The Great Exit Tax Debacle: If You Think It’s Tough to Leave, Try Paying COMEDY!
So it seems we live in a world where the taxman no longer asks if you’re rich to take their slice; nope, they’ve
decided to target *anyone* with the glitter of entrepreneurial potential. Welcome, Erling Wegger Linde—he’s
a Norwegian entrepreneur who’s got a lot to say about that, and trust me, what he says is juicier than a
Norwegian salmon on a BBQ!
Introducing the Tax Titan: Linde vs. Exit Tax
Mr. Linde’s move to Canada this summer was to help his company, Flowcase, expand in North America. But wait—
there’s a catch! The Norwegian government has introduced an exit tax, meaning he’s looking at a tax bill of
NOK 40 million, unless he hops back home in the next 12 years. Do you think that’s an offering from the
government or a very expensive game of Monopoly gone wrong?
“Fair’s Fair,” Says Who?
Now, the government’s got the audacity to say it’s only fair that gains made while you’re a resident get taxed
in Norway. Sounds pretty logical, right? But Linde thinks otherwise. It’s not about the values created but
the potential ones. After all, you can’t redistribute the values that *haven’t* been created yet,
which makes you wonder, does Norway tax dreams as well?
The Numbers Game
Just to break it down for you: On paper, Linde’s shares are valued at NOK 250 million. If the company
tanks while he’s abroad finding out why everyone in Toronto thinks ‘timbits’ are a food group, he still
owes the taxman. And I thought adulting was hard before this!
Who Wants to Stay and Build?
Linde makes a valid point: if the exit tax drives away entrepreneurs, who’s gonna foot the bill for
the state budget in ten years? And let’s face it, you can’t really tax a pile of future dreams, can you?
This isn’t Hogwarts, where the Ministry of Magic performs magic taxes while you’re asleep!
Enter the Janteloven: Where Everyone’s Above Average!
And oh, the beloved Janteloven—the Scandinavian ethos that says, “Don’t think you’re better than anyone.”
Linde thinks the government needs a serious reality check to understand how startups operate. I mean, who
wants to encourage innovation while simultaneously slapping a hefty tax on the face of potential success?
Reality Check: Is This Tax Fair?
On the government side, State Secretary Erlend Grimstad defends the exit tax as a closure for tax loopholes,
but it does beg the question:: is this really a loophole, or just a rich tapestry of squidgy morals?
If “fair” means taxing the dreamers before they’ve even started to dream big, I’m ready to take my
hat and leave this debate.
Conclusion: The Entrepreneurial Exodus?
If we carry on this taxing trend, I might suggest Norway starts building retirement homes in Canada.
With the amount of entrepreneurs packing their bags and heading overseas, they’ll need a place to retire
from their tax nightmares! So, rather than squeezing potential out of the thriving entrepreneur scene,
let’s encourage them to build, create, and chase those dreams—without the impending threat of a
taxman with a vendetta.
Here’s hoping the government reconsiders before we’re left with just two types of citizens: those
who dream of making it big and the ones who’ve already left for a sunnier tax-free shore!
– They will take the wealthy; however, they are now targeting everyone who possesses the potential to amass wealth as well.
Erling Wegger Linde relocated his family to Canada this summer to spearhead the expansion of his company in the North American market. Photo: Dan NovakPublished: Less than 20 minutes ago
The short version
- The Norwegian entrepreneur Erling Wegger Linde has voiced his strong objections to the controversial exit tax, asserting that capital gains accumulated while residing in Norway must still be taxed domestically, even after relocating abroad.
- Upon moving to Canada, Linde faces a daunting potential tax obligation of NOK 40 million, a significant burden that looms over his efforts to grow his business in North America.
- He argues that this exit tax could deter aspiring entrepreneurs from staying in Norway until they achieve success, thereby undermining the nation’s burgeoning start-up ecosystem.
The summary is made by the AI tool ChatGPT and quality assured by E24’s journalists
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The exit tax has triggered significant unrest among the entrepreneurial community, prompting Linde to raise his concerns publicly.
As the founder, manager, and majority stakeholder of Flowcase, formerly known as CV Partner, Linde embodies the modern tech entrepreneur.
Flowcase is diligently developing a sophisticated software solution that allows companies to evaluate and catalogue the competencies of their employees, a tool particularly beneficial for consulting firms participating in competitive bidding processes.
In pursuit of international growth, Linde relocated with his family—comprising two young children—to Canada this summer, aiming to establish a closer connection with clients and market dynamics.
– In order to accelerate growth and expand globally, we must be in close proximity to our customers and the market, Linde explains during a phone call from Toronto.
His move across the Atlantic was not without its challenges, as he now carries the burden of a potential tax bill amounting to NOK 40 million, a financial obligation which he hopes to mitigate by maintaining a temporary residence abroad.
When the government unveiled the national budget in early October, the contentious exit tax was a focal point of discussion.
The government contends that shares’ value increases accrued while residing in Norway should be subject to taxation in the country.
– I certainly agree that assets created in Norway should be taxed here, Linde acknowledges. However, he points out the current situation is problematic because it imposes taxes on unrealized gains based on hypothetical future growth expectations rather than actual cash flow. The entrepreneur emphasizes his commitment, stating, I work tirelessly to foster that growth and create genuine value.
– They will take the rich, but now they are taking everyone who has the potential to become wealthy. You cannot just redistribute wealth that has yet to be created.
