Norway's rich struggle with taxes

Shipping billionaire Kjell Inge Rokke, former skiing legend Bjorn Daehlie and the father of soccer star Erling Haaland are among dozens of super-rich people who have left Norway in recent years.

They left because the center-left government took power in 2021 and raised the wealth tax from 0.85% to 1% for the wealthy, as well as increasing the dividend tax. Those with assets of more than $1.9 million will be taxed at 1.1%.

Norway, Spain and Switzerland are three European countries that tax net wealth. Norway also taxes unrealized gains. Business owners are the hardest hit, as they often earn modest salaries despite their highly valued companies.

“If you earn $1 million and have to pay $3 million in property taxes, it’s just not sustainable,” said Tord Ueland Kolstad, a real estate tycoon who will move to Lucerne, Switzerland, in 2022. “The system is designed to get back more than what one person produces.”

To pay property taxes that can exceed annual income, entrepreneurs often have to take money from dividends, which affects the company's ability to reinvest. Their dividends are also subject to a 37.84% tax.

“There were basically only two options: leave Norway or sell the company,” Kolstad said.

Between 2021 and 2023, more than 1,000 of Norway's richest people left the country, most moving to Switzerland. Others passed their wealth to heirs residing abroad because Norway has no inheritance tax.

Prime Minister Jonas Gahr Store criticized heirs who settled abroad, noting that taxes were something that had to be paid to ensure Norway's generous welfare system was maintained.

"When you get rich in Norway, send your children to school, benefit from the health system, drive on the roads and reap the rewards of Norwegian research without paying taxes, that is a violation of the social contract," he told parliament.

Norway is looking to tighten its “exit tax.” Starting March 20, people who move abroad will have to pay it for 12 years. The tax is 37.84% of profits made in Norway from stocks and other sources, but the tax has so far been easy to avoid or pay late.

"The aim of the law is that profits made in Norway should be taxed in Norway," said Erlend Grimstad, Norway's finance minister. "Doctors and teachers in Norway pay a large part of their income to society in the form of taxes. If they see that the richest people can avoid paying their contributions by leaving the country, it undermines the legitimacy of the tax system."

However, these arguments are not popular with the super-rich. Christer Dalsboe, a business owner, caused a stir on social media when he advised entrepreneurs not to start a business in the country.

"Don't come to Norway, we'll tax you until you're poor. When you've got nothing left, we'll tax you a little more," he sang as he sat next to the piano.

In Lucerne, Switzerland’s most populous city, Tord Ueland Kolstad says he gets several calls a week from Norwegians considering moving to Switzerland. “The flow of migrants has not stopped, it’s probably just the beginning,” he says.