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A typical bit of Forbes scaremongering. According to the local the threshold for share gains is 3 million kr, about 300 thousand USD. You only pay the exit ta

A typical bit of Forbes scaremongering. According to the local the threshold for share gains is 3 million kr, about 300 thousand USD. You only pay the exit tax on amounts above that. "Those subject to the tax will have to address their tax obligations related to gains exceeding 3 million kroner on shares acquired during their time in Norway. They will have several options to fulfil this obligation, including immediate payment, interest-free instalments spread over 12 years, or deferred payment with accrued interest. The changes are part of the government's efforts to counter the recent outflow of wealth from Norway, with Switzerland being a popular destination for tax exiles." https://www.thelocal.no/20241007/whats-the-latest-on-norways-plans-for-an-exit-tax https://www.thelocal.no/20241007/whats-the-latest-on-norways...

dosinga 2y ago
Yeah, but I think the point is that this applicable on unrealized capital gains too. So if I start a company in Norway, raise a bunch of money and then move to the US because the company wants to have a presence there, I now have to pay the tax on the basis of the money raised; It's quite common for a reasonable successful founder to be worth millions on paper while having no cash.
- christkv 2y ago
  It is and the effect is immediate and destructive to any value creation in startups. It basically forces companies to leave before raising any serious money or founders will end up with tax bills that have to be paid out of investment money
  - consteval 2y ago
    Or just staying in the country, thereby bolstering their economy. Which is almost certainly the end goal. I mean, it kind of sucks if these countries provide the tools to create successful businesses and then those businesses just move to cheaper countries. You're kind of getting screwed over. Countries invest too. In their economy. Providing high quality education at a low price is a huge investment, for example. It's not a good deal if citizens take that and you don't get a return on your investment, i.e. they're not creating innovative companies in your country.
- jplrssn 2y ago
  On the other hand, not taxing unrealized capital gains on exit would effectively create a loophole by which it would be possible to avoid taxation simply by moving to a tax haven for a while and realize the gains there.
joelwilsson 2y ago
The Forbes article is from April, while The Local article you're quoting is from October. Back in April, the proposal was different, as The Local explains. And the biggest problem for startup founders remains: you're taxed, on leaving the country, on unrealized gains. Being taxed on 5 millions of profit sounds fair, being taxed on 5 millions (or 30 millions) of valuation used for raising capital, in a startup that then fails and is worth nothing after a few years, maybe not so much. Neighboring countries do not have this kind of taxation.
olieidel 2y ago
Not at all. As soon as you get VC money, your valuation likely is in the millions, and then you're already way beyond the threshold. Good luck with the exit tax then. Many sub-aspects of this are debatable, of course: Is VC money good? Are high startup valuations good? Also: Sure, you can defer the payment, you can pay it later with interest, etc., etc. But that's besides the point. The problem here is: Once your startup reaches a high valuation, exiting the country, for whatever reason, will become difficult. And this might happen for rather innocuous reasons: Temporarily moving to the US to open up a subsidiary, staying there > 180 days / year? --> Exit tax. Etc. The number of second-order consequences is high, and I'd wager most of them are not good if your goal, as a country, is to foster a startup ecosystem.

dosinga 2y ago

Yeah, but I think the point is that this applicable on unrealized capital gains too. So if I start a company in Norway, raise a bunch of money and then move to the US because the company wants to have a presence there, I now have to pay the tax on the basis of the money raised; It's quite common for a reasonable successful founder to be worth millions on paper while having no cash.

christkv 2y ago
It is and the effect is immediate and destructive to any value creation in startups. It basically forces companies to leave before raising any serious money or founders will end up with tax bills that have to be paid out of investment money
- consteval 2y ago
  Or just staying in the country, thereby bolstering their economy. Which is almost certainly the end goal. I mean, it kind of sucks if these countries provide the tools to create successful businesses and then those businesses just move to cheaper countries. You're kind of getting screwed over. Countries invest too. In their economy. Providing high quality education at a low price is a huge investment, for example. It's not a good deal if citizens take that and you don't get a return on your investment, i.e. they're not creating innovative companies in your country.
jplrssn 2y ago
On the other hand, not taxing unrealized capital gains on exit would effectively create a loophole by which it would be possible to avoid taxation simply by moving to a tax haven for a while and realize the gains there.

joelwilsson 2y ago

The Forbes article is from April, while The Local article you're quoting is from October. Back in April, the proposal was different, as The Local explains. And the biggest problem for startup founders remains: you're taxed, on leaving the country, on unrealized gains. Being taxed on 5 millions of profit sounds fair, being taxed on 5 millions (or 30 millions) of valuation used for raising capital, in a startup that then fails and is worth nothing after a few years, maybe not so much. Neighboring countries do not have this kind of taxation.

olieidel 2y ago

Not at all. As soon as you get VC money, your valuation likely is in the millions, and then you're already way beyond the threshold. Good luck with the exit tax then. Many sub-aspects of this are debatable, of course: Is VC money good? Are high startup valuations good? Also: Sure, you can defer the payment, you can pay it later with interest, etc., etc. But that's besides the point. The problem here is: Once your startup reaches a high valuation, exiting the country, for whatever reason, will become difficult. And this might happen for rather innocuous reasons: Temporarily moving to the US to open up a subsidiary, staying there > 180 days / year? --> Exit tax. Etc. The number of second-order consequences is high, and I'd wager most of them are not good if your goal, as a country, is to foster a startup ecosystem.