Seafarers who are tax resident abroad who are in service on Norwegian vessels, i.e. vessels registered in the Norwegian International Ship Register (NIS) or the Norwegian Ordinary Ship Register (NOR), that are liable for tax in Norway are assessed by the Central Office - Foreign Tax Affairs. The Central Office - Foreign Tax Affairs also stipulates pensionable income and National Insurance contributions for seafarers resident abroad who are only obliged to pay National Insurance contributions to Norway.
Liability to pay tax
The main rule is that persons employed on Norwegian-registered ships (NOR or NIS) are liable for tax in Norway. For seafarers resident abroad, the liability to pay tax follows from the Taxation Act section 2-3 subsection (1) letter h.
Persons resident in a Nordic country are liable for tax in Norway on income earned on board ships registered abroad that are on bareboat charter to Norwegian enterprises, cf. the Taxation Act section 2-3 subsection (1) letter h. no. 2, seen in conjunction with the Nordic Tax Treaty article 15 no. 3.
There are several exceptions from the liability to pay tax to Norway. Persons who can substantiate that they are liable for tax to their country of residence on all their pay and where double taxation is not prevented by a tax treaty, are not liable for tax in Norway.
Nor are persons resident outside the Nordic countries who serve on board NIS registered vessels liable for tax in Norway, cf. the Taxation Act section 2-3 subsection (1) letter h no. 3.
A tax treaty with the country of residence may also limit the liability to tax.
Seafarers who work on board vessels in petroleum-related activities on the Norwegian Continental Shelf are liable for tax in Norway pursuant to the Petroleum Taxation Act section 2 and are thus not covered by the above-mentioned provisions.
Reporting of seafarers
Employers must report EEA citizens employed on vessels registered in NIS or NOR to the NAV State Register of Employers and Employees (the NAV Aa-registeret). Non-EEA citizens must be reported only if employed on a vessel registred in NOR.
Reporting shall be done using the prescribed form that can be obtained by contacting:
NAV Aa-registeret, P. O. Box 4330, NO-2308 Hamar, Norway,
tel. (+47) 62 02 40 00, or via the internet: www.nav.no/aaregisteret
Employees with a foreign employer on board vessels in petroleum-related activities on the Norwegian Continental Shelf must also be reported pursuant to the Tax Assessment Act section 6-10.
Employees with Norwegian employer on board vessels registered in the NIS- or NOR-Register engaged in petroleum-related activities on the Norwegian Continental Shelf (NCS), also have to apply for a tax deduction card on form RF-1209. Please see Tax topic nr.2.
Duty to withhold tax (payroll withholding tax) etc.
Tax deduction cards are not sent to seafarers resident abroad. Special deduction tables have been produced for them. Employers registered in the NAV AA register who have seafarers in their employ at the beginning of the income year will be sent the deduction tables. The deductions to which seafarers are entitled are incorporated in the deduction tables, and they are based on even deductions over 12 months. When selecting the table, the employer must make a decision with respect to the tax class and the obligation to pay National Insurance contributions and whether the employee is entitled to seafarers’ allowance, see 7.9.
For employees who are only liable for National Insurance contributions to Norway, the employer shall deduct National Insurance contributions in advance in the same way as for tax. Separate tables have not been produced for National Insurance contributions. Deductions must be made at the percentage rate stipulated in the Norwegian parliament’s annual decision on tax rates.
Reporting of pay and other remuneration
Payments made to persons resident abroad must be reported in the following cases:
- Payments of wages and other remuneration for work on board vessels registered in NOR. It is not required, however, to report wage payments to persons resident outside the Nordic countries and who are nationals of countries outside the EEA area if they are employed by a foreign employer who is engaged in business activity on board (not ordinary seafarers).
- Payments of wages and other remuneration for work on board vessels registered abroad that are on bareboat charter to Norwegian shipping companies if the employee is resident in another Nordic country.
- Payments of wages and other remuneration for work on board vessels registered in NIS if the recipient is:
- a Norwegian national,
- resident in another Nordic country, or
- a national of an EEA state.
