Norway is one of the very few countries that imposes taxes on your net wealth. All individuals who are tax residents in Norway are liable to pay tax here on their global net wealth. Let's 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.
When do you become a Norwegian tax resident and subject to wealth tax?
If you stay in Norway for more than 183 days in a 12-month period or more than 270 days in a 36-month period, you are a tax resident and subject to wealth tax.
If you stay here for over 183 days, you will become a tax resident from the 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
Guide: What is Norwegian Wealth Tax?
Download our guide and learn everything about Norwegian Wealth Tax.
Tax Treaties between Norway and other countries
Norway, like most countries, has entered into tax treaties with several 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 taxes, most tax treaties do not regulate them. So, if you are a tax resident of Norway, you are also normally stuck with Norwegian legislation regarding net wealth tax.
It could be worth mentioning that the tax treaty with the US includes wealth tax. So, we might find a solution if you are traveling from the US. Also, if you have a property in Italy, you should know that Norway cannot levy wealth tax on properties in Italy.
Also read: Moved to Norway? Have you moved from Norway? Do I need to report and pay tax to Norway?
When does net wealth tax kick in?
Net wealth tax is computed after deduction for debt, meaning that you can deduct your debt from the valuation of your assets.
All assets should be valued at their true market value as a starting point. However, the full market value of shares, properties abroad, primary and secondary residences in Norway, and a number of other assets is discounted.
And please remember your bitcoins and similar and 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. For example, shares are evaluated to 75 percent of the true market value, and you can, therefore, only deduct 75 percent of the corresponding debt.
Net wealth tax is a 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 Norway's wealth tax it would be an idea to make sure you are not tax resident in Norway when you celebrate New Year’s Eve.
Guide: What is Norwegian Wealth Tax?
Download our guide and learn everything about Norwegian Wealth Tax.
Want to learn more about individual tax return in Norway, please see our website.
