If you are an employer, who has maintained records of your employees working in Norway and reported the income relating to duties in Norway to Norwegian Tax Authorities through the a-melding throughout the year - well done!
It might nonetheless be a good idea to check whether the information on the a-melding’s that have been submitted is complete and has been received correctly by the Norwegian Tax Administration. There are several pitfalls to look out for and we will discuss these in further detail below.
Income reported without a D-number
If an employee does not have a D-number by the time the A-melding is due it is perfectly acceptable to use a temporary number. This may be the passport number or another piece of recognised international identification (ID) information. However, each record submitted with an international ID number must be updated to link to the correct D number once it is received.
Records submitted in an earlier period without a D number should be automatically updated if the A-melding for a later period contains a record with the same piece of ID information along with the new D-number. If the same ID information is not used, the old record of income and withheld tax will not be re-allocated to the individual. This will cause problems with the pre-populated tax returns and the tax assessment notices for 2016, as a portion of the income and wage tax will be missing.
Please note if there is still work to be done to bring the 2016 Norwegian payroll records up to date the Norwegian Tax Administration will not automatically reallocate any tax records submitted without a D number to the correct D number once it is available. All 2016 a-meldings containing records without a D number must be resubmitted individually.
The easiest way to check whether all income and tax has been associated with a D-number is to download an A07 reconciliation report for 2016 from Altinn with option “information regarding income, advance tax deductions, specified per person”.
Norwegian National Insurance Contribution (NIC)
If an A1 Certificate has not been secured from HMRC, there may be a liability to Norwegian NIC (both employee and employers contributions). Each portion of income reported on the a-melding is allocated to a specific code. It is important to report carefully each portion of income included on the a-melding and allocate to either an NIC liable code or and NIC exempt code. It is very easy to get this wrong on an a-melding. If income is coded incorrectly, there will be a demand for Norwegian NIC automatically generated whether or not it is due.
Should this happen each employee will receive a demand for their portion of the NIC. If incorrect, each employee would have to appeal on his or her Norwegian tax assessment. There is an entirely different process to appeal the employer’s portion. We would therefore recommend that submitted a-meldings are checked to ensure the salary is allocated to the correct codes at the outset; otherwise, it will be a time consuming exercise to correct.
Just a reminder that both Norwegian NIC and UK NIC should not be paid on the same income so if Norwegian NIC has to be paid there may be an opportunity to make a reclaim or exempt income from UK NIC.
If you have employees working in Norway, and you require assistance with reporting their income correctly to avoid future complications, please contact our specialist team - Helen Wood, Integrated Employment Solutions Senior Manager email@example.com , Catriona Ross, Integrated Employment Solutions Assistant Manager firstname.lastname@example.org , Carol Sim, Integrated Employment Solutions Assistant Manager email@example.com or your usual AAB contact.