Norway is one of very few countries which imposes taxes on your net wealth. All individuals who are tax resident in Norway are liable to pay tax here on their global net wealth. Let's have a look at what this means and how it can impact you.
The tax rate in 2023 is 1 percent for net wealth between MNOK 1,7 and MNOK 20, and 1,1 percent for net wealth above MNOK 20. You don’t pay tax on net wealth under MNOK 1,7.
If you are not prepared for it, you might experience the wealth tax as an unexpected and unpleasant surprise when your tax computation is ready, even more so as Norway impose tax on your global net wealth. This includes properties, bank accounts and other assets you are holding abroad, that will be subject to tax in Norway.
Tax resident
You are tax resident in Norway, and subject to wealth tax if you stay here for more than 183 days in a 12-month period, or more than 270 days in a 36-month period.
If you stay here for longer than 183 days you will become tax resident from 1st of January in the year where your stay exceeds said number of days. Be aware that parts of a day will be counted as a full day.
Also read: 5 tax deductions to claim in your Norwegian tax return
Tax Treaties
Norway, as most countries, has entered into tax treaties with a number of countries to avoid double taxation. Here you will normally find solutions to avoid any double taxation of your worldwide income.
However, as most countries don’t impose wealth tax, most of the tax treaties do not regulate the wealth tax. So, if you are tax resident in Norway you are also normally stuck with the Norwegian legislation of net wealth tax.
It could be worth mentioning that the tax treaty with the US includes wealth tax. So, if you are travelling from the US, we might find a solution for you. Also, if you have a property in Italy, you should be aware that Norway cannot levy wealth tax on properties in Italy.
Also read: Moved to Norway? Moved from Norway? Do I need to report and pay tax to Norway?
Net Wealth
Net wealth tax is computed after deduction for debt, meaning that you can deduct your debt from the valuation of your assets.
As a starting point, all assets should be valuated to their true market value. However, for shares, properties abroad, primary- and secondary residence in Norway, and a number of other assets, there is a discount on the full market value.
And please remember your bitcoins, and similar as well as any possible debt related to them.
Also, to make it even more interesting, there are some limitations to how much of your debt you can deduct, e. g. shares are valuated to 75 percent of true marked value, and you can therefore only deduct 75 percent of the corresponding debt.
Yearly taxation
Please bear in mind that the net wealth tax is a yearly taxation, based on your net wealth the 1st of January the year after the tax year. So, if you are planning to avoid the wealth tax it would be an idea to make sure you are not tax resident in Norway when you celebrate New Year’s Eve.
Want to learn more about individual tax return in Norway, please see our website.