Norway Sees Exodus of Wealthy Tax Refugees Headed for Switzerland
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The so-called “rich flight” that leads to painful losses in Norwegian state coffers has triggered criticism from Prime Minister Jonas Gahr Støre, who called it a breach of the social contract, and even calls from more radical Norwegian MPs for Switzerland to be punished.Norway, one of Europe’s most well-to-do countries, has in recent years seen a stampede of wealthy citizens moving to Switzerland, another fixture on the list of Europe’s richest. The reason? Tax hikes in Norway and overall discouragement over its annual tax on net worth.Over the recent decades, public tax lists and the National Population Register have logged 44 relocations to Switzerland since 2009, with 22 of them this year alone and a few others are pending. Although this may seem small beer, the opposite is true.The marked increase this year alone accounted for an estimated NOK 40Bln ($4Bln) in taxable net worth leaving Norway, with the actual market value of personal fortunes being much higher — a painful loss for its state coffers..Barely this autumn, Norwegian tycoon Kjell Inge Røkke, who is worth nearly $5Bln announced his move to Switzerland, followed by battery millionaire Tore Ivar Slettemoen in late October.Norway’s so-called “fortune tax” has been controversial for years, especially after the Labor Party took power and started increasing the tax burden on the wealthy, which is a staple of left-wing policy.To indicate the scope of the problem, those leaving Norway to avoid the tax were lambasted by Prime Minister Jonas Gahr Støre, himself the owner of a large taxable fortune. Among other things, he called the exodus a “violation of the Norwegian social contract that makes it possible to build large fortunes in Norway”.
WorldNorway Accused of ‘Profiting Indecently’ From Energy Crisis Pummeling Europe17 September, 12:47 GMTReds Party MP Mimir Kristjansson minced no words as he called for broad EU-level countermeasures against Switzerland. According to him, the “rich flight”, which is a pan-European problem, undermines the entire welfare model, which is all the more painful for countries less wealthy than Norway.
“The problem is not Norway or the Norwegian tax system. The problem is Switzerland. The country's business model is, after all, a high degree of secrecy combined with low taxes. Therefore, Europe must gather around some form of measures or punitive measures against Switzerland,” Kristjansson insisted to Norwegian media.
Kristjansson even mused that a punitive tax on goods from Switzerland may be in store, but only as part of a broad European approach.The Swiss embassy released a memo stating that the main reason Switzerland is referred to as a “tax haven” in certain circles is its “moderate tax rates, compared to other countries”. According to the memo, the Swiss constitution requires the government to “limit excessive spending, national debt and, consequently, tax increases”, which, in turn, allows it to offer “very favorable conditions for investors, companies and individuals”.
