![norway flag](https://y-tax.co.il/wp-content/uploads/2020/04/norway@2x-100.jpg)
UTC:
Capital City:
Language:
Population:
Currency:
Country Code:
Domain:
+2
Oslo
Norwegian and Sami
5.5 million
Norwegian Krone (NOK)
+47
.no
Israel – Norway relations
Israel and Norway established their diplomatic relations in 1950, a year after Norway officially recognized the state of Israel. Both nations regularly hold political consultations and are committed to working together on trade, science, innovation, and development. Furthermore, both countries have entered into significant bilateral agreements, highlighting the positive diplomatic and friendly relationship between the two nations. As an example, the Agreement on Agricultural Products was signed by countries on November 2018.
Israel and Norway participate in research programs such as European Union Horizon 2020 and other national initiatives. The Norwegian Pension Fund Global has invested more than 12.9 billion NOK in Israeli businesses. They also have a shared interest in oil and gas as energy resources.
Details about Israel’s embassy in Norway
Address: Parkveien 35, PB 4046 AMB, 0244 Oslo, Norway
Phone: 21 01 95 00
Website: Click Here
Email: Info@oslo.mfa.gov.il
Details about Norway Embassy in Israel
Address: Ramat Aviv Mall, 9. floor, 40 Einstein St., Tel Aviv POB 17575, 6117501 Tel Aviv
Phone: +972(0)3 7401900
Website: Click Here
E-mail: emb.telaviv@mfa.no
Business Activity in Norway
Norway’s success comes from wisely managing its natural resources. Today, Norwegian businesses are creating cutting-edge technology in many fields, working closely with research communities. Norway’s GDP is expected to increase by 0.5% this year, with a per capita GDP of $461 million.
Norway has a small, open economy that relies heavily on international cooperation. The Norwegian approach emphasizes equality and teamwork, with senior management being accessible in both political and business settings.
Tourism is a huge resource for Norway’s economy, making up more than 6% of its GDP. Moreover, Norway is in the first position when it comes to the green technologies and environmental transportation, emphasizing electric engines and the creation of a new kind of batteries. Government initiatives and research programs strongly encourage and support this innovation.
Bilateral Agreements between Norway and Israel:
- Double Taxation Agreement
- Agreement on Agricultural Products
Convention on the Prevention of Double Taxation
The agreement between the Governments of Israel and Norway regarding the avoidance of double taxation was signed in November 21, 1966 and entered into force on March 31, 1965.
To read the agreement in English click here.
Applicability of the MLI
Both Norway and Israel have signed the “Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting” (MLI). Israel signed the agreement on June 7, 2017, and ratified it on January 1, 2019. Norway also signed the MLI on June 7, 2017, and a ratified it on July 17, 2019.
Residency for Tax Purposes in Norway
Residence of an Individual
Individuals who reside in Norway for a period of 183 days in a year or 270 days during three years, are considered tax resident. For calculation purposes in Norway, all days are included in the calculation.
To read about how an individual is considered a resident of Israel, click here.
Residency of a Company
A company is considered tax resident in Norway if it is established under the Norwegian tax law, or its effective management is conducted in Norway. Factors that determine the effective management include board and daily management to be conducted in Norway.
To learn about how a company is considered a resident of Israel, click here.
The Tax System in Norway
Norway’s Tax Authority is called Skatteetaten.
Income taxation: 22%
Taxation of companies and branches: 22%, 25%
VAT: 0%, 12%, 15%, 25%
Capital gains tax: 22%
Withholding Tax
| Norway Internal Tax Rate | Israel Internal Tax Rate | Treaty Withholding Tax |
Personal Income tax (Tax brackets) | 22% | Up to 50% | |
Corporate income tax | 20%, 25% | 23% | |
Capital gains tax rate | 22% | 25%-30% (plus exceptional income tax for high earners at 3%) | |
Branch tax | 20%, 25% | 23% | |
Withholding tax (Non-Resident) Dividends | 25% | 25% or 30% | 15% |
Interest
| 15% | 15%/25%/23% | 15% |
Royalties | 15% | 23%-40% | 15% |
VAT
| 0%, 12%, 15%, 25% | 17% |
Relocation to Norway
There are several reasons why an individual or investor might relocate to Norway. For example, its strong, diverse economy and trust-based industrial culture contribute to its high rankings in political and social stability, environmental performance, and ease of doing business. The country has excellent digital infrastructure, universal internet and mobile coverage, and proficient technology professionals.
Even though Norway is not a member of the European Union, it still has access to the European market. The quality of life is high, with great public safety, a commitment to gender equality, and family-friendly laws. The education and healthcare systems are top-quality and accessible to everyone.
