Norway

Individual - Foreign tax relief and tax treaties

Last reviewed - 02 June 2020

Foreign tax relief

Resident individuals can use income taxes paid to a foreign country as a credit against imputed tax (subject to limitations and tax treaty conditions). A non-resident individual would not be entitled to a foreign tax credit.

As regards the credit method, the provisions described relating to unilateral relief will be supplementary to the credit provisions of the tax treaties. A WHT may not be deducted at an amount higher than the amount determined under the provisions of a tax treaty.

According to the Norwegian Tax Act, a foreign tax credit is granted for taxes paid abroad in respect of income derived from sources abroad and capital assets situated abroad.

The credit may not exceed the Norwegian tax, calculated before deducting the tax credit that is attributable to the relevant income category that has been taxed abroad (maximum tax credit). Nor may the tax credit exceed the amount of income tax actually paid abroad for the relevant income category. Tax credits exceeding the mentioned maximum may be carried forward for up to five years.

Foreign income tax may be credited only against Norwegian income tax, and foreign wealth tax may be credited only against Norwegian wealth tax.

Tax treaties

Double tax treaties (DTTs)

An individual Norwegian tax resident is entitled to claim tax credits and/or tax exemptions in respect of income derived from foreign sources. In order to decide what regulations apply, the current tax treaty must be examined. In previous years, the exemption method has been favoured in the Norwegian tax treaties, but this is changing, and new treaties are now based on the credit method to avoid double taxation.

See the Withholding taxes section in the Corporate summary for a list of countries with which Norway has a DTT.

Social security agreements

Social security agreements have been entered into with Australia, Canada, the European Economic Area, India, the United Kingdom, the United States, and others.

Tax information exchange agreements (TIEAs)

TIEAs have been concluded with numerous countries, including countries where no other forms of tax treaties have been entered.