Taxes For US Expats Living In Norway – A 2023 Guide

Taxes For US Expats Living In Norway – A 2023 Guide

Norway Taxes at a Glance

  • Primary Tax Forms: Personal tax return
  • Tax Deadline: April 30
  • Currency: Kroner (NOK)
  • Population: 5.5 million
  • Number of US Expats in Norway: Approx. 9,000 US expats
  • Capital City: Oslo
  • Primary Language: Norwegian
  • Tax Treaty: Yes
  • Totalization Agreement: Yes

Living as an Expat in Norway

Home to stunning fjords and phenomenal northern lights, Norway is a beautiful place to call home. With plenty to do and explore outdoors, it’s no surprise that many US expats work in this scenic country. Norway is home to over 5.5 million people and is a popular place for digital nomads around the globe to work. And if you’re one of them, it’s essential to understand how Norway taxes for US expats work.

Taxes can already be overwhelming, but things can get more complicated when you’re on the hook for both Norway and US income taxes.

With warm, temperate weather from spring to fall and a prime position along the Atlantic Ocean, it’s no wonder many US expats settle in Norway. Known for its inventive seafood dishes and stunning 16th to 19th-century architecture, Norway is home to over 10 million people and has become a more popular destination for Americans and global travelers. And Norway’s taxes for US expats are essential to understand when living in this vibrant country.

Figuring out how much you owe in taxes can be complicated — not only do you have to pay Norway taxes, but you also have to pay US taxes. 

US Expat Taxes in Norway

When working and living abroad in Norway, you must file both your US and Norway taxes. The excellent news is Norway has a reasonably similar tax system to the United States., And since the US has a tax treaty with Norway, you won’t pay double taxes on your income.

Who has to File Taxes in Norway?

Residents in Norway have to pay income tax on all of their income domestically and worldwide. Non-residents, on the other hand, only pay income tax on certain incomes earned in Norway. Foreign income earned by non-residents is not subject to income tax in Norway.

Who Qualifies as a Tax Resident in Norway?

Since you’re taxed differently depending on whether you’re a resident or non-resident in Norway, it’s crucial to understand how to determine your residency status.

Norway Resident Qualifications

You’re considered a resident of Norway if:

  • You live in the country for more than 183 days during a particular tax year.
  • You live in the country for more than 270 days during any 36-month time period.

If either of the above applies to you, you’re likely considered a Norwegian resident, meaning all your wages are subject to income tax.

Non-resident Qualifications in Norway

If you have not lived in Norway for more than 183 days in a calendar year or more than 270 days in a 36-month time frame, you’re likely considered a non-resident in Norway. Only your Norwegian-earned wages are subject to income tax. 

If you’re a temporary foreign worker in Norway or new to Norway, you may qualify for PAYE (Pay As You Earn), which taxes you after your salary has been paid. In this instance, you do not need to file a tax return. You can opt out of the PAYE scheme if you plan to live in Norway — you’re only eligible if you’re a temporary worker or during your first year in the country.

Income Tax in Norway

General income, which includes employer wages, business income, and capital, is taxed at a flat rate of 22% in Norway. A progressive tax comes into play if you earn more than $190,350 (roughly equivalent to $18k – $19k USD). 

Here’s how the progressive income tax rate works in Norway:

Resident Income Tax Rate in Norway

On top of the flat 22% general income tax rate, the income bracket tax rates are:

Income tax bracketPersonal income bracket tax rate
NOK 190,350 – NOK 267,9001,7%
NOK 267,901 – NOK 643,8004%
NOK 643,801 – NOK 969,20013.4%
NOK 969,201 – NOK 2,000,00016.4%
NOK 2,000,001 and up17.4%

Other Tax Situations in Norway

Self-employment Tax

In addition to the standard general and personal income tax rates, self-employed individuals must pay 11.2% in self-employment tax towards Social Security contributions.

Corporate Tax

Companies in Norway pay a flat 22% tax rate on all taxable corporate profits.

Value-added Tax (VAT)

This type of tax is paid by consumers when buying goods or services in Norway. VAT is then passed on from merchants to the Norwegian Tax Administration. It’s similar to sales tax in the US.

Most items and services are subject to a flat rate VAT of 25%. Some items and services qualify for lower VAT rates, including:

  • Trains, taxis, planes – 12%
  • Hotels, boarding houses, rent – 12%
  • Grocery food items or carryout restaurant orders – 15%

Wealth Tax

Norway residents and non-residents pay municipal and state wealth taxes. The municipal rate is 0.7%, and the state wealth tax rate is 0.25% for assets over NOK 1.7 million (NOK 3.4 million for married filers). The state rate increases to 0.40% for assets exceeding NOK 20 million (NOK 40 million for married filers).

Inheritance Tax

There is no inheritance tax in Norway.

Property Tax

In Norway, property tax ranges between 1% and 4% and is determined by the municipality where the property is located.

Social Security

Employees in Norway contribute 8% of their gross monthly salary towards Social Security. Employers contribute 14.1% of each employee’s salary.

Do the US and Norway have a Tax Treaty?

Yes, Norway and the United States do have a tax treaty with the United States. This treaty helps protect US expats from double taxation on their income.

Does Norway have a Totalization Agreement with the US?

Yes, the US-Norway totalization agreement helps protect a US expat’s Social Security obligations. It functions similarly to the tax treaty, preventing expats from paying duplicate Social Security contributions to both countries.

What Tax Forms Do Americans Living in Norway Have to File?

Americans living abroad in Norway need to file income tax returns in both countries. One exception: temporary and new expats under the PAYE scheme do not need to file a tax return.

The Norwegian tax year is the same as the US: January 1 – December 31. Expats and residents of Norway will receive their tax return in March or April and must confirm the correct information, then submit the final return by April 30. You can submit your tax return online at the Norwegian Tax Administration’s website.

Get Help with Your Expat Taxes

US expats in Norway may have more complex tax returns, but we hope this guide helped you understand your tax liability. But if you still have questions or want guidance when filing your Norway tax return for the first time, we can help.

Knowledge is power. Get personalized advice from one of our expat expert accountants.

Whether you need tax advice to prepare for a move abroad, to buy property or even retire, Greenback can help. Consults upfront can help avoid costly mistakes and stress later.

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