New guidelines for deferred payment of exit tax under Norwegian tax law

Eligible taxpayers can choose between two arrangements for deferral of the exit tax for up to 12 years: (1) an interest-free instalment plan where exit tax is paid in 12 equal annual payments, or (2) a single lump-sum payment at the end of the 12-year deferral period.

Both deferral options generally require taxpayers to provide adequate security (such as bank guarantees or assets pledges) for their tax obligations and potential interest charges. However, taxpayers relocating to other EEA countries benefit from a more lenient approach – security is only required when the Tax Administration determines is a "real risk" that the tax debt cannot be collected. The Tax Administration primarily evaluates this risk based on existing collection agreements with the destination country and the taxpayer's payment history.

When taxpayers offer the assets subject to exit tax as security, the Tax Administration will generally accept this security without conducting detailed valuations or suitability assessments of the asset. However, the Tax Administration will ensure that security agreements include proper legal safeguards to prevent unauthorised transfers or seizure by other creditors during the deferral period.

For EEA relocations, the guidelines establish several criteria for evaluating whether a taxpayer's payment history indicates "real risk" of non-collection:

• Timing of past defaults: Current outstanding tax debts at the time of application clearly indicate "real risk". Generally, tax defaults older than five years carry less weight in the assessment, though serious cases involving deliberate asset concealment or tax evasion remain relevant regardless of when they occurred.
   
• Frequency of defaults: A single isolated payment default from an otherwise compliant taxpayer typically does not indicate "real risk". However, a pattern of regular or repeated defaults suggests genuine concerns about the taxpayer's ability to pay.
   
• Duration and nature of defaults: Brief payment delays carry less weight than cases that require formal enforcement action. Defaults stemming from apparent unwillingness to pay are viewed more seriously than those caused by temporary liquidity problems or administrative errors.
   

While taxpayers who own property in Norway at the time of their deferral application might appear to present lower collection risk, the guidelines note this factor has limited relevance. This is because during the 12-year deferral period, property owners can freely sell or transfer their Norwegian assets, potentially eliminating this apparent security.

If you are considering relocating abroad and may be subject to exit tax, we recommend contacting our office well in advance of your planned departure date. Early planning allows us to evaluate your eligibility for deferral arrangements, assess security requirements, and structure your relocation to optimise tax outcomes under these new guidelines.