The Norwegian workforce is productive, qualified, and independent, which improves operational efficiency for businesses. Additionally, 98% of Norway’s electricity comes from renewable sources, supporting sustainability practices.
There are around 1,400 Jews living in Norway today. The community has its own magazine and schools and regularly organizes seminars, camps, and activities.
Real Estate Taxation in Norway
In Norway the property value is the market value of a residential property calculated by the Tax Administration. It is determined by multiplying the size of the property (primary area) by the price per square meter provided by Statistics Norway (SSB).
The taxable value for primary homes in Norway is 25% of the property value for those under 10 million NOK, while for properties exceeding 10 million NOK, it is 70% of the value. The taxable value for secondary properties is the same as the market value. The sale tax or any income generated from the rental of the property is taxed at 22%
Transfer of Funds from Israel to Norway
According to section 170(a) of the Israeli income tax ordinance, any transfer of payment to a non-Israeli resident is subject to 25% of withholding tax. The tax authority can allow, under certain circumstances, to reduce or dismiss the withholding tax. Our firm handles withholding tax matters with the Israeli Tax Authority.
Due to the fact that both countries have a tax treaty with each other, one can submit a declaration form (2513/2 form – Statement regarding a payment to a foreign resident that is exempt from withholding tax), and under certain circumstances, there is a possibility to transfer the payment without the withholding tax and the approval of the Tax Authority.
In providing advice regarding the transfer of money abroad, in addition to the issue of withholding tax, our office handles the requirements of the foreign banks, such as an accountant’s approval regarding the payment of taxes and examines additional actions required in light of the uniform standard of CRS between the countries – automatic exchange of information between countries which is carried out first through the banks and then between the tax authorities of each two countries.
The banks raise many difficulties and charge high fees for converting shekels into other currencies, so it is important to consult before transferring the funds – Contact us.
For more information on money transfers abroad, click here.
Types of Business Entities in Norway
Most common business entities in Norway include:
Private Limited Company
Private Limited companies in Norway are a popular choice among small and medium businesses. It needs at least one shareholder, and half of its board members to reside in Norway, the EU, or the EEA. The minimum share capital needed is 30,000 NOK.
Public Limited Company
A Norwegian public limited company allows business to raise funds by selling stocks to the public, while offering this way shareholder protection and access to significant capital funds.
The major shares should be at least 1 million NOK, there must be at least one shareholder, and at least half of the board of the company should be from Norway, the EU, or the EEA.
Sole Proprietorship
In Norway, a sole proprietorship is an ideal business structure or individual entrepreneurs starting small firms. It is easy to set up and gives the owner total management control and full responsibility for debts.
Branch of a Foreign Company
A branch in Norway is an extension of a foreign parent firm. It is easier and cheaper to open in comparison to a new company, and it is only taxed on income generated in Norway. The branch is completely controlled by the parent company.
Incentive Laws in Norway
Norway offers tax incentives to businesses, allowing them to balance international taxes with Norwegian taxes on the same revenue, and carry over unused credits for up to five years. In addition, double tax treaties allow citizens to avoid paying double taxes on foreign income.
The Ministry of Finance also offers tax benefits for asset transfers between group entities. The Norwegian Parliament has passed a law that restricts counties and municipalities to charge maximum 70% of the toll price for fossil fuel cars.
Double Tax Treaties in Norway
Albania | Canada | Gambia | Jamaica | Morocco | Senegal | Saba | Zimbabwe |
Argentina | Chile | Georgia | Japan | Nepal | Serbia | Tanzania | |
Australia | China | Germany | Kazakhstan | Netherlands | Sierra Leone | Thailand | |
Austria | Croatia | Greece | Kenya | New Zealand | Singapore | Trinidad and Tobago | |
Azerbaijan | Cyprus | Greenland | Latvia | Nordic Treaty | Slovak Republic | Tunisia | |
Bangladesh | Czech Republic | Hungary | Lithuania | Pakistan | Slovenia | Turkey | |
Barbados | Curacao | Iceland | Luxembourg | Philippines | South Africa | Uganda | |
Belgium | Denmark | India | Macedonia | Poland | Spain | Ukraine | |
Benin | Egypt | Indonesia | Malawi | Portugal | Sri Lanka | United Kingdom | |
Bosnia and Herzegovina | Estonia | Ireland | Malaysia | Qatar | Sweden | United States | |
Brazil | Faroe Islands | Israel | Malta | Romania | Switzerland | Venezuela | |
Bulgaria | Finland | Italy | Mexico | Russia | Vietnam | ||
Bonaire | France | Ivory Coast | Montenegro | Republic of Korea | Zambia |