Interest Income and Taxation of Investments in Norway

Earning interest and returns from savings, bonds, and investments is common in Norway, but many taxpayers overlook how these are taxed. Understanding the Norwegian rules for interest income and investment taxation ensures compliance and helps you plan smarter. This blog explains what counts as interest income, how it’s taxed, and strategies to reduce your tax liability in 2025 and beyond.

💰 What Counts as Interest Income in Norway?

In Norway, interest income is broadly defined and taxable under general income at a flat rate of 22%. Examples include:

• Bank account interest (savings or checking).
• Interest on bonds, debentures, or treasury bills.
• Returns from certificates of deposit (CDs) and other fixed-term savings products.
• Interest from private loans or lending arrangements.

📊 Taxation Rules for Interest Income

All net positive capital income, including interest, is taxed at 22%. Key points:

• No tax-free threshold: Even small amounts of interest must be declared.
• Annual taxation: Interest is taxed in the year it accrues, not when received.
• Foreign accounts: Interest from foreign banks is taxable in Norway (with potential foreign tax credit).
• Joint accounts: Interest is split between account holders based on ownership share.

📈 Investments and Taxation

In addition to interest income, other investments are taxed as follows:

• Dividends and Share Gains: Adjusted upward by 1.72 before applying the 22% tax rate. Effective rate: 37.84%.
• Bonds and Fixed-Income Securities: Interest is taxed as general income at 22%.
• Mutual Funds: Returns are split between share income (subject to adjustment) and interest income (taxed at 22%).
• Foreign Investments: Taxable in Norway, with possible credit for taxes paid abroad under tax treaties.

📌 Deductible Expenses Against Investment Income

To reduce taxable income, you may deduct:

• Interest expenses on loans (including mortgages) — deductible regardless of loan purpose.
• Management fees for certain investment accounts.
• Losses on capital investments, provided gains would have been taxable under similar conditions.

💡 Example Calculation

A taxpayer earns NOK 15,000 in bank interest, NOK 20,000 in dividends, and pays NOK 8,000 in loan interest:

• Interest income: NOK 15,000 × 22% = NOK 3,300
• Dividends: NOK 20,000 × 1.72 × 22% = NOK 7,577
• Interest expense deduction: NOK 8,000 × 22% = saves NOK 1,760

Total net tax on investments = NOK 9,117.

📅 Filing and Compliance

• Interest income is usually pre-filled in your Skatteetaten tax return, but verify amounts carefully.
• Foreign interest and investment income must be manually declared.
• Documentation (bank statements, dividend reports) must be kept for five years in case of audit.

✅ Tips for Reducing Your Investment Tax Burden

• Consider ISAs (individual savings arrangements) or tax-efficient investment funds available in Norway.
• Use deductible loan interest strategically to offset taxable returns.
• Report losses to carry forward and offset future gains.
• Consult a tax professional for complex portfolios, especially if you hold foreign investments.