Kjell Inge Røkke’s move to Switzerland has been linked to the increased wealth tax. One can have all possible sympathy for Røkke and others who dislike higher wealth tax, but this case is about a much more important feature of the Norwegian tax system. Røkke makes use of a tax loophole that allows business owners not to pay the tax bills they received last year, the year before and all previous years. It may seem that many people believe that wealth tax is the most important reason for moving, but the opportunity to avoid income tax is more important. It is necessary that the politicians close this tax loophole as soon as possible, before the rest of the business owners also have the opportunity to move from their tax. In Norway, it is now the case that business owners can wait to pay income tax until they take the money out of their companies. There are many good reasons why we have such a system, among other things it means that the money can be easily moved around to the investments that give the highest return. But for the system to work, it is necessary that there are no opportunities to avoid the deferred tax. Gradually, people have begun to discover that there are certain holes in this system, if the business owners move abroad. By living in Switzerland for five years, it will be possible to take the entire income there with you, and since Switzerland in practice has a very low income tax for business owners, they can escape almost the entire tax bill. In recent years, Røkke has earned over NOK 30 billion on which he has not yet paid tax, which means that he has deferred a tax bill of over NOK 10 billion. This is a tax bill which, according to the Norwegian tax system, he must pay one day or another, but if he chooses to live in Switzerland for five years, he can take all the money there with him and escape his tax bill. NOK 10 billion is a large amount, also for Røkke. In comparison, Røkke will pay approximately NOK 200 million annually in wealth tax in the future. Ordinary wage earners have to pay tax on their income every year, but I have created a small hypothetical example that illustrates how this tax loophole would turn out for most people. Now suppose that a wage earner who earns 700,000 a year before tax faces the same tax rules as business owners. Instead of paying 200,000 in tax today, the wage earner gets 700,000 into his account, and decides for himself whether he wants to invest this money in shares or use it today. The wage earner chooses to invest all the money in shares and pays zero tax today, taking with him a tax bill of 200,000 for next year. By doing the same for 30 years, the wage earner will have taken home a tax bill of 6 million. The wage earner can then live in Switzerland for five years and thus go through his whole life without paying any tax at all. Most people cannot do such a thing, but it is obvious that this would be a popular strategy if it were possible. We must therefore be careful about accusing Røkke and Dæhlie and the other emigrants of immoral behaviour. When you can make a lot of money by exploiting a completely legal tax loophole, everyone should understand that they want to live in Switzerland for a few years. There are a great many business owners who have the opportunity to make a lot of money moving from their tax bills. Anyone who caught the reactions to Dæhlie’s move to Switzerland understands that being the first high-profile person to make use of such tax loopholes can have huge social costs. But the more people leave, the less the social stigma will probably become. The losses for the Norwegian state can be large. Many Norwegian business owners have chosen to postpone their tax bill. Norwegian business owners have hundreds of billions in untaxed income, which they can legally and easily take with them to Switzerland if they want. Thus, they can end up going through their entire lives without paying income tax. It is therefore very important that the politicians close this tax loophole as soon as possible.
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Close the tax gap – Speech