A report is not required, however, of wage payments to persons resident outside the Nordic countries who are employed in connection with hotel and restaurant activity on board tourist ships registered in NIS.
Tax returns
Seafarers who are tax resident abroad are usually exempt from submitting a tax return, cf. Regulations no. 155 of 16 February 2001 section 2. It is a condition for such exemption that the person only has seafarer’s income and that the income is not liable for tax pursuant to the Petroleum Taxation Act.
National Insurance
Seafarers who are not resident in Norway, but who are employed on board a Norwegian-registered vessel (NOR or NIS) must be members of the Norwegian National Insurance Scheme if the employee is:
- Norwegian national, or
- resident in a Nordic country, or
- national of a country covered by the agreement on the European Economic Area (EEA) or Switzerland, or
- employed on board a vessel that is only engaged in domestic shipping (in Norwegian waters).
Employees employed in connection with hotel and restaurant activities on board tourist ships registered in NIS are exempt from the obligation to be members of the Norwegian National Insurance Scheme.
EEC Regulation no 1408/71 on social security schemes also contains special provisions concerning exemptions.
Seafarers on board vessels used in exploration for or extraction of petroleum deposits or other natural deposits on the Norwegian Continental Shelf are insured irrespective of their nationality, cf. the National Insurance Act section 2-2.
Seafarers who are members of the Norwegian National Insurance Scheme must pay the full membership contribution to the Norwegian National Insurance Scheme. For seafarers resident abroad who are exempt from paying tax to Norway, the National Insurance contributions are stipulated by the Central Office - Foreign Tax Affairs.
As a rule, employers shall pay employer’s National Insurance contributions on wages and similar remuneration paid to seafarers employed on board Norwegian vessels (NOR or NIS) at the highest rate (Zone 1).
For payments to foreign seafarers employed on board NIS-registered vessels whose pay is not required to be reported, a corresponding exemption applies from the obligation to pay employer’s National Insurance contributions.
The exemption from the obligation to report pay does not apply to work and activities on the Norwegian Continental Shelf, and only if the employee is not liable for tax and National Insurance contributions to Norway. See the Regulations relating to the obligation to report pay when paying persons resident abroad, Regulations no. 932 of 19 November 1990 section 1 subsection 3 c) - e).
Foreign seafarers other than those mentioned above and who are employed on board NOR-registered vessels engaged in international shipping, are partially insured with rights to benefits in the event of occupational injury and death, cf. the National Insurance Act section 2-6. This provision does not apply to persons who are employed in the service of a foreign employer who is engaged in business activity on board.
Seafarers who are only partially insured pursuant to the National Insurance Act section 2-6 are not required to pay National Insurance contributions.
Employers must pay a monthly National Insurance contribution for partially insured seafarers pursuant to the National Insurance Act section 2-6. The contribution is calculated per employee on board for each month or part of month.
Foreign seafarers, not citizen of an EEA-state, onboard vessels registered in NIS are exempted from membership in the National Insurance Scheme, pursuant to the National Insurance Act. Seafarers that are not covered by the National Insurance Scheme are not liable to pay National Insurance Contributions.
The employer is required to provide insurance to cover occupational injuries for seafarers on board vessels registered in Norway, if they are exempted from the National Insurance Scheme.
Exemption from contribution to the NIS
Foreign seafarers who are citizen in a country party to the European Economic Cooperation (EEA) may apply for exemption from the National Insurance Scheme. Provided that the social security authorities in his/her resident country issues a certificate/documentation (E-101) confirming that he/she is covered under the NIS there, he/she may be granted an exemption from the contribution. Application enclosed documentation, should be sent to :
NAV internasjonalt, medlemsavdelingen, P.O. Box 8138 Dep, NO-0033 OSLO, NORWAY.
Telephone: + 47 23 07 37 00. E-mail : nav.internasjonalt@nav.no
When exemption is granted we will be informed.