Limited vs. Full Tax Liability in Norway: What Non‑Residents Must Know

Navigating Norwegian tax rules can be challenging for foreigners and expatriates. Understanding whether you are subject to limited tax liability or full tax liability is essential for avoiding penalties, maximizing compliance, and planning your finances efficiently. This guide explains the key differences, rules, and implications for non‑residents in Norway.

🇳🇴 What Is Full Tax Liability in Norway?

An individual is considered to have full tax liability (resident taxpayer status) if they:

• Stay in Norway for more than 183 days within a 12‑month period, or
• Spend more than 270 days within a 36‑month period.

With full tax liability, you must report and pay Norwegian income tax on your worldwide income, including employment, business, capital gains, and pensions.

🌍 What Is Limited Tax Liability?

If you don’t meet the residency thresholds, you are subject to limited tax liability. This means you only pay tax on specific Norwegian‑sourced income, such as:

• Salary from work performed in Norway
• Rental income from property located in Norway
• Pensions and benefits sourced from Norway
• Capital gains from shares in Norwegian companies

Limited liability usually applies to non‑resident workers, seasonal employees, and short‑term contractors.

📋 PAYE Scheme for Non‑Residents

Norway introduced the Pay‑As‑You‑Earn (PAYE) scheme to simplify taxation for temporary workers:

• A flat 25% rate (including social security) applies to salaries below NOK 670,000 (2024 figures).
• No deductions are available under PAYE.
• Workers using PAYE do not need to submit a tax return—the tax is final at source.

📌 How Dual Residency Is Handled

If you qualify as a resident in both Norway and another country, tax treaties (Double Tax Treaties – DTTs) decide where you are ultimately tax resident. These treaties ensure:

• Prevention of double taxation
• Allocation of taxing rights between Norway and the other country
• Access to foreign tax credits where applicable

🧾 Taxes Under Full vs. Limited Liability

Category	Full Tax Liability	Limited Tax Liability
Scope of Taxation	Worldwide income (salary, investments, pensions, business)	Norwegian‑sourced income only
Tax Return Requirement	Yes, annual filing required	Only if not under PAYE scheme
Tax Rates	22% on general income + bracket tax on personal income	Flat 25% under PAYE (includes social security)
Social Security Contributions	Yes, standard employee rates apply	Included in PAYE or calculated separately if outside PAYE

💡 Practical Tips for Non‑Residents

• Track your days in Norway to avoid accidentally triggering full residency.
• Check if you qualify for the PAYE scheme for simplified taxation.
• Review applicable tax treaties to claim relief from double taxation.
• Retain all documentation for income, housing, and travel to prove your tax position.

✅ Conclusion

Knowing the difference between limited and full tax liability in Norway is essential for financial planning and compliance. While limited liability restricts taxation to Norwegian‑sourced income, full liability means your worldwide income is taxed. By understanding the rules, using PAYE where possible, and leveraging tax treaties, you can manage your obligations effectively and avoid unnecessary costs.