Taxation of hired out personnel

Foreign employees hired out to work in Norway will as a general rule have to pay tax in Norway from day one. This is regardless of  the length of the contract, the nationality of the employee and the nationality of the lessor (the employer).

This follows both from the Norwegian Tax Act and tax conventions between Norway and other countries.

Whether an employee is considered to be hired out is determined by the Norwegian Tax Authorities. The following criteria may indicate that the arrangement constitutes hiring out of personnel:

  • The hirer (user) bears the responsibility or risk for the result produced by the employee’s work
  • The hirer (user) has the authority to instruct the worker
  • The work is performed at a place which is under the control and responsibilty of the hirer (user)
  • The payment to the lessor (employer)  is based on an hourly rate
  • Tools and materials are mainly put at the employee’s disposal by the hirer (user)
  • The number and qualifications of the employees are not solely determined by the lessor (the employer)

Note: The lessor (the employer) is responsible for all reporting obligations towards Norwegian Tax Authorities, i.e. reporting of personnel, payment of  employer’s social security premium, tax withholding etc.

The hirer (user) is jointly responsible with the lessor for any unpaid taxes and social security premium in relation to the personnel that are hired out.

The employees have to prepare and submit an annual personal tax return covering Norwegian source income.

If you have an enquiry about any of the above, contact the Central Office – Foreign Tax Affairs

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