Reporting of contracts and employees

(The Assessment Act section § 6-10)

Contracts awarded to foreign businesses
(Tax Assessment Act section 6-10 and pertaining Regulations)

Contracts

All contracts and any subcontracts awarded to foreign contractors must be reported to the Central Office – Foreign Tax Affairs (COFTA) provided that the work is performed

• on a site for building and assembly work in Norway or
• on a site that is under the client’s control in Norway or
• on the Norwegian continental shelf.

The duty to report applies both to businesses and to public agencies.

There is no duty to provide information if the client is a private individual or if the contract is worth less than NOK 10,000.

Employees used in the performance of a contract

If you have a duty to provide information about the contract, you must also provide information about employees used in performance of the contract.

The client is obliged to provide information about employees who work for a foreign contractor and who work on the contract in question.

The foreign contractor is obliged to provide information about its own employees used in performance of the contract. 

Reporting

Even if both the client and the contractor are obliged to provide information about employees used in connection with the contract, it is sufficient that one of them reports.

The information must be reported irrespective of whether the contractor and the employee(s) are liable to tax in Norway.

Information about contracts and employees used in connection with a contract shall be reported using form RF-1199 «Information about contracts, contractors and employees».

The information must be reported as soon as possible and no later than 14 days after the work has commenced.

If changes occur after the information has been provided, corrected information must be provided no later than 14 days after the change occurred. This also applies to all changes concerning personnel used in performance of the contract.

Sanctions

Failure to report may lead to the imposition of a penalty charge or enforcement fine and to liability for the contractor’s unpaid taxes and charges.

Duty to report – examples

Assignments carried out on a site for building and assembly work or on the Norwegian continental shelf – reporting of the contract and employees

Example
A has awarded a contract to Norwegian contractor B. B passes on the whole or part of the contract to foreign business U. U uses Norwegian and foreign employees in the performance of the contract.

• A is not obliged to report the contract awarded to B.
• A and B both have a duty to report the contract awarded by B to U.
• A, B and U have a duty to report U’s employees used in performance of the contract. 

Reporting of contracts in Norway performed on a site that is under the client’s control

Example 1
A awards a contract to foreign business U. The contract is performed on A’s premises.

Is the contract performed on a site under the client’s control?
The answer is ‘yes’ since the contract is performed on A’s premises.

• A has a duty to report the contract awarded to U.
• A and U have a duty to report U’s employees used in performance of the contract.

Example 2
A awards a contract to B. B passes on the whole or part of the contract to U. The contract is performed on B’s premises.

Is the contract performed on a site under A’s control?
The answer is ‘no’ since the contract is performed on B’s premises.

• A does not have a duty to report the contract  awarded to U.
• B has a duty to report the contract awarded to U, see example 1.
• B and U have a duty to report U’s employees used in performance of the contract.