Double Taxation Avoidance Agreements in Norway

Double Taxation Avoidance Agreements in Norway

Updated on Monday 09th January 2023


The double taxation agreements have been designed in order to minimize tax evasion and to encourage mutual development of the economies of the signatory states. Entrepreneurs who conduct business activity in their home country, but who gain profits from Norway as well, need to check what advantages are provided by each taxation system

For example, the taxes applicable on profits and dividends paid to non-residents located outside EEA that Norway levies are:
the corporate tax -  28%;
a 25% withholding tax applicable to the dividends paid to the countries outside EEA.
Even though there are no withholding taxes on interests and royalties paid to nonresidents it is not very appealing to open a business here knowing that the incomes may be taxed twice: once in the country of origin and once in Norway. This is the reason Norway has a vast network of double tax treaties signed and many other drafts waiting to be ratified.
If you are in the situation to make profit from Norway as well as from another country you can discuss with a representative of our law firm in Norway in order to clarify your situation and to make sure that you can profit of the double taxation treaty between Norway and your country of origin. 

Double tax treaties concluded by Norway

So far Norway has signed double tax treaties with the following countries: Albania, Argentina, Azerbaijan, Australia, Austria, Bangladesh, Barbados, Belgium, Benin, Bosnia and Herzegovina, Brazil, Bulgaria, Cayman Island, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Faeroe Islands, Finland, France, Gambia, Georgia, Germany, Greece, Greenland, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Ivory Coast, Jamaica, Japan, Kazakhstan, Kenya, Latvia, Lithuania, Luxembourg, Macedonia, Malawi, Malaysia, Malta, Morocco, Mexico, Nepal, Netherlands, Netherlands Antilles, New Zealand, Pakistan, Philippines, Poland, Portugal, Qatar, Romania, Russia, Senegal, Serbia, Sierra Leone, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Kingdom, United States of America, Venezuela, Vietnam, Zambia, Zimbabwe.

The tax conventions signed between the Norwegian state and other countries are of limited scope and they function only for some domains of business activity. For example, treaties with Uruguay and Uzbekistan function only for the earning from the aviation sector.
The main purpose of the double taxation agreements signed by Norway with other states is to make more flexible the tax liabilities for companies who carry business activity in this country. The tax convention allows foreign investors to be exempt from taxation in Norway either entirely or in part. Since each treaty has its own particularities and provisions might vary from one country to another it is recommendable to consult with a professional in taxation issues.
Our attorneys in Norway are specialists in taxation and tax minimization strategies and can advise local and foreign investors concerning the potential effects of the double taxation treaties.
You can also rely on us for services related to immigration to Norway. Our lawyers can assist you in securing your right to live here, whether you need a temporary or long-term residency permit. You can also count on us for assistance in other civil matters cases, such as family reunification, so do not hesitate to contact us.

How can foreign investors benefit from the provisions of these agreements?

There are two methods through the foreign investors can benefit from the provisions of the treaties: through exemption, when the profits are not taxed at all in Norway and the taxes are paid in the country of origin or through credit, when the profits are taxed in Norway and a credit is granted to that entity in the country of origin in order to cover that.
The withholding taxes on dividends are exempt or minimized by the double tax treaties’ provisions depending on the degree of participation in the Norwegian country. The higher participation and the longer period of time the higher exemptions are granted.

Before taking advantage from these provisions, the tax payers must deliver a proof that the taxes are already paid in the country of origin, such as a tax certificate from the foreign competent authority. Also each treaty has a special section at the end where are stipulated the conditions of benefiting from tax exchange information between the parties.
The most immediate result of the application of tax treaties to business profits is a safer and more relaxed tax climate for investors. Trust and confidence in the economic relationship between two countries also encourages more and more people to open start-ups and to contribute to the economic growth. 

For more information about the provisions of the double tax agreements concluded by Norway and how you can take advantage of them, feel free to contact our law firm in Norway. Moreover, our experienced legal advisers can also resolve any tax issue that may arise in a company's activities. We are specialized in resolving disputes and handling litigations.