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Norway/Switzerland: Norway recognizes persons subject to lump-sum taxation in Switzerland as tax residents within the meaning of the DTT Switzerland/Norway

In its declaration dated June 30, 2023 (LINK Norwegian authorities), the Norwegian Ministry of Finance stated for the attention of the Norwegian tax administration that persons subject to modified lump-sum taxation in Switzerland are deemed to be tax resident in Switzerland pursuant to Art. 4 of the double taxation treaty between Switzerland and Norway (DTT Switzerland/Norway). Thus, Switzerland remains an attractive option as a country of residence for Norwegians, who may now even benefit from (modified) lump-sum taxation.

With some exceptions, most Swiss cantons continue to offer wealthy foreigners the option of taxation according to expenditure (lump-sum taxation). However, the question of residency in conjunction with lump-sum taxation often causes uncertainty when double taxation agreements are invoked. It is to be welcomed that Norway has created clarity in this respect. It is now possible for Swiss residents to reduce the Norwegian withholding tax (Kupongskatt) on dividends from Norwegian sources by 10% from 25% to 15%. The remaining 15% (base tax) should be able to be credited against the Swiss tax burden.

However, a comprehensive clarification of all circumstances of the individual case remains indispensable due to the cantonal differences.

For any further questions or advice, please contact Remo Merz, Swiss certified tax expert, merz@fineac.ch.

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Remo Merz, 31 August 2023

Keywords: Norway