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New tax treaty Norway – Norwegian pension double taxed


The Dutch Government is proud about the amount of tax treaties we have. The majority of the tax treaties have equal articles, but the one with Norway has been updated and pension payments are being treated different from other tax treaties. Moreover, the Dutch income tax return cannot cope with this change.

If you have worked in Norway for instance in the Gas & Oil industry, but you enjoy your retirement in the Netherlands, then the pension payments made from Norway to you being a Dutch tax resident become subject of two tax systems: Norway and The Netherlands.

Who can tax Norwegian pension – old style

In the previous tax treaty it was stated that Governments pensions are subject to taxation in Norway and the Netherlands should provide a double taxation relief. Other pensions paid were subject to Dutch personal income tax and no tax at source could be withheld by Norway, even though this was being done.

Who can tax Norwegian pension – new style

In the new tax treaty is not much different, however, Norway is withholding 15% income tax from the gross pension regardless of who lives where. That implies that a Dutch tax resident who received a non Government pension payment from Norway, only receives 85% in his bank account. Then he needs to report 100% to the Dutch tax office.

Officially you have to indicate if you chose for continuance of the old style instead of the new style tax treaty, as in between solution. However, Norwegian pension funds simply withheld the 15% as a no risk policy I can only assume. Moreover, the Dutch tax return does not provide any facility to make this choice known and writing the tax office to indicate you choice will not result in what you would expect.Norway double taxation Orange Tax Services

Double taxation relief – is Norway a third world country?

The non-Government pension is paid and based on the tax treaty this pension is taxed in the Netherlands, but 15% tax was already withheld. Of course you would like the Dutch income tax return to take into account what was already withheld.

Two types of double taxation relief: full relief, but that is not correct, as the income should only be taxed in the Netherlands. The other type is to inform the tax office about the actual amount of tax being withheld. This latter option is the correct option, but cannot be used. The reason for this is that only countries with the official status of third world country can use this option.

So either the name of this list should be updated or the Dutch tax return should have a third possibility to claim this 15% tax already being withheld. Neither has been done, so if you are enjoying a Norwegian non-Government pension, you have issues.

Orange Tax Services team

We have experienced the above. We used in the tax return a method that is absolutely not applicable for this situation, but it did present the outcome as it should have been. We expect a response from the Dutch tax office (rejection) that enables us to respond with the above problem.

No beauty price to be won, but if the system has not yet adapted to the change, hence we worked with an alternative method. We informed the client what we did and that he can expect a response. This response we will encounter as part of the service of filing the income tax return.

Have a Norwegian non Government pension income that was subject to 15% Norwegian income tax, do not hesitate to contact us to assist you with filing this income tax return. We will be glad to perform this service for EUR 370 incl VAT.




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