The PAYE scheme
If you receive salary or other remuneration for work performed on Svalbard, the salary will be taxable to Svalbard if you are resident for tax purposes or for each period of residence in connection with your employment which lasts for at least 30 consecutive days.
The PAYE scheme primarily covers the following benefits:
- salary and other remuneration for work and assignments either within or outside a contractual employment relationship, including fees, commission, etc.
- board fees and similar
- benefits in kind and profits made on allowances
- severance payments
- pension, benefits from surrendered property or annuities as part of a pension scheme in employment when the recipient is resident for tax purposes on Svalbard (period of residence lasting more than 12 months).
When calculating the 30-day period, days spent travelling to or from Svalbard should not be counted as residence on Svalbard.
Salary which you receive for work performed away from Svalbard will not be taxable to Svalbard even if you are resident for tax purposes there.
Tax and duties will be deducted from sick pay, maternity allowance and adoption allowance or unemployment benefit during periods of unemployment in accordance with the rules of the PAYE scheme. In the case of temporary residence, in order to be liable to pay tax to Svalbard, the period of residence must have lasted at least 30 consecutive days, you must have been actively working on Svalbard at the time the right to receive payment arose, and you must still actually be resident on Svalbard when the benefit was received.
Holiday pay on salary which is taxable to Svalbard is taxed via the PAYE scheme.
The tax payable under the PAYE scheme is a basic gross tax. No deduction from the basis for calculating tax is therefore granted. The employer must deduct tax from salary/pension when making payments to employees/National Insurance scheme recipients. The tax deduction generally constitutes final settlement for the tax obligation on the salary/pension.
There is an exception from this general principle for those who receive salary/pension from a number of employers when the salary/pension collectively amounts to more than 12 G (National Insurance base amounts) if the tax deduction is too low. In such cases, you will personally be liable to pay tax at a high rate on the excess salary/pension above 12 G. See the section on the payment of taxes and duties.
Tax and employer's National Insurance contributions which are covered by the PAYE scheme are calculated on the basis of gross salary, pension, etc.
There are no months on Svalbard which are not subject to withholding tax, and no tax deduction cards/tax exemption cards are issued. Current tax rates on Svalbard.
For more information, see the Directorate of Taxes’ report Regarding tax and tax deductions in connection with the payment of salary, etc. for work, pension and certain National Insurance benefits on Svalbard, and salary, etc. for work performed on Jan Mayen and in the Antarctic in 2017