Norway Finds Widespread Dividend Tax Avoidance via Stock Lending

A Nordic tax audit confirmed “systematic use of stock lending” for withholding tax avoidance on dividend distributions, the Norwegian Tax Administration reported Wednesday.

The practice involves temporarily lending dividend-paying shares to lower-taxed parties, costing Norway up to 2 billion Norwegian krone ($201 million) annually in lost revenue, according to the administration.

The audit — conducted jointly with other Nordic countries — confirmed that both domestic and international investors engage in the practice.The administration also noted those who participate in the scheme primarily lend shares from the largest listed companies.

• If uncovered, share parking requires full dividend tax ...