After Norway's Labor coalition raised the wealth tax rate by 0.1% in 2022, a record number of super-rich residents left the country. Among them, for example, is Kjell Inge Røkke, the billionaire industrial magnate. This has already cost the Norwegian government tens of millions of kroner in lost tax revenue.

According to Norwegian tax law, individuals with total assets over GBP 130,000 (about €150,000) are required to pay a tax of 1% on the amount exceeding the above threshold. Of this tax, 0.3% goes to the state budget, and the remaining 0.7% goes to the municipality. Persons whose total assets exceed GBP 1.5 million must pay a tax of 1.1%. The additional tax of 0.1%, which caused such dissatisfaction among millionaires, goes to the state budget.

Let us consider the situation in a general context.

Twelve European countries introduced a wealth tax in 1990 but most repealed it in the 1990s and 2000s because of growing fears that the wealthy would simply move their assets abroad in the face of globalization. France, which lost 60,000 millionaires from 2000 to 2016, repealed its wealth tax in 2017. Only three European countries, Norway, Spain, and Switzerland, currently have a wealth tax.

So why do millionaires move from Norway to Switzerland?

Interestingly, many Norwegians choose Switzerland as their new home, despite the fact that this country receives even more income from wealth tax than Norway—4%. But unlike Norway, Switzerland offers attractive tax rates for foreigners. For example, in some cantons of Switzerland for people who live but do not work in the country, a lump-sum taxation is available. It allows you to choose a fixed amount of tax based on expenses and standard of living, rather than on total world income and assets.

Notably, the Norwegian government is not going to revise wealth tax rates despite the exodus of large taxpayers—instead, the country wants to introduce an “exit tax”.