determined in accordance with the ordinary rules. If you have lived in Norway for less than ten years you can demand that the market value on the date when you became tax resident in Norway be used as the opening value for the shares etc. The opening value may not, however, be set higher than the closing value.
The closing value shall be set at market value on the day the shares etc. are deemed to be realised, i.e. the day before the cessation of full tax liability. For listed shares, the average turnover value on the realisation date shall be used. For unlisted shares and holdings without a known market value, the value must be stipulated through the exercise of discretionary judgement.
Deferment of payment of the tax
You may be granted a deferment for payment of the tax on the latent gain until you actually realise the shares etc., provided you furnished adequate security for the tax. You may be granted a deferment without security having to be furnished when you move to an EU/EEA country and Norway has a treaty with a provision that the country you move to will exchange information on your income and assest and assist in the recovery of tax claims. You may also be granted a deferment for payment of the tax without security having to be furnished when you move to Svalbard. You must demand a deferment for payment in the form RF-1141.
Realisation after you have moved
If you are covered by the provision on exit tax and you realise shares etc. within 5 years after your tax liability has ceased pursuant to domestic law or a tax treaty, you must submit the form RF-1314 "Realisasjon av aksjer og andeler etter opphør av skattemessig bosted i Norge" (Realisation of shares after the cessation of tax residence in Norway – in Norwegian only) within two months after the sale took place.
Changes to the calculated latent gain
The calculated latent gain that is liable to tax in Norway can be reduced when you realise the shares etc. at a value lower than the closing value stipulated in connection with the move. You can submit information in the form RF-1314.
The calculated tax lapses if:
- you have not realised the shares etc. five years after your tax liablility has ceased pursuant to domestic law or a tax treaty
- you move back to Norway and become tax resident here pursuant to domestic law before you sell the shares etc.
- you become resident for tax purposes in Norway pursuant to a tax treaty before you sell the shares etc.
The tax office can provide further information.
If you are resident in another EU/EEA country and have limited tax liability in Norway, you can ask to be taxed as if you were resident for tax purposes. The condition is that at least 90 percent of your income from employment, pension, disability benefits or commercial activity is taxed in Norway.
This means that you can claim most ordinary deductions. Among other things, you will be entitled to the full minimum standard deduction/personal allowance, which is otherwise limited based on how long you were resident in Norway during the income year. You may also be entitled to parental allowance for the minding and care of children.
If you are married, your spouse's income must also be included in the assessment of whether or not at least 90 percent of your income will be taxed in Norway. If you have shared children with a cohabiting partner, your partner's income must be included if you claim parental allowance.
You must document that at least 90 percent of your income (and your spouse’s income) will be taxed in Norway.