Norway and the United States have signed a memorandum of understanding whereby the two countries will share tax information, meeting requirements of the U.S.'s Foreign Account Tax Compliance Act (FATCA) as well as Norwegian reporting obligations.
The agreement, signed earlier this week, allows Norwegian financial institutions to report information about U.S. account-holders to national tax authorities, which then pass the information on to U.S. authorities. Likewise, Norwegian authorities will receive information about Norwegian taxpayer accounts in U.S. financial institutions from the U.S. authorities.
The agreement will be submitted to the Norwegian Parliament for final approval and is expected to enter into force by Sept. 30, 2015, according to the memorandum.
For all intents and purposes, the agreement is akin to the one struck between the U.S. and France, Germany, Italy, Spain and the United Kingdom last February. Since then, separate bilateral agreements have been fostered between the U.S. and Denmark, Mexico, Ireland and Switzerland.
Japan has announced a formal commitment to signing a similar agreement, and talks in other countries have emerged as well, reportedly including Australia.
FATCA, signed in 2010 as part of a larger tax act, compels foreign banks and financial institutions to report directly to the Internal Revenue Service (IRS), the U.S. tax authority, information about U.S. account-holders. Institutions that do not comply are subject to a 30% withholding tax on U.S.-originated payments.
Institutions in countries where bilateral agreements have been signed are exempt from the withholding tax penalties but must report information about U.S. account-holders directly to their local tax authorities.