Tax withholding on dividends from 2018

All non-Norwegian shareholders will from 2018 experience 25 percent tax withholding on dividends received from Norwegian companies unless they apply for a reduced or zero tax withholding in time for 2018 dividend distribution.

With effect from 1 January 2018, new approval and documentation requirements will apply for obtaining reduced withholding tax rates on dividend payments from Norwegian companies to foreign shareholders. These requirements will apply both to dividends on shares registered on an account with the Norwegian Central Securities Depository (VPS) and to shares not registered on a VPS account.

Dividends paid by a Norwegian company to shareholders with tax residency outside of Norway, are generally subject to a withholding tax rate of 25 percent. However, a lower rate may apply under a double tax treaty or due to the Norwegian participation exemption rule for shareholders resident within the European Economic Area.

Until recently, the Norwegian tax administration has operated a simplified procedure where the shareholder and nominees could receive their dividends with a reduced or even no withholding tax, as long as the company paying the dividends had positive knowledge of the shareholder’s identity and tax status.

Now, the rules have been tightened and all foreign shareholders must document their identity and tax status in order to receive a reduced (or zero) withholding tax. This is done by filing an application to the Central Office for Foreign Tax Affairs for getting a permission to resume or start using a reduced withholding tax rate.