Payment and Collecting of Taxes

For foreign employees and foreign companies performing activities in Norway or on the Norwegian Continental Shelf, Central Office - Foreign Tax Affairs (COFTA) serves as Tax Office when the company’s head office is registered in municipality 2312. COFTA issues Tax Deduction Cards to employees, and estimates tax in advance for self-employed persons and companies. Tax Collector – Foreign Tax Affairs serves as tax collector for this group of employees and companies.

Who is obliged to pay taxes in advance?

Pursuant to the Tax Payment Act, every employee, as well as self-employed, working in Norway, is obliged to pay taxes in advance.

Who is obliged to withhold taxes from wages and remuneration?

Pursuant to the Tax Payment Act, section 5-4 (1) the employer has a statutory duty whenever paying out wages, salaries etc, to deduct the correct amount of income tax and remit this to the tax office. This also applies to foreign employers with employees working in Norway or on the Norwegian Continental Shelf. Pursuant to the Tax Payment Act, section 4-1 (1) C, the person considered as an employer, is a  «person paying out wages or other remuneration subject to tax deduction in advance, whether paying the wages himself/herself or through an authorised person».

Note!

When employees are hired out, the contractor and the subcontractor are jointly and severally responsible for the withholding of taxes pursuant to the Tax Payment Act, section § 4-1 (2) and (3). The same applies to a person who declares himself employer pursuant to section 10 of the Foreigners Admittance Act of 24 June 1988. The parties responsible are free to agree that one of them is in charge of satisfying the legal requirements. Such an agreement will, however, only absolve from liability pursuant to decision by the Tax Collector.

How to make tax deductions in advance

The employer must calculate the amount of tax to be withheld from the employee’s salaries/wages.

The type of tax card issued decides what is to be included in the basis of tax withholding.

If the employee is issued with a tax card with standard deduction, all forms of salaries, cash remuneration / payments in kind to cover travel expenses, board and lodging should be included in the basis of tax withholding.

If the employee is issued with a tax card without standard deduction, renumeration / payments in kind paid by the employer should not be included in the basis of tax withholding, unless the renumeration exceeds current rates.

If the employer has arranged netwage for the employees working in Norway (i.e. the employer will cover all Norwegian taxes), a gross wage has to be calculated on basis of the netwage before calculating the amount of taxes to be withheld.

How to report and pay the taxes withheld

A Norwegian employer is obliged to submit a Recording Sheet to the tax collector in the municipality where he/she is registered with head office (head office municipality).

Foreign employers (i.e. employers not resident in Norway) will be registered with head office in municipality 2312 - COFTA. The employers in question are obliged to submit a Recording Sheet to Tax Collector - Foreign Tax Affairs . The rate of the employer’s NIS contributions vary depending on which zone the employer’s general business enterprise is located within.

The amount of taxes should be sent to:

Tax Collector - Foreign Tax Affairs, P.O.Box 8103, NO- 4068 Stavanger, Norway.

Date of remittance for the remuneration period:

If tax withheld is not paid when due, a penal interest will be charged. There is also a legal right to distrain on subcontractor’s outstanding claims with the contractor.

Responsibility

The employer is responsible to withhold and transfer the amount of taxes withheld in accordance with the rules and regulations in force. If this is not done, the employer will be held responsible for taxes that should have been withheld pursuant to the Tax Payment Act section 16-20. Failure to comply with these regulations may result in criminal liability, cf. section 18-1 and 18-2. The obligations and the responsibility that follow from the Tax Payment Act also apply to the contractor/principal in Norway.

Self-employed (persons/individuals)

COFTA issues tax in advance for foreign self-employed persons registered with head office in municipality 2312 - COFTA. Tax in advance is due in four - 4 - equal instalments during the income year: 15 March, 15 May, 15 September and 15 November. If tax in advance is not paid when due, there is a legal right to calculate interest for each month overdue.

Tax in advance for foreign self-employed persons registered with head office municipality 2312 - COFTA, should be paid to Tax Collector  - Foreign Tax Affairs, P.O.Box 8103, NO- 4068 Stavanger, Norway.

The payment of corporation taxes

Corporation taxes are payable during the year after the income year (i.e. the calendar year).

COFTA estimates a Preliminary Tax (forskuddsskatt) corresponding to the accrued taxes not yet assessed. Preliminary Tax is to be paid in two instalments, by 15 February and by 15 April.

The possible remainder, the final assessed taxes less the preliminary taxes, is to be paid within 3 weeks after the assessment is made public. Remaining tax will result in accrued interest. In order to avoid an interest claim, an additional sum of preliminary tax must be paid by 30 April. If Corporation Taxes are not paid when due, there is a legal right to calculate a penal interest for each month overdue, as well as a legal right to distrain on subcontractor’s outstanding claims with the contractor. Corporation Tax for companies registered with head office in municipality 2312 - COFTA, must be paid to

Tax Collector  - Foreign Tax Affairs, P.O.Box 8103, N- 4068 Stavanger, Norway.

Bank: Nordea Bank Norge ASA, Postboks 1166 Sentrum, 0107 Oslo, Norge.
Account no. 6345.06.23123