With effect from 1 January 2018, new documentation requirement apply concerning withholding taxation of dividends from Norwegian companies to foreign shareholders at a reduced rate, compared to the ordinary rate of 25%.
The requirements will apply to dividends on both shares registered on an account of the Norwegian Central Securities Depository (VPS) and shares not registered in VPS. All shares registered on a NOM (nominee) account in VPS must be registered on an account with withholding tax rate of 25 %, unless the account operator or custodian has received the documentation described below. The new documentation requirements will also apply to shares not registered with the VPS, and must be presented to the distributing company before the dividends can be distributed with a reduced withholding tax rate. The following documentation must be available:
- For corporate shareholders: Documentation of previously received withholding tax refunds or approval from the Norwegian tax authorities that the shareholder is entitled to a reduced withholding rate (see below for approval requirements).
- For all dividend recipients: Confirmation from the dividend recipient that they are the beneficial owner of the dividend.
- A certificate of residence issued by the tax authorities in the shareholder's country of residence. Alternatively for corporate shareholders within the EAA-area, confirmation that the corporate shareholder is domiciled in an EEA country. The certificate of residence must not be older than three years at the time of the dividend payment.
Foreign custodians, who wish to have NOM accounts with withholding tax rates lower than 25 % after 1 January 2018, must apply to Central Office of Foreign Tax Affairs (COFTA) for a new permit, in accordance with the rules applying as from 2018. This also apply for permit issued to foreign custodian by COFTA, based on the current administrative practice, which will lapse from 1 January 2018.
Corporate shareholders, who have not previously received a withholding tax refund, may apply for such approval from COFTA, based on either an applicable tax treaty, or the Norwegian participation exemption rules. If no approval is obtained before the date of the dividend payment, the foreign corporate shareholder will be subject to a 25% withholding tax rate and will need to submit an application for refund of excess withholding tax.
For further information, see https://www.skatteetaten.no/en/business-and-organisation/dividends-from-norwegian-companies-to-foreign-shareholders---documentation-requirements-for-reduced-withholding-tax-rate/