This is how the tax should be designed
- The proposed threshold for taxation is set at NOK 3 million, a significant revision from the original proposal of NOK 500,000.
- The amount will be applied as a basic exemption, intended to offer relief for those whose profits exceed NOK 3 million.
- The relocation tax should only apply to gains accrued during the individual’s residency in Norway, ensuring fairness.
- Individuals who relocate may defer tax payments for up to 12 years, with options for managing payments over this period, including interest-free installments or a lump-sum payment with interest after 12 years.
- If a person returns to Norway within 12 years, the tax may be partially or fully waived.
- In the unfortunate event of passing, the estate of the deceased will assume the tax obligations of the deceased, according to the proposed regulations.
- The government anticipates that this tax policy could generate NOK 100 million in additional revenue, although they acknowledge the uncertainty surrounding this estimate, projecting possible revenues of NOK 1.2 billion over 12 years.
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Will take the exit tax to court: – It goes too far
The NOK 40 million figure is based on Linde’s share holdings at the time of his move, reflecting the investment value calculated at NOK 250 million.
Should his company face bankruptcy while he resides abroad, Linde could find himself liable for this substantial sum.
– Are you going to move home within 12 years, then?
– Currently, the objective is to remain here for two years, treating it as a temporary relocation. However, the reality is that these decisions impact families, and if my children find happiness here, returning to Norway may become increasingly challenging. It’s about preserving individual liberties.
– Have you considered restructuring the company or taking other measures in response to this tax?
– This taxation policy is so new that its implications emerged coinciding with our move. While I contemplate my options, it raises the question of whether to concentrate on company growth or divert funds to hire tax advisors, he reflects.
– Less jantelaw
Linde has scant praise for the government’s management of this tax situation, as he firmly believes it is driving entrepreneurs away from Norway.
– There is widespread discussion about fostering more diversity within the startup ecosystem. The reality is that we need to empower entrepreneurs and encourage innovation, he asserts.
– Who will finance the state budget and support various subsidies in the next decade if no one creates value in the meantime, he challenges.
Linde is not alone in his opposition to the exit tax; others share his sentiments within the entrepreneurial community.
Martin Schütt, a speaker at the Askeladden summit, previously expressed to E24 that the exit tax provides a compelling incentive for entrepreneurs to exit Norway as early as feasible, raising alarms about the long-term impact on the ecosystem.
In his communications with the government, Schütt criticized the exit tax as a potential “misunderstanding,” suggesting that policymakers fail to grasp the volatility and inherent bankruptcy risks associated with early-stage companies.
Linde echoed the call for the government to gain a deeper understanding of the start-up environment and its unique challenges.
– I believe Vedum should adopt a less rigid stance rooted in Janteloven and instead focus on factual evidence, having the courage to recognize that perhaps the approach taken may not yield the desired results.
– It is fair
State Secretary Erlend Grimstad (Sp) has staunchly defended the rationale behind the exit tax.
– The primary objective of this expatriation tax is to eliminate a tax loophole by ensuring that those who leave Norway contribute taxes on the values gained during their residency, similar to obligations for those who remain and contribute to society, he articulated.
– It is indeed fair. If these regulations are not established, it becomes alarmingly easy for individuals to bypass paying this tax, he elaborated.
He highlighted the flexibility offered to individuals who can return within 12 years, allowing for temporary relocations without severe penalties.
– Ultimately, this is merely a tax mechanism to ensure that values accrued during a person’s time in Norway are appropriately taxed before they leave, he maintains.
Erling Wegger Linde, a Norwegian entrepreneur, recently relocated his family to Canada to expand his business in North America. However, he faces the burdensome prospect of a NOK 40 million exit tax imposed by Norway, applicable to capital gains accrued during his residency in the country. Linde has publicly criticized this tax, suggesting it could stifle the growth of Norway’s entrepreneurial ecosystem by discouraging potential business innovators from staying until they achieve success.
In a statement, Linde expressed concern about how the exit tax targets not just the wealthy but anyone with the potential for wealth accumulation, stating, “You cannot just redistribute wealth that has yet to be created.” He outlines his belief that such policies could erode the motivation for entrepreneurs to foster growth and innovation within Norway.
The proposed exit tax, part of the recent national budget discussion, has sparked considerable unrest among entrepreneurs. Key features of the proposed tax include:
- A revised threshold for taxation set at NOK 3 million, up from an earlier proposal of NOK 500,000.
- Only gains accrued during an individual’s residency in Norway would be taxed, promoting fairness.
- Those relocating could defer tax payments for up to 12 years, with options for interest-free installments or lump-sum payments after 12 years.
- Should individuals return to Norway within 12 years, the tax may be partially or fully waived.
- In the event of a person’s death, their estate would assume the remaining tax obligations.
- The government projects the new tax policy could generate significant revenue, although there is considerable uncertainty surrounding these estimates.
Linde’s predicament illustrates the potential consequences of such taxation policies on the entrepreneurial landscape, as he contemplates whether to prioritize business growth or allocate resources for tax advising. His concerns about the impact of the exit tax resonate within the broader entrepreneurial community, which worries about losing talent and innovation to more favorable environments abroad.
As entrepreneurs like Linde navigate these challenges, the future of Norway’s startup ecosystem remains uncertain, raising pressing questions about how to balance taxation with the need to foster a thriving business landscape.