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Key points: Five things you should know about Norway’s key election on Monday

What is at stake and who is tipped to win Norway's legislative elections on Monday? Here are five things to know.

Key points: Five things you should know about Norway's key election on Monday
Could Erna Solberg be on her way out of office. Photo by Norsk olje og gass on Flickr.

Change is in the air

Barring a major upset, Prime Minister Erna Solberg’s centre-right coalition that has governed Norway since 2013 is set to be ousted, according to opinion polls and experts.

Labour Party leader Jonas Gahr Store is instead poised to win the polls. Whether he will be able to form a coalition of left-leaning and green parties, with a majority, is another question.

Earlier this week, The Local took an in-depth look at the polls ahead of the election. In addition to putting together an interactive chart that lets you see how many MPs each party is projected to get and how this compares to the last election, we also analysed what could happen if Labour doesn’t get their majority.

ANALYSIS: What will happen in next week’s Norwegian election?

Veteran versus millionaire

No other Conservative leader has governed Norway as long as Solberg, nicknamed “Iron Erna.” A native of the western city of Bergen, the 60-year-old steered the country through successive crises from the migrant wave in 2015 to plunging oil prices and the Covid-19 pandemic.

Store, 61, is a millionaire whose main campaign plank is the fight against inequality. A graduate of Sciences Po in Paris, he follows in the footsteps of his mentor and friend Jens Stoltenberg, the current NATO secretary general. Store served as foreign minister and then health minister in Stoltenberg’s governments. He failed to oust Solberg in the 2017 election.

Store and Solberg aren’t the only leaders you need the low-down on. If you want to learn more about the leaders of Norway’s political parties check out the article below. 

EXPLAINED: Who’s who in Norway’s 2021 election race

Climate crisis

The UN’s alarming climate report in August has propelled global warming to the heart of the election campaign, with a focus on the future of the oil industry in western Europe’s biggest producer.

Several parties on both sides – the Greens, Socialist Left and Liberals – want to put an end to the oil industry and ban any further prospecting.

Their ability to make any inroads on the issue with the bigger parties – which are more favourable to the industry – will depend on their election scores and the balance of power.

Splintered political landscape

Norway’s splintered political landscape makes coalition-building difficult. The two biggest parties, Labour and the Conservatives, have seen their voter bases decline with the rise of smaller parties.

On the left, five parties are in agreement to oust the current government, but some of these have diametrically opposed positions and have said they will not govern together.

If Store is unable to build a coalition with a majority, he could choose to govern solo in a minority government and get backing on a case-by-case basis to pass legislation.

On the right, things are not much different. The Conservatives are supported by a clutch of smaller parties, which also have their own disagreements.

For the rundown on Norway’s nine parties click here.

The magical number four

Much will depend on the small parties’ election night score. Several ofvthem are hovering around the four percent level.

Under the Norwegian system, parties that get more than four percent qualify for the 19 so-called “levelling seats” in the 169-seat parliament, which often prove crucial for building a majority.

In Norwegian this election threshold is called ‘sperregrensen’. If you want to read about the massive impact the threshold could have on this years election in more detail then take a look at The Local’s guide. 

Norwegian election: Which parties could hit the ‘sperregrense’ jackpot?

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TAXES

Who will be affected by Norway’s new exit tax and how will it work?

Norway's government is moving forward with plans to enact stricter tax regulations for people leaving the country. The Local contacted the Ministry of Finance to find out the details.

Who will be affected by Norway's new exit tax and how will it work?

A new exit tax is in the works, the Norwegian government announced recently. 

READ MORE: What we know so far about Norway’s plans for an exit tax

The proposed changes aim to close loopholes within the existing tax system, particularly concerning the taxation of gains made on shares while residing in Norway and moving assets abroad.

Under the proposed regulations, those who have left Norway after March 20th, 2024, would be subject to taxes on gains of more than 500,000 kroner that they have accrued while in Norway. 

This move comes as part of the government’s efforts to address a recent outflow of wealth from the country, with Switzerland being a popular destination for tax exiles from Norway.

READ MORE: Why Norway has continued to see an exodus of wealthy residents

Who would be affected – and how would it work?

The new tax would affect both foreigners and locals – as long as they’re tax resident in the country, State Secretary Erlend Grimstad at the Ministry of Finance told The Local.

“The Norwegian exit tax rules, both the current ones and the ones being proposed, would affect natural persons who are tax residents in Norway,” he said.

The tax settlement process upon departure from Norway would require people to address their tax obligations related to gains exceeding 500,000 kroner on shares acquired during their time in Norway.

Emigrants would have several options for fulfilling this tax obligation, including immediate payment, interest-free instalments spread over 12 years, or deferred payment with accrued interest.

“Exit tax on shares will be imposed on individuals who terminate their tax residence in Norway, either according to Norwegian tax law or the applicable tax treaty.

“The rules also apply when an owner resident in Norway transfers shares as a gift to a person resident outside Norway,” Grimstad said, further noting that the new rules would only apply if the deemed net gain at the time of departure or transfer exceeded 500,000 kroner.

When could the new rules enter into force?

The consultation period for the new exit tax proposal began on March 20th and will last until May 21st, 2024. Thus, stakeholders and the public will have the opportunity to provide feedback and insights for the next two months.

Following this period, the proposal will undergo review and potential adoption by the Norwegian parliament (Storting), with the government needing majority support for implementation.

READ MORE: Does Norway really have some of the highest taxes in the world?

However, if the rules are passed, they will apply from March 20th, 2024, Grimstad told The Local.

“This is necessary to counteract tax adaptations in the time between publication of the proposal and adoption of the changes in the Storting,” he said.

The reasoning behind the new exit tax

Commenting on the exit tax developments last week, Norwegian Finance Minister Trygve Slagsvold Vedum said that it was important to uphold the principle of fairness in the taxation process, noting that people should contribute taxes on assets accumulated in Norway.

However, the proposed regulations also include provisions for those intending to return to Norway within the 12-year timeframe, ensuring that their tax liability would be adjusted accordingly.

“When you relocate, it’s only fair that you contribute taxes on what you’ve earned or gained in Norway. However, this process must be reasonable, hence the 12-year rule. Some people may wish to reside abroad temporarily and eventually return home,” Vedum said at the time, according to the Norwegian Broadcasting Corporation (NRK).

The proposed exit tax would extend beyond shares to include gains from share savings accounts and fund accounts. Additionally, transfers of shares with subsequent gains to people residing abroad, such as relatives, would trigger the tax if gains exceed 100,000 kroner, a reduction from the previous threshold of 500,000 kroner.

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