The relocation tax is not a new tax, and it is neither an entrepreneur’s tax nor a hidden form of inheritance tax. Disinformation that creates an incorrect image of fear is irresponsible and harmful, writes Trygve Slagsvold Vedum.
– by SP leader and finance minister Trygve Slagsvold Vedum
(this post was also printed in DN 8 May -24)
In an interview about the government’s proposal for an expatriation tax in DN on 2 May, two representatives from the Conservative Party are asked whether they support the call that foreign entrepreneurs should not come to Norway. Their answer is “yes.”
It is irresponsible for Storting politicians from the Conservative Party to encourage foreign investors to stay away from Norway. Such statements are potentially devastating for Norway’s reputation, the Norwegian economy and Norwegian jobs.
It is not better that the two Conservative politicians base their criticism of the government on premises they should know are misleading.
The government is keen to facilitate the greatest possible overall value creation, and we cheer for value creators in both small and large companies, established and newly started ones. We have also emphasized this when drafting the proposal for adjustments to the relocation tax that we recently put forward.
In order for us to have an orderly debate about relocation tax going forward, it is important that we base the following facts on:
The relocation tax is not a new tax
Various actors give the impression, consciously or unconsciously, that the government is proposing to introduce a new tax for people who want to move from the country. This is completely wrong. Transfer tax has existed in one form or another for over 30 years
The government does not propose the introduction of an entrepreneur’s tax
We have not proposed a separate tax for entrepreneurs. The transfer tax treats all shareholders who move out equally, whether they are entrepreneurs or other types of investors, but only in cases where the increase in value in Norway exceeds NOK 500,000.
We should all be grateful to all those who want to invest in Norway. We must have great respect for the fact that everyday life for an entrepreneur can be a struggle financially and that liquidity can be a challenge. Should an entrepreneur or others change their tax residence to another country, so that expatriation tax becomes applicable, we suggest a generous deadline for payment of 12 years after tax expatriation.
It is also important to be aware that you can spend a lot of time outside Norway, for example to contribute to the establishment of branches, without changing your tax residence. Similarly, it is not automatic for foreign persons who want to contribute to a Norwegian start-up company to change their tax residence to Norway.
As long as the tax residence is unchanged, no relocation taxation will ever occur.
I have the impression that some of the concerns that have come forward are based on misunderstandings of the content of the proposal, and that there is less cause for concern than the immediate reactions would suggest. DN’s finance editor Terje Erikstad points this out in a good way in his comment “Don’t tax me, my values are artificially high!”.
Even if one disagrees with the government’s changes, we all benefit from there being no unfounded concerns.
My appeal is to familiarize yourself well with the government’s proposal, and come up with input, thoughts and concerns in the hearing, which has a deadline of 21 May. They will be thoroughly assessed before a proposal is presented to the Storting in the autumn.
Transfer tax is not a hidden form of inheritance tax
There is no inheritance tax in Norway, nor have we proposed any new inheritance tax. The proposal involves no hidden form of inheritance tax, as some have claimed.
That fixed transfer tax should fall due upon the shareholder’s death also applied before the consultation proposal. The background is that both realization and death after moving out mean that the shares are no longer kept by the shareholder. The only thing we have done now is to clarify this in the legal text.
The big question going forward should be whether Norway needs clear rules for the taxation of people who have earned large sums in this country, and who change their tax residence to another country. And why do we need it, or why don’t we need it?
I think the answer to the question basically revolves around what kind of country we want Norway to be. My answer is that I want Norway to continue to be one of the world’s best countries to live in, where we continue to take care of a unique community that has been built up over generations. A community that offers opportunities for everyone, but which also entails a duty to contribute while living here.
An important prerequisite for this is that values created by persons living in Norway, with good help from the Norwegian community, are taxed in Norway.
It is of course perfectly legal for both the Conservative Party and everyone else to disagree with the government’s proposal for changes to the expatriation tax, and it is legitimate to fight for reduced tax for people with large assets. But the battle cannot be fought with disinformation that creates an incorrect image of fear.
It is irresponsible, and in the worst case can affect Norway’s reputation, the Norwegian economy and Norwegian jobs.
Tags: Misinformation expatriation tax harm Norway
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