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Norwegian dividend withholding tax

Norway introduces documentation regime in order to qualify for reduced tax rate

According to the Norwegian Tax Act, Norwegian limited companies (AS or ASA) with foreign shareholders must deduct 25 % withholding tax on dividends from the company. However, the withholding tax will commonly be reduced since there should normally be no withholding tax on distributions to corporate shareholders within the EEA/EU, or since Norway in its tax treaties may have reduced or exempted the withholding tax rate.

From the January 1, 2018 new regulations enter into force that increases the documentation requirements in order to qualify for reduced dividend withholding tax. If these requirements are not met the distributing company must withhold 25% in taxes.

The new rules are:

Individual non-Norwegian shareholder

  • Confirmation from the shareholder that the individual is the beneficial owner of the distribution.
  • Confirmation of tax residence from the tax authorities in the country where the shareholders is a residence. The confirmation cannot be older than three years at the time of distribution.

Corporate non-Norwegian shareholder

  • Approval from the Norwegian tax authorities that the shareholder is entitled to reduced tax according to Norwegian domestic law of a tax treaty.
  • Confirmation from the shareholder that the corporate shareholder is the beneficial owner of the distribution.
  • Confirmation of tax residence from the tax authorities in the country where the shareholders is a residence. The confirmation cannot be older than three years at the time of distribution.

VPS-registered shares

Note that other rules apply to shares registered in the Norwegian Central Securities Depository (VPS).

If you need assistance with procuring documentation or apply for an approval from the tax authorities, please contact Magnus Legal.

 

Contact: Lawyer Martin Wikborg