Zone location

Employer's national insurance contributions are calculated at the rate that applies to the zone in which the employer is considered to conduct his business. 

See the overview of zones.

The employer is considered to conduct business where the enterprise is subject to a registration obligation according to the Central Coordinating Register for legal entities Act

The place of registration at the time of payment of salary is decisive. 

Registration in the Central Coordinating Register for legal entities must correspond to the actual location from which the enterprise conducts its business.

If an enterprise changes location without submitting a notice of amendment, or if said notice is not registered with the Central Coordinating Register of Legal Entities, the location information already registered with the Central Coordinating Register of Legal Entitles will be incorrect. In this case, the employer must still apply the zone rate for which the enterprise should have been registered. However, this only applies if correct registration would have resulted in a higher rate. If the correct registration would have resulted in a lower rate, it's left up to the enterprise to ensure that the registered address is correct.

Sub-entities 

An enterprise that conducts business in several geographic areas (or within different industries) must register each business as a sub-entity in the area in question. See section 10 of the regulation to the Central Coordination Register for legal entities Act

In order to register a sub-entity, at least one person is required to have their fixed place of work at the location. 

Each sub-entity represents a calculation unit for employer's national insurance contributions. Salary costs related to the sub-entity must be calculated based on the zone rate in which the sub-entity is registered. 

Although each sub-entity represents an individual calculation unit, reporting and payment of employer's national insurance contributions must be made collectively to one tax collector. 

If an enterprise has sub-entities that are subject to an obligation to register, and for whatever reasons are not registered with the Central Coordinating Register of Legal Entitles, these sub-entities are nevertheless considered individual calculation units. The zone rate in which the sub-entity should have been registered must be applied. However, this only applies if the sub-entity is located in a zone with a higher rate than the zone rate where the entity is registered. The same applies if the sub-entity is  registered with an incorrect address in the Central Coordinating Register of Legal Entitles. 

There are some exceptions to the Central Coordinating Register of Legal Entitles regulations concerning the registration of sub-entities.. For example, exceptions apply to itinerant enterprises. Under certain conditions, a special rule applies if you as an employer are registered in a zone with a reduced rate and you operate an itinerant enterprise in a zone where the rate is higher. If the conditions are met, the highest rate must be used in the zone where the work is performed. 

Each sub-entity registered with a different address is not given a tax-free amount. A legal entity is only entitled to one tax-free amount. 

Relocation of an enterprise during the year

If the main entity or the sub-entity relocates from one zone to another during the year, the relocation is effective from the following calendar month. 

Notice of amendment concerning relocation of the entity must be sent to the Central Coordinating Register of Legal Entitles without undue delay. The date stated in the amendment notice will be considered the date of relocation, provided that the reported date of relocation is the actual date of relocation. 

Itinerant enterprises  

The main rule is that an enterprise must use the rate that applies to the zone in which the enterprise is registered under the Central Coordinating Register of Legal Entitles Act. If the enterprise conducts business activity in several geographical locations, sub-entities in each location must normally be established. If you as an employer conduct an itinerant enterprise however, you are not obliged to establish and register sub-entities in the Central Coordinating Register of Legal Entitles.

By itinerant enterprises, we mean enterprises whose business by its nature is conducted in other locations than the enterprise’s place of registration. Buildings/installations, transportation and hired labour are typical examples of itinerant enterprises. 

Under certain conditions, a special rule applies if you as an employer are registered in a zone with a reduced rate and you operate an itinerant enterprise in a zone where the rate is higher. If the conditions are met, the enterprise must use the highest rate that applies in the zone where the work is performed. According to the special rule, if an employee performs the majority of his work in a zone with a higher rate than the rate in the zone in which the enterprise is registered, the higher rate must be applied to the salary costs related to this work. See the parliamentary resolution on the determination of taxes, etc. for the Norwegian National Insurance Scheme, section 1 (4) for more information. 

In this context, the ‘majority of the work’ means that more than half of the workdays (or work hours) were performed during a calendar month by the employee for the employer. 

As of 2016, if an employee performs the majority of his work in a zone with a lower rate than the rate in the zone in which the enterprise is registered, it is no longer permitted for the employer to apply a lower rate than the rate in the zone where the enterprise is registered. This is a consequence of the EFTA court ruling dated 23 September 2015, where parts of the EFTA resolution to approve the scheme of differentiated employer's national insurance contributions were annulled. As of 2016, in order to comply with the EEA Agreement, itinerant enterprises are no longer permitted to use a lower rate than the rate in the zone in which it is registered with the Central Coordinating Register of Legal Entities.

 

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