- 30 Nov 2022 05:15
#15257276
This is a story from Norway, but it has implications for taxes and individual rights. For those who may not realise, Conservatives and Libertarians are very much against the concept of any "wealth tax" because it could be a very slippery slope and in many situations may not be seen as inherently "fair".
While the below is not totally clearly a wealth tax, it borders on being it.
The country of Norway is going to tax increases in the worth of investment assets owned by residents who move to another country.
That means, for example, that if you live in Norway and you invest in a company and then you could sell the investment for more money than you paid, you will be taxed on that amount of increase, even if you do not sell the investment before moving to another country.
You do not have to immediately pay the tax at the time you leave, but under the law you are obligated to pay the tax when the investment is eventually sold, even if you are no longer living in Norway. And on top of that, additional interest has to be paid if you wait until the investment is sold before you pay the tax, instead of paying the tax the same year that you change your residency to another country.
Norway modifies exit tax rules to comply with ECJ ruling | Insights | DLA Piper Global Law Firm
https://www.dlapiper.com/en/us/insights ... with-ec__/
Norway to Hit Fleeing Billionaires With Higher Exit Tax - Bloomberg, Ott Ummelas, November 29, 2022
https://www.bloomberg.com/news/articles ... triate-tax
It is a normal thing for people to be taxed on their incomes, but this scheme almost seems to go a little bit beyond that.
In my view, this is somewhere in the twilight zone between an income tax and a wealth tax.
The government seems to want to tax people before the money has been transferred to them, before they sell the investment to actually make a profit.
This is pretty much equivalent to a tax on any increases in a person's wealth, when they try to exit the country.
Keep in mind that a Norwegian resident is still legally obligated to pay this tax, even if the money used to buy the investment was earned somewhere else, and at no time did the money or investment ever exist inside the country of Norway. There will be people arrested in other countries and extradited back to Norway.
actual information in articles:
Norway to Hit Fleeing Billionaires With Higher Exit Tax
Norway is introducing stricter rules to tax expatriates amid reports that more of the country's very wealthy have moved abroad or are considering leaving.
A five-year time limit on exit tax on unrealized gains on shares and other assets will be abolished and the rules are extended "to apply to the transfer of shares to close family members living abroad," with immediate effect, the ruling Labor and Center parties agreed with their budget partner the Socialist Left on Tuesday.
The Left-leaning government has been increasing taxes on Norway's richest since it came to power last year.
When exiting Norway to another European Economic Area country, the exit tax liability can be deferred until the unrealized capital gain is realized. This was already possible for tangible assets, financial assets and liabilities, but not for intangibles and inventory. The deferral, however, will be subject to an interest charge. This interest payment was not previously required.
Deferral of the exit tax payment will not be available for exits to countries outside the European Economic Area.
The exit tax liability cannot be decreased if at the moment of realization of the asset the value of the asset is lower than at exit. This downward adjustment was previously possible for tangible assets, financial assets and liabilities, but not possible for intangibles and inventory.
Taxpayers would not be allowed a tax credit for any tax levied in the other country on the exit gain.
The exit tax liability would continue indefinitely even if many years have passed from the moment of exit till the moment of realization and even if the asset returns to the Norwegian tax net. With the former exit rule (for tangible assets, financial assets and liabilities) the tax liability expired after five years and it was not payable if the asset returned.
While the below is not totally clearly a wealth tax, it borders on being it.
The country of Norway is going to tax increases in the worth of investment assets owned by residents who move to another country.
That means, for example, that if you live in Norway and you invest in a company and then you could sell the investment for more money than you paid, you will be taxed on that amount of increase, even if you do not sell the investment before moving to another country.
You do not have to immediately pay the tax at the time you leave, but under the law you are obligated to pay the tax when the investment is eventually sold, even if you are no longer living in Norway. And on top of that, additional interest has to be paid if you wait until the investment is sold before you pay the tax, instead of paying the tax the same year that you change your residency to another country.
Norway modifies exit tax rules to comply with ECJ ruling | Insights | DLA Piper Global Law Firm
https://www.dlapiper.com/en/us/insights ... with-ec__/
Norway to Hit Fleeing Billionaires With Higher Exit Tax - Bloomberg, Ott Ummelas, November 29, 2022
https://www.bloomberg.com/news/articles ... triate-tax
It is a normal thing for people to be taxed on their incomes, but this scheme almost seems to go a little bit beyond that.
In my view, this is somewhere in the twilight zone between an income tax and a wealth tax.
The government seems to want to tax people before the money has been transferred to them, before they sell the investment to actually make a profit.
This is pretty much equivalent to a tax on any increases in a person's wealth, when they try to exit the country.
Keep in mind that a Norwegian resident is still legally obligated to pay this tax, even if the money used to buy the investment was earned somewhere else, and at no time did the money or investment ever exist inside the country of Norway. There will be people arrested in other countries and extradited back to Norway.
actual information in articles:
Norway to Hit Fleeing Billionaires With Higher Exit Tax
Norway is introducing stricter rules to tax expatriates amid reports that more of the country's very wealthy have moved abroad or are considering leaving.
A five-year time limit on exit tax on unrealized gains on shares and other assets will be abolished and the rules are extended "to apply to the transfer of shares to close family members living abroad," with immediate effect, the ruling Labor and Center parties agreed with their budget partner the Socialist Left on Tuesday.
The Left-leaning government has been increasing taxes on Norway's richest since it came to power last year.
When exiting Norway to another European Economic Area country, the exit tax liability can be deferred until the unrealized capital gain is realized. This was already possible for tangible assets, financial assets and liabilities, but not for intangibles and inventory. The deferral, however, will be subject to an interest charge. This interest payment was not previously required.
Deferral of the exit tax payment will not be available for exits to countries outside the European Economic Area.
The exit tax liability cannot be decreased if at the moment of realization of the asset the value of the asset is lower than at exit. This downward adjustment was previously possible for tangible assets, financial assets and liabilities, but not possible for intangibles and inventory.
Taxpayers would not be allowed a tax credit for any tax levied in the other country on the exit gain.
The exit tax liability would continue indefinitely even if many years have passed from the moment of exit till the moment of realization and even if the asset returns to the Norwegian tax net. With the former exit rule (for tangible assets, financial assets and liabilities) the tax liability expired after five years and it was not payable if the asset returned.
- By Rich
- By ingliz
- By Skynet