Nearly half are unaware that foreign income and assets must be reported in the tax return

Do you own a holiday home overseas? Perhaps you hold securities or have a bank account in another country? If so, you are not alone in being uncertain about what must be included in your Norwegian tax return. In a recent survey conducted by Opinion on behalf of the Norwegian Tax Administration, only slightly more than half of respondents answered “yes, always” when asked whether they knew that income and assets held abroad must be reported in the Norwegian tax return.

“It is becoming increasingly common for people to have income or assets in another country as their lives become more international. This applies both to those with personal ties to another country and to Norwegians who have worked for a foreign employer, studied abroad, or purchased a holiday property overseas. Most people probably want to comply with the rules but may be uncertain about the regulations,” says Director of Taxation Nina Schanke Funnemark, emphasizing that everything must be reported in the tax return, including smaller amounts.

Uncertainty about reporting obligations

In the survey, 55 percent stated that income and assets held abroad must always be reported to the Norwegian Tax Administration, while 33 percent said they did not know, and 11 percent incorrectly believed that foreign income and assets do not need to be reported in the tax return. The Norwegian Tax Administration estimates that a significant proportion of taxpayers in Norway have financial interests abroad.

“You are required to disclose all income and assets in your Norwegian tax return. In many cases, the income or assets will also have been taxed abroad. The Norwegian Tax Act and tax treaties with other countries provide effective mechanisms to prevent double taxation. If this applies to you, you must still include the information in your tax return,” the Director of Taxation explains.

More guidance in the tax return

Norway has entered into international agreements on the exchange of information with tax authorities in other countries. Through these agreements, the Norwegian Tax Administration automatically receives financial information about individuals who are tax resident in Norway. A total of 109 countries committed to exchanging information in 2021. The Norwegian Tax Administration receives such information regarding more than 350,000 individuals in Norway.

This year, more taxpayers with financial interests abroad will be offered enhanced guidance when they log into their tax return.

“Those who receive this service will see a notification that the Norwegian Tax Administration has received information about assets they hold in another country. This information is not pre-completed in the tax return, but with a single click you can insert the correct amount into the return. In this way, it becomes easier to report what you are legally required to disclose,” explains Schanke Funnemark.

Taxpayers who receive this guidance will be able to view the information that another country has reported to the Norwegian Tax Administration and will have the opportunity to enter it directly into their tax return. The taxpayer must still complete the relevant details and amounts, with guidance provided within the tax return itself.

Everything must be reported

If you receive income from or own assets in another country, you are personally responsible for ensuring that all such information is reported in your tax return. This applies even if the information is not included in the pre-completed tax return provided by the Norwegian Tax Administration. All income earned and assets held worldwide must be reported in the Norwegian tax return.

“Even if the values or amounts involved are not substantial for everyone, the law is clear: everything must be reported,” the Director of Taxation emphasizes.

You can correct previous years

The most important thing is to ensure that all foreign assets and income are reported in your tax return now and in the future. However, if you have previously failed to disclose financial interests abroad, you may amend your tax return yourself for the three most recent income years. If you need to go further back, it may be relevant to know that the Norwegian Tax Administration also operates a voluntary disclosure scheme.

Source: Norwegian Tax Administration