What is Utbytte (Dividend)?
Dividend paid from a Norwegian AS. When paid to a personal shareholder: taxed at effective 37.84% rate (dividend × 1.72 × 22%) above the skjermingsfradrag. When paid between Norwegian/EEA AS companies: 97% exempt under Fritaksmetoden. Dividends can only be paid from distributable equity.
Current Rate (Inntektsår 2025)
37.84% effective on personal shareholders (above skjermingsfradrag); 0.66% effective between companies (Fritaksmetoden)
Example
Firma AS pays NOK 500,000 dividend to its sole personal shareholder. The skjermingsfradrag is NOK 20,000. Taxable dividend: NOK 480,000 × 1.72 = NOK 825,600 × 22% = NOK 181,632 personal income tax. The effective rate on the NOK 480,000 net dividend is 37.84%.
How Utbytte (Dividend) works in Norway
Utbytte (dividend) from a Norwegian AS is one of the most important concepts for Norwegian business owners to understand. The tax treatment differs fundamentally depending on who receives the dividend — a personal shareholder or a corporate shareholder.
**Dividends to personal shareholders — Aksjonærmodellen**
Norway taxes dividends to personal shareholders under the Aksjonærmodellen (shareholder model). The system works as follows:
1. Each shareholder has a skjermingsgrunnlag — the cost basis of their shares, including any capital contributions and unused skjermingsfradrag from prior years. 2. A risk-free return (skjermingsfradrag) is calculated: skjermingsgrunnlag × risk-free rate (set annually, approximately 3–4% in recent years). 3. Dividends up to the skjermingsfradrag are tax-free in the personal shareholder's hands. 4. Dividends above the skjermingsfradrag are 'grossed up' by a factor of 1.72 before being included in the shareholder's alminnelig inntekt (taxed at 22%). This produces an effective marginal rate of 1.72 × 22% = 37.84%.
The grossing-up factor exists because dividends are paid from after-corporate-tax profits. The total tax burden on a krone of corporate profit distributed to a personal shareholder is: 22% corporate tax + 37.84% on the remaining 78 øre = approximately 51.5% combined.
**Dividends between companies — Fritaksmetoden**
When a Norwegian AS pays a dividend to another Norwegian or qualifying EEA AS, Fritaksmetoden applies: 97% of the dividend is exempt; only 3% is taxed at 22% (effective 0.66%). See the separate Fritaksmetoden entry.
**Distributable equity requirements**
An AS can only pay dividends from distributable equity (fri egenkapital). Distributable equity is: equity minus share capital minus required reserves minus certain unrealised gains. A dividend that reduces equity below NOK 30,000 (the minimum share capital) is not permitted. Directors who authorise an illegal dividend can be held personally liable.
**Timing**
Dividends are typically declared at the annual general meeting (generalforsamling) after the year-end accounts are approved. Interim dividends (ekstraordinært utbytte) are allowed if the board prepares an interim balance sheet showing sufficient distributable equity. The dividend is taxable in the year it is received by the shareholder.
Related terms
Norwegian system for taxing dividends and capital gains for personal shareholders of AS companies. Dividends and gains above a risk-free return (skjermingsfradrag) are grossed up by 1.72 and taxed at 22%, producing an effective rate of 37.84%. Dividends below the risk-free threshold are tax-free.
Norwegian participation exemption. Dividends and capital gains between qualifying Norwegian and EEA companies are 97% exempt from tax (3% included at 22% = effective 0.66% tax). Prevents cascade taxation in corporate groups. Does not apply to non-EEA companies in low-tax jurisdictions.
Norwegian private limited company. The most common business structure for active trading. Minimum share capital NOK 30,000. Registered with Brønnøysundregistrene (BRREG). Shareholders have limited liability — personal assets are protected.
Dividend paid from a Norwegian AS. When paid to a personal shareholder: taxed at effective 37.84% rate (dividend × 1.72 × 22%) above the skjermingsfradrag. When paid between Norwegian/EEA AS companies: 97% exempt under Fritaksmetoden. Dividends can only be paid from distributable equity.
Confused by Norway accounting jargon?
AccountsOS explains Norway terms in plain English and applies the right rules to your books automatically.
Try Free