Cross-border commuters

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A cross-border commuter is a person who is taxable as a resident of a municipality which is immediately adjacent to the national border between Norway and Sweden or that between Norway and Finland and who earns salary or other similar remuneration for personal work performed in a municipality which is immediately adjacent to the same national border in the other country. 

Cross-border commuters

Are cross-border commuters resident for tax purposes in Norway?

A cross-border commuter is a person who is taxable as a resident of a municipality which is immediately adjacent to the national border between Norway and Sweden or that between Norway and Finland and who earns salary or other similar remuneration for personal work performed in a municipality which is immediately adjacent to the same national border in the other country. It is a condition that the person regularly resides in his or her own permanent home.

A person will not be covered by the provisions concerning cross-border commuters if the municipality of residence and the municipality of work are not immediately adjacent to the same national border. This applies for example where a person lives in a municipality in Norway which is immediately adjacent to the national border with Finland and works in a municipality in Sweden which is immediately adjacent to the national border with Norway.

However, it is not a condition that the person's municipality of residence is immediately adjacent to the municipality of work in the other country. 

For more information on this, see the Tax ABC.

Cross-border commuters who are resident in Norway for tax purposes must be taxed in Norway for salary and similar remunerations earned in border municipalities in Sweden and Finland. This applies to work for both public and private sector employers.

In accordance with Council Regulation (EC) No 883/2004, cross-border commuters are generally covered by the National Insurance scheme in the country of work. This Council Regulation applies from 1 June 2012 inclusive.

Income which cross-border commuters resident in Norway for tax purposes earn in a border municipality in Sweden or Finland will not normally be considered pensionable in Norway. Pensionable income will not be determined in connection with the tax assessment and National Insurance contributions will not be payable to Norway on such income if the cross-border commuter only works in Sweden or Finland.

For people who are employees in more than one country, it is a condition that a significant part (at least 25 percent) of the work is carried out in the country of residence in order for membership of the National Insurance scheme of that country to be maintained.

Contact NAV if you are in any doubt over membership of the National Insurance scheme.

Advance tax must be levied on cross-border commuters resident in Norway for tax purposes who work in a border municipality in Sweden or Finland. National Insurance contributions will not be included in the advance tax.

Cross-border commuters resident in Sweden or Finland for tax purposes?

Cross-border commuters resident for tax purposes in Finland or Sweden will not be required to pay income tax in Norway for salary and other similar remuneration for personal work performed in a border municipality in Norway. The income will only be taxed in the country of residence. This applies to work for both public and private sector employers.

If a cross-border commuter receives benefits from the Norwegian Labour and Welfare Administration (NAV), these benefits will be taxable to Norway if the taxpayer is liable to pay tax as a resident under Norwegian domestic law.

In accordance with Council Regulation (EC) No 883/2004, cross-border commuters are generally covered by the National Insurance scheme in the country of work. Cross-border commuters resident in Sweden or Finland must normally pay National Insurance contributions in Norway on income as a cross-border commuter. National Insurance contributions are assessed and collected by the Norwegian Tax Administration. Otherwise, the same rules apply as apply to cross-border commuters who are resident in Norway for tax purposes.

The tax office will assess advance tax for cross-border commuters resident in Sweden or Finland which corresponds to National Insurance contributions. A tax deduction card of 10 percent will normally be issued. 

When a cross-border commuter receives benefits from the Norwegian Labour and Welfare Administration (NAV) which are taxable to Norway because the taxpayer is liable to tax as a resident under Norwegian domestic law, the commuter must contact the tax office in order to determine whether their tax deduction card must be updated. 

No tax deduction card will be issued if the cross-border commuter presents documentation verifying that he or she is not a member of the National Insurance scheme in Norway and that he has received an advance statement granting exemption from tax on salary income. This advance statement will be sent to the employer with a copy to the cross-border commuter. 

Employers domiciled in Norway must deduct advance tax from salary paid to cross-border commuters resident in a border municipality in Sweden or Finland for personal work performed in a Norwegian border municipality when the employee is a member of the National Insurance scheme in Norway. Norwegian employers are also obliged to report salary paid to cross-border commuters resident in Sweden or Finland.  

Norwegian employers are also obliged to pay employer's National Insurance contributions for salary payments made to cross-border commuters resident in Sweden or Finland. 

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