Tax Treaty Case Law around the Globe 2017

S. 343Norway: The Remittance Rule in the Tax Treaty between Norway and Singapore

Eivind Furuseth

1. S. 344Introduction

In the Norway-Singapore Income Tax Treaty (1997), the source state may levy 5 %/15 % withholding tax on a dividend payment and 7 % withholding tax on an interest payment, under articles 10 and 11, respectively. However, under article 23(1), if Norway is the source state, the reduced withholding tax rate only applies if the income is remitted to Singapore and is subject to tax in Singapore.

The object of the remittance rule is to avoid double non-taxation through ensuring that Norway as a source state is only obliged to reduce its taxation to the extent that the said income is remitted to and is subject to tax in Singapore. A similar remittance rule to that in the Norway-Singapore tax treaty is included in the Norway-UK tax treaty.

The case which is analysed in this contribution concerns a judgment from Borgarting Court of Appeal, which was appealed by the taxpayer to the Supreme Court. The Appeals Selection Committee of the Supreme Court did not, however, permit further appeal to the Supreme Court.

2. Facts of the Case

In a decision from the appeal court from 6 July 2016 a couple (he...