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Imagine waking up to the breathtaking view of Norwegian fjords, hitting the slopes for some world-class skiing, and enjoying top-notch public services without breaking the bank. Well, for about 9,000 Americans, this is their everyday reality in Norway!
But here’s the twist. Even as you’re living your best Norwegian life, as a US citizen or green card holder, you’re still on the hook for US taxes, despite where you call home.
Now, before you start panic-googling one-way tickets back to the States, hold up. If you’re already paying income tax to the Norwegian government, you have options to avoid double taxation.
In this blog post, we’ll explore the ins and outs of your tax obligations, from filing thresholds to potential tax breaks that could save you a krone.
Snapshot of taxes in Norway
- Primary tax forms: Skattemelding (formerly known as Selvangivelse)
- Tax deadline: April 30th for most taxpayers; self-employed individuals typically have until May 31st
- Reporting website: skatteetaten.no
- Administrative language(s): Norwegian (Bokmål and Nynorsk), with some English support available
- US Tax treaty? Yes
- Totalization agreement? Yes
Determining tax residency & liability in Norway
Anyone who meets at least one of the following criteria meets the legal definition of a Norwegian tax resident:
- Your permanent home is in Norway, or
- You stay in Norway for more than 183 days in any 12-month period, or
- You stay in Norway for more than 270 days over a 36-month period
Norwegian tax residents are taxed on their worldwide income, which means they are required to report and pay taxes on income from all sources, both within Norway and from other countries. This includes employment income, business income, investment income (dividends, interest, capital gains), and others.
Norwegian residents’ global income is taxed at a flat rate of 22%.
On the other hand, non-residents only have to pay Norwegian taxes on Norwegian-sourced income. This typically includes:
- Income from employment in Norway
- Business income from a permanent establishment in Norway
- Dividends from Norwegian companies
- Rental income from Norwegian property
- Certain types of pension income related to previous employment in Norway
Understanding the Norwegian tax system and deadlines
Norwegian tax residents (and those who earn Norwegian-sourced income) generally must file an annual income tax return. Most taxpayers file the “Skattemelding” (formerly known as Selvangivelse).
In Norway, the tax system is highly automated and user-friendly, although it still may seem complex.The Norwegian Tax Administration (Skatteetaten) typically sends pre-filled tax returns to residents based on information they’ve already received from employers, banks, and other sources.
The tax deadline is usually April 30th for most taxpayers. However, self-employed individuals and those with certain types of income typically have until May 31st to file. To file your return and pay taxes, you’ll use the skatteetaten.no portal linked above.
Before you can file taxes in Norway, you’ll need a Norwegian national identity number (fødselsnummer) or a D-number if you’re a temporary resident. You’ll also need to set up an electronic ID (BankID, Buypass, or Commfides) to access the online tax portal.
Note:
Electronic filing is the norm in Norway. Most residents receive their pre-filled tax return electronically and can make any necessary modifications online. If you agree with the pre-filled information, there are no further steps. Non-action is considered acceptance of the tax return as presented. If you need to make changes or additions to your pre-filled return, you must do so by the deadline that applies to you.
Taxation of income in Norway
The income bracket tax rates in Norway, which apply above and beyond the general 22% flat income tax rate, are as follows:
| Income range (NOK) | Tax rate bracket |
| 208,051 – 292,850 (20,805 – 29,285 USD) | 1.7% |
| 292,851 – 670,000 (29,285 – 67,000 USD) | 4.0% |
| 670,001 – 937,900 (67,001 – 93,790 USD) | 13.6% |
| 937,901 – 1,350,000 (93,790 – 135,000 USD) | 16.6% |
| Over 1,350,000 (Over 135,000 USD) | 17.6% |
Non-resident workers in Norway benefit from a simplified tax system. A flat tax rate of 25% applies to salaries below a specific threshold under the Pay-As-You-Earn (PAYE) scheme. This rate includes both income tax and social security contributions. The PAYE system streamlines tax obligations for temporary workers.
Note that the PAYE system doesn’t allow the deductions we’ll disuss next.
Deductions & allowances
Some common Norwegian tax benefits for US expats living in Norway include:
- Standard deduction: NOK 104,450 (~$9,740) or 46% of gross income, whichever is lower
- Personal allowance: NOK 88,250 (~$8,227)
- Pension contributions: Up to 7% of income, capped at NOK 86,250 (~$8,040)
Note:
Travel expenses incurred while commuting between home and work, including those within and outside the EEA, can be deducted up to a maximum of NOK 82,050 (approximately $7,780). This limit applies to all travel-related costs such as tolls, ferries, and flights.
Other taxes in Norway
Self-employment taxes
Self-employed individuals in Norway pay:
- Income tax: Same progressive rates as employees
- Social security contributions: 11% of net income
Social security taxes
Norwegian employees typically pay 7.8% of their gross salary for social security contributions. Employers contribute an additional 14.1%.
