Kildeskatt

Kildeskatt, or withholding tax, is a tax collected at the source of payment on certain cross-border incomes. It is designed to secure taxation of income earned from a country’s sources when the recipient is not subject to taxation there or is taxed at a reduced rate through international agreements. In Norway, kildeskatt is administered by the tax authority and applies to payments such as dividends, interest and royalties paid from Norwegian sources to non-residents, and in some cases other payments to foreign entities.

The payer of the income is responsible for deducting the tax at the applicable rate before the funds are paid out. The retained amount is remitted to the tax authority, and the recipient may receive documentation of the withholding. Rates vary by type of income and can be reduced or eliminated under double tax treaties or domestic exemptions. If the recipient is entitled to treaty relief or a refund, they or the payer may claim the appropriate adjustment through the tax authority or the recipient’s home jurisdiction.

Kildeskatt is distinct from ordinary self-assessed income tax, because it is collected at the time of payment rather than through an annual tax return. It affects cross-border transactions and international financing, licensing, and investment income. The framework aims to prevent tax evasion and ensure that income derived from a country’s sources contributes to public revenue, while allowing relief through treaties where appropriate.