Foreign shareholders may claim refund of Norwegian dividend withholding tax.
1) Dividend withholding tax rates
Dividends paid by a Norwegian company to non-resident shareholders are as a starting point subject to a 25% withholding tax.
For both corporate and individual shareholders, the withholding tax rate may be reduced by a tax treaty between Norway and the home state of the shareholder. This rate is commonly reduced to 15 % and, in certain cases, completely abolished.
Further, dividends distributed by Norwegian companies to a corporate shareholder resident in an EU/EEA member state may be exempt from withholding tax. This exemption applies regardless of the ownership participation or holding period. A condition for the exemption is however that the EU/EEA resident corporate shareholders is the beneficial owner of the dividends and that it is really established and carries out genuine economic business activities in its home state.
2) The withholding obligation
It is the Norwegian dividend distributing company that is liable for applying the correct withholding tax. In order to safeguard against the potential liability, the company will commonly apply the maximum rate.
It is then up to the foreign shareholder to approach the Norwegian tax authorities.
3) The tax refund claim
>Whether the shareholder is entitled to a reduced tax rate and thus should claim a tax refund depends on facts and circumstances, particularly where the shareholder is a resident and the ownership participation.
The claim may cover refund for the last five years.
4) Pre-approved reduced rate
It is worth noticing that the tax authorities may grant corporate shareholders upfront relief from the dividend withholding tax. This pre-approval could entail either a reduced rate or a complete abolishing of the withholding tax.
5) Our services
Our lawyers will be happy to assess the feasibility of a refund of the dividend withholding tax. If relevant, we may claim refund or apply for upfront relief on your behalf.