Norway and Pension Withholding Tax Matters
Withholding Tax at Source on Pension Payments in Norway
Effective 1 January 2010, Norwegian tax legislation includes a legal basis to retain withholding taxes on pension payments paid to nonresidents from Norwegian sources. The tax rate is 15 percent on gross pension payments. However, Norway’s right to tax pension payments as well as the applicable withholding tax rate may be limited by the relevant double taxation treaties Norway has entered into with other countries.
Residents of other Scandinavian countries who receive pension payments from Norwegian sources will be liable to tax in Norway according to ordinary regulations.
Exemption from Withholding Tax in Norway on Certain Pension Payments
Norway will exempt from withholding tax, in cases where Norway has to waive its right to tax pension payments in accordance with the applicable double taxation treaty, certain pension payments to persons who are tax-resident in other countries. They will be exempt from Norwegian withholding tax on these pension payments if they can provide a residence certificate issued by the competent authorities of the other country which will refer to the applicable article of the double taxation treaty in place. Until presentation of such residence certificate, the Norwegian tax authorities will withhold 15 percent in taxes. Moreover, the tax authorities have confirmed that the fiscal year 2010 applications for withholding tax exemptions will be processed continuously, but taxes on pension payments will be withheld throughout the processing period until approval is granted.
It is therefore recommended to provide the Norwegian tax authorities with the respective documentation as soon as possible in order to prevent withholding tax payments on pensions in Norway.