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TAXES

EXPLAINED: Norway’s global tax system

Norway has a system which taxes residents on their worldwide income. The system doesn’t just apply to income tax. 

Pictured is a person preparing to go through their taxes.
Norway has a global tax system, which means residents are required to pay money on income earned abroad. Pictured is a person preparing to go through their taxes. Photo by Kelly Sikkema on Unsplash

Tax residents of Norway must pay tax to the Norwegian authorities on income earned in the country or abroad. 

If you stay in Norway for more than 183 days during a twelve-month period, you will become a tax resident of Norway. The same applies when you visit Norway for more than 270 days during a thirty-six-month period. 

Should you stay in Norway for more than 183 days in the year you first move to Norway, you will be considered a tax resident from your first day in Norway. 

The Norwegian Tax Administration (Skatteetaten) has more information on what constitutes a tax resident on its website. It also has more information on those with a limited tax liability and how taxable income works after you leave Norway. 

READ ALSO: Five things foreigners should know about income tax in Norway

What the tax administration considers income can come in many forms. The Norwegian Tax Administration considers salary and wages earned abroad while a tax resident, any income from real estate (such as the sale of foreign property or renting a property abroad out), interest made on foreign savings and any money made from shares and securities abroad as taxable. 

You are required to declare these forms of income when filling out your Norwegian tax return. Taxpayers must also add any foreign debts or liabilities (such as a student loan or mortgage) when filling out a Norwegian tax return – doing so can result in tax deductibles. 

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You can claim a credit deduction on your Norwegian tax return to avoid double taxation on income already taxed in other countries. This is where the tax you have paid abroad is deducted from your tax liabilities in Norway. 

Credit deductions can be applied to all types of income abroad, such as interest and money made from shares. Generally, the tax abroad must have been settled and paid for in the same income year. 

When adding income from abroad to your tax return, you can include any tax you have paid in the country where you received the money. This will then update your tax return. Norway’s tax administration has a dedicated section on its website for wealth and income abroad, which includes a video on how to claim a credit deduction.

Norway’s global tax also applies to other forms of tax. An example is a wealth tax. Those with a net wealth exceeding 1.7 million kroner for single or unmarried taxpayers and 3.4 million kroner for married couples in Norway.

READ ALSO: What you need to know about wealth tax in Norway

Net wealth means assets and wealth minus any debts and liabilities. For the purposes of the wealth tax, properties abroad don’t receive the same valuation discount one primary home in Norway does. Shares and income abroad also contribute to your global wealth, meaning the two main forms of taxation many will need to be aware of in terms of Norway’s global system are income tax and wealth tax. 

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MONEY

How Norway has become cheaper for tourists

The recent drop in Norway's price level has made it a more appealing destination for tourists looking to visit Scandinavia without breaking the bank.

How Norway has become cheaper for tourists

Norway has long held a reputation for being one of the most expensive countries in Europe.

From sky-high prices for everyday items like groceries and dining out to costly accommodation and transportation, Norwegian prices often raise eyebrows among visitors and newcomers.

READ MORE: What will be cheaper and more expensive in Norway in 2024? 

The perception of Norway being unbelievably pricey is not unfounded; historically, its price levels have consistently ranked well above the European average.

Recent figures, however, indicate a potential shift in this dynamic.

The latest EU price statistics

In 2023, Norway’s price level was 25 percent higher than the average in EU countries, according to preliminary figures from the European purchasing power survey.

This marks a significant decrease from the previous year, when Norwegian prices were 43 percent above EU prices, as reported by Statistics Norway (SSB).

This decrease in price levels has implications for tourism.

As the cost differential shrinks, Norway becomes a more attractive destination for foreign visitors who may have previously been deterred by the high prices.

“The decrease in the price level in Norway compared to the rest of Europe has made it significantly more attractive for foreign tourists to holiday here with us.

“In return, it has become more expensive than before for Norwegians to holiday abroad,” Espen Kristiansen, a section manager at the SSB, said, according to the business newspaper e24.

Comparison with neighbouring countries

It must be noted that hotel and restaurant prices, which tend to be higher in Norway than in many European countries, still contribute to Norway’s overall high price level.

For these services, prices were still 43 percent higher than the EU average in 2023.

Comparatively, neighbouring Sweden’s prices were 14 percent higher than the EU average, down from 22 percent in 2022.

READ MORE: Five reasons why 2024 will be a good time to visit Norway

Denmark’s relative price level remained consistent, at 43 percent above the EU average, largely because the Danish krone is tied to the euro, unlike the Norwegian and Swedish currencies.

“Part of the explanation for the different developments in price levels in the Nordic countries is that the Danish krone follows the euro, unlike the Norwegian and Swedish ones,” Kristiansen said.

The most expensive country last year was Switzerland, with prices 74 percent above the EU average, according to the preliminary findings of the European purchasing power survey.

How a (relatively) weak krone also favours tourists visiting Norway

When travelling to Norway, tourists can still benefit from a favourable exchange rate (despite the currency’s recent uptick) even after taking inflation into account.

The weaker krone means visitors get more value for their money when exchanging foreign currency for Norwegian kroner.

READ MORE: How the weak Norwegian krone will affect travel to and from Norway

For instance, if a hotel room in Bergen costs 1,000 kroner per night, it would be around 88 euros at the current exchange rate. Three years ago, the same room would have cost approximately 100 euros.

Another example is dining out. A meal priced at 250 kroner (a main consisting of grilled salmon steak with vegetables, for example) is equivalent to 22 euros today, compared to 25 euros three years ago.

If you want a better understanding of how much cheaper a trip to Norway has become over time, you can use historical currency calculators to get a more exact estimate.

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