Note: Norway’s totalization agreement with the US prevents American expats living in Norway from having to pay social security taxes to both countries.
Capital gains taxes
Capital gains in Norway are typically taxed at a flat rate of 22%.
VAT
The standard VAT rate in Norway is 25%. Reduced rates include:
- 15% for food and beverages
- 12% for public transport, hotel accommodation, and cinema tickets
Property taxes
Property taxes in Norway are set by individual municipalities and can range from 0% to 0.7% of the property’s assessed value.
Wealth tax
Norway levies a wealth tax on individuals with net assets exceeding NOK 1.7 million (~$170,000 USD) for singles and NOK 3.4 million (~$340,000 USD) for couples. This tax consists of a 0.7% municipal component and a state component ranging from 0.3% to 0.4% for wealth above NOK 20 million (~$2 million USD) for singles and NOK 40 million (~$4 million USD) for couples, resulting in a maximum combined rate of 1.1%.
Inheritance and gift taxes
Norway abolished inheritance and gift taxes in 2014. There are no taxes on inheritances or gifts, regardless of the amount or relationship between the giver and receiver.
Remember: While this guide provides a general overview of income taxation in Norway, these situations are often complicated for expats. We always recommend consulting with a tax advisor familiar with both US and Norwegian tax laws for advice on your specific case.
US taxes for expats living in Norway
The US has a citizenship-based taxation system, meaning that all American citizens and permanent residents — no matter where they live — are subject to US taxes.
If you earn above a certain threshold, you must file (and potentially pay) federal income taxes.
Americans abroad receive an automatic two-month tax extension to June 15th. You can extend that deadline even further upon request to October 15th. Nonetheless, you’re responsible for paying taxes by April 15th.
US citizens residing in Norway face potential double taxation on the same income. While both the US and Norway claim tax jurisdiction over their citizens, several strategies can help mitigate this issue. Here are a few strategies you implement:
Foreign Tax Credit (FTC)
The Foreign Tax Credit offers US citizens the ability to claim credits for taxes paid to a foreign government, effectively reducing their US tax obligation.
In Norway, where tax rates are generally higher than in the US, this often not only eliminates any US tax owed but may also result in extra credits. These excess credits can be applied to future US taxes on foreign income.
To qualify for the FTC, foreign taxes must be:
- legal
- based on income
- charged to you specifically, and
- Paid or accrued
Foreign Earned Income Exclusion (FEIE)
The Foreign Earned Income Exclusion permits Americans living abroad to exclude a portion of their foreign-earned income from US taxation. For the 2023 tax year, up to $120,000 per individual can be excluded, increasing to $126,500 in 2024.
To qualify for this exclusion, you must pass either the Physical Presence Test or the Bona Fide Residence Test. Meeting these requirements also allows you to claim the Foreign Housing Exclusion or Deduction. This way, you can get an exclusion of additional income based on qualifying housing expenses in Norway, such as rent and utilities, further reducing US taxable income.
US-Norway tax treaty
The US-Norway tax treaty of 1971 outlines rules for preventing double taxation, determining residency, and taxing various forms of income between the two countries.
The treaty also offers benefits to certain groups, such as students, teachers, researchers, and those receiving dividends, interest, royalties, pensions, alimony, social security, or child support. Those who qualify should file IRS Form 8833 to claim these treaty benefits.
US-Norway totalization agreement
The US and Norway have a totalization agreement to prevent double social security taxation.
The country you are required to make social security contributions in depends on how long you plan to stay in Norway. If you’re there temporarily (generally up to five years), you may continue contributing to the US system. Under the totalization agreement, work credits from both countries can be combined when determining eligibility for benefits.
Expat tax reporting requirements
Living overseas may introduce additional reporting requirements. For example:
- FBAR (Foreign Bank Account Report): Americans who hold more than $10,000 across foreign financial accounts must file an FBAR.
- Form 8938 (Statement of Specified Foreign Financial Assets): If you have over $200,000 in foreign financial assets at the end of the year or over $300,000 at any time during the year, you must submit Form 8938.
- Note: The reporting thresholds vary for married couples filing jointly and filers based in the US.
Stress-free tax filing with Bright!Tax
While these strategies provide effective means to avoid double taxation, each expat’s financial situation is unique. Consulting with a tax professional specializing in expat taxation is advisable to ensure compliance with both US and Norwegian tax laws while optimizing available benefits.
Resources:
- https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-norwayhighlights-2024.pdf
- https://www.irs.gov/businesses/international-businesses/norway-tax-treaty-documents
- https://taxsummaries.pwc.com/norway
- https://www.skatteetaten.no/en/person/taxes/
- https://mercans.com/resources/statutory-alerts/norway-changes-in-tax-rates-and-social-security-rates/
