In the first of a multipart series, AAB’s Helen Wood discusses the various aspects of Norwegian tax compliance that employers need to be aware of when sending employees to work in Norway.
Tax Assessment Notices
If you post employees out to Norway, then October onwards will be a key period for your business to ensure that you and your employees are compliant with Norwegian tax reporting obligations.
Midway through the month the Central Office for Foreign Tax Affairs (“COFTA”) will begin to issue tax assessment notices to all employees that performed work in Norway during the previous tax year. Tax assessment notices show COFTA’s assessment of the amount of income earned and the final tax due by an employee. The final tax due is compared with the amount of tax withheld by the employer during the tax year in question and from this the employee is either issued a tax refund, or more commonly (if professional advice has not been sought early) a demand for additional employee tax and social security.
Experience has taught us that given the often complex working arrangements that internationally mobile employees have, their tax assessment notices are often rife with errors. It is therefore critical that tax assessment notices are reviewed by an expert who will quickly be able to identify and resolve potential errors. Failure to do this can mean that significant penalties & interest are payable by both the employees and employers alike. Ignoring the assessment does not get rid of the issue either. COFTA have an agreement with HMRC whereby HMRC can now collect any unpaid liabilities on their behalf and can actually recover the debt by removing the individual’s personal property.
This notice also verifies the maximum amount of credit that can be claimed in the UK from HMRC. Any over claims of credit in the UK are treated as a very serious matter by HMRC, but on the flip side it is important that employees have not paid tax twice. This issue warrants its own blog which will be released in due course.
If you or your employees have received a tax assessment notice recently and wish to discuss these further, then please contact Helen Wood, Tax Senior Manager, firstname.lastname@example.org for more information.