Paying tax to several countries – letting of other dwellings/holiday homes abroad

As long as you're a tax-resident of Norway, your rental income from houses abroad will  usually be tax liable in Norway.

Rental income may also be tax liable in the country where the property is located. In order to avoid double taxation, Norway has signed tax treaties with many countries.

How double taxation is avoided depends on where the property is located and the rules stipulated in the tax treaty with the specific country.

Double taxation can be avoided under the Norwegian rules on credit deductions, if the property is located in a country that Norway doesn't have a tax treaty with.

The usual method of avoiding double taxation is through the so-called credit method.

Under the credit method, as long as the rental income is taxed in both Norway and the country in which the property is located, you can claim a deduction from your Norwegian tax for the tax you have paid abroad (credit).

Examples of tax treaties that use the credit method:

Sweden, Denmark, Spain, Portugal, France, UK, Germany, Finland, Austria and Switzerland.

If you claim a deduction from your Norwegian tax for tax that you have paid abroad, you must enter this in your tax return. You must also be able to document the amount of tax that you have paid abroad.

You cannot claim a deduction from your Norwegian tax for foreign property tax.

Examples of foreign taxes that don't entitle you to a credit deduction

  • Kommunal fastighetsavgift (Sweden)
  • Kiinteistövero (Finland)
  • Ejendomsværdiskat (Denmark)
  • Council Tax (United Kingdom)
  • Taxe Foncière (France)
  • Taxe d’habitation (France)
  • Taxe Professionelle (France)
  • Impuesto Bienes Inmuebles (IBI) (Spain)
  • Renta de no Residentes (Spain)
  • Internal tax paid to the EU under the EU’s Protocol on the Privileges and Immunities of the European Communities, Article 12 (formerly Article 13) by an employee of the European Commission.

Some tax treaties use the distribution method for avoiding double taxation. The distribution method (also called the exemption method) means that Norway has no taxation rights to either the rental income or the tax value of property abroad.

Examples of tax treaties that use the distribution method: 
Italy, USA, Croatia and Pakistan. There is a complete list here

As a tax resident in Norway, you still have an obligation to provide information about the taxable value of any property owned abroad in your Norwegian tax return. The reason for this is that in these cases, you’re not entitled to full deductions for all your debt and debt interest. Deductions for debt and interest on debt are limited to the proportionate part of your foreign wealth that is exempt from taxation in Norway. However, this does not apply if the property is located in Italy or Croatia.