Norway Investment Income Guide

Dividend Taxation — 22% with Skjermingsfradrag

• Gross dividend: Dividends paid by Norwegian AS/ASA companies to individual shareholders are included in alminnelig inntekt (ordinary income) and taxed at 22%. The company first withholds 22% dividend withholding tax (kildeskatt på utbytte), which is then credited against the shareholder's final tax liability — making the system a withholding mechanism rather than an additional tax.
• Skjermingsfradrag (risk-free allowance): Only the net dividend exceeding a calculated allowance is taxed. The allowance is: acquisition cost × risk-free interest rate (set annually by Skatteetaten, approximately 3–5% for 2026, based on the Norwegian government bond yield plus a small margin). For example: if shares were purchased for NOK 100,000 and the risk-free rate is 4%, the annual allowance is NOK 4,000. A dividend of NOK 8,000 results in taxable income of only NOK 8,000 − NOK 4,000 = NOK 4,000, taxed at 22% = NOK 880.
• Accumulated allowance: Unused skjermingsfradrag from prior years accumulates (increases the allowance base). This is important for shareholders in companies that retain earnings rather than paying dividends — the accumulated allowance grows each year, sheltering future larger dividends from tax.
• Foreign dividends: Dividends from foreign companies are also taxable at 22% with skjermingsfradrag. Foreign withholding tax (typically 15–30%) may be credited under Norwegian domestic rules or a tax treaty, subject to the foreign tax credit limitation. The credit cannot reduce Norwegian tax below zero.

Interest Income — 22% Flat Rate

• Taxable interest: All interest income — from bank deposits, bonds, notes, loans, peer-to-peer lending, and other debt instruments — is fully taxable as ordinary income at 22%. There is no allowance or exemption for interest income (unlike dividends with the skjermingsfradrag).
• Accrual basis: Interest is taxed on an accrual basis — i.e., the interest earned during the year is taxable, even if not yet paid to the account. Bank interest is typically reported by the bank to Skatteetaten and pre-filled in the tax return. Bond coupon payments are taxed when accrued.
• Zero/low-interest accounts: Even accounts paying zero interest are subject to wealth tax (formuesskatt) on the deposit balance, but no income tax accrues. This makes cash holdings tax-neutral for income tax but potentially costly for wealth tax.
• Negative interest: In a negative interest rate environment (not the case in Norway in 2026), negative interest on deposits is theoretically not deductible (it is not "interest income" but rather a charge). This remains a niche issue as Norwegian banks again pay positive deposit rates following the rate normalisation cycle.

Comparison of Investment Income Types

• Bank savings: Interest income taxed at 22%. Wealth tax applies to the full deposit balance. Effective after-tax return on a 5% deposit rate: 5% × (1 − 0.22) = 3.9% after income tax, less wealth tax of 0.45% on the principal if above the threshold.
• Dividend (equities): Effective rate depends on the skjermingsfradrag. For a share yielding 5% annual return, with skjermingsfradrag of 4% on cost basis, the taxable fraction of dividends is approximately 20% of the yield (= (5% − 4%) / 5%). Effective tax on dividend yield: 20% × 22% = 4.4% of the dividend, or 0.22% of the principal annually (plus wealth tax).
• Bond income: Interest taxed at 22%. Bond prices also generate capital gains/losses on sale. If held to maturity, no capital gain — only interest. Wealth tax applies to the bond's market value.
• Rental income: Net rental income (rent minus expenses, maintenance, and 2% depreciation) taxed at 22%. No trinnskatt. See our Property Tax Guide → for details.

Tax-Favoured Savings Products

• ASK (Aksjesparekonto): A tax-sheltered share savings account introduced in 2017. Under ASK, dividends and capital gains within the account are tax-free on accumulation — tax is only paid when amounts are withdrawn (transferred from the ASK to a regular bank account). Withdrawals are taxable as ordinary income at 22% (with skjermingsfradrag). Maximum deposit limit: approximately NOK 2 million (2026, including unrealised gains). Foreign shares generally cannot be held in an ASK — only Norwegian and EEA-listed shares.
• IPS (Individuell Pensjonssparing): Individual pension savings account — contributions are deductible at the marginal tax rate (up to 22% reduction) up to approximately NOK 15,000 per year. Investment returns within the IPS are tax-free on accumulation. Withdrawals are taxed as pension income at the applicable marginal rate. The funds are locked until retirement (age 62–75). IPS is offered through banks and fund managers.
• BSU (Boligsparing for Ungdom): Housing savings for young people (age 18–34). Up to NOK 27,500 per year is deductible at the municipal rate (approximately 22%), with a maximum total deposit limit of approximately NOK 330,000. The savings are intended for a first home purchase — withdrawal triggers tax recapture unless used for a qualifying home purchase.

For capital gains tax on share sales and the oppjustering mechanism, see our Capital Gains Tax Guide →. For wealth tax on investment assets, see our Wealth Tax Guide →. For the taxation of corporate dividends through the fritaksmetoden, see our Corporate Tax Guide →.