NORWEGIAN TAX SYSTEM AND TAX RETURN INFORMATION MEETING WITH FOREIGN EMPLOYEES (2015)

Transcription

1 NORWEGIAN TAX SYSTEM AND TAX RETURN INFORMATION MEETING WITH FOREIGN EMPLOYEES (2015)

2 Contents Tax Administration Tax system in Norway Electronic services Tax return

3 Part 1 3

4 The Tax Administration The Tax Administration is responsible for taxes/tax issues and the population registry in Norway 4

5 Important to notify Remember to notify the Tax Administration about: Moving to Norway Moving within Norway Moving from Norway Changing post address Change in civil status Relocations in Norway can be notified by electronic means. Remember also to notify Postal service! It is particularly important to register correct foreign address for persons with D-number. 5

6 Foreign employee As a foreign employee in Norway you must have: National ID number / D-number Electronic tax deduction card Registration certificate (for EU/EEA nationals) or residence permit (applies for persons from countries outside EU/EEA) 6

7 Part 2 7

8 The tax year

9 1 Electronic tax deduction card If you work in Norway, you must have an electronic tax deduction card. Your employer must use this card in order to make the right tax deduction in your salary each month. Yo can check your tax deduction at skatteetaten.no: 9

10 2 Information of pay and tax deducted Altinn A08 10

11 3 Tax return 11

12 3 Tax return for self-employed 12

13 3 Tax return Remember to check that the prerecorded information is correct. You are responsible for correcting any errors, claiming any missing deductions and submitting the tax return within its deadline. If there is nothing to change, you are exempt from the duty to submit the tax return. Deadlines: Wage and salary earners 30 April Self-employed submitting on paper 30 April Self-employed submitting electronically 31 May If you have changes, tax return can be submitted electronically or on paper, but if delivered on paper, you will receive your tax settlement in August at the earliest. To avoid having to pay interest on your underpaid taxes, you have to make your payment before 31 May. 13

14 4 Tax settlement When the tax office has finished processing your tax return, you receive your tax settlement. This will happen some time between the end of June and the end of October. The tax settlement contains information about the incomes and assets on which your taxes have been calculated, how much tax your employer has deducted from your salary payment, and whether you have paid too much or too little in prepaid tax. Remember to notify about your change of address if you move, in order for the tax settlement to be sent to your right address. 14

15 5 Tax refund / tax to pay If too much tax has been paid (TILGODE / OVERPAID TAX) The refund will arrive within two weeks after the date of tax settlement. To ensure a safe and speedy refund we recommend transfer to your bank account. Contact your local tax collector (kemnerkontor) in order to change or inform about your bank account number. If too little tax has been paid (RESTSKATT/ UNDERPAID TAX) You will receive a paying-in slip with giro details. If your underpaid taxes exceed NOK 1000, the amount is split in two. You have to pay even if you file a complaint. If you pay too late, interest on overdue payments will be added to your bill. If you do not pay your tax, the tax authorities may make deductions from your salary, or an attachment charge may be taken out on your assets/property. In addition Norway has a number of agreements with other countries about international collection of taxes. 15

16 Part 3 16

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19 Electronic services By making use of our electronic services, you can do the following: Check, correct and submit your tax return Check your tax settlement Change your tax deduction card Notify relocations in Norway Contact us via skatteetaten.no 19

20 Sign up as an online user! As an e-user you get information about tax deduction card, tax return and tax settlement quickly, safely and in an environmentally friendly way, in electronic form. You will also receive other mail from us by electronic means. You will be notified by or SMS when the Tax Administration has sent you a letter. To get started, you have to get your electronic ID. You can for example choose among MinID or BankID. Mobil BankId Read more at taxnorway.no 20

21 MinID MinID is a personal electronic ID that provides access to public services. If you are going to use MinID, you have to order PIN-codes. You can order PIN-codes at: skatteetaten.no/pin (Bestill PIN-koder) Before ordering PIN-codes you must ensure that: You are registered with correct address in the population registry if you have a Norwegian national ID number. You are registered with correct Norwegian post address or address in your home country if you have D-number. PINcodes will primarily be sent to registered Norwegian post address, if this is given. 21

22 BankID BankID is a personal and simple electronic proof of identity for secure identification and signing on the internet. BankID is offered and issued by banks in Norway. Please note that not all code units are connected with BankID. Contact your bank for more information. 22

23 Sign up as an online user! For all the tax return was accessible on the web from 30 March. 23

24 Part 4 24

25 Tax return 2014 Don't pay too much tax check your tax return 25

26 Skatteetaten.no The deduction guide 26

27 Items in the tax return 27

28 Taxation of employment income in Norway 2015 Social security contribution 8,2% Employment income 28

29 Taxation of employment income in Norway 2015 Minimum deduction Personal allowance Tax on net income 27% Any other deductions Employment income above NOK , an additional tax of 9% (top tax) Employment income above NOK , an additional tax of 12% (top tax) For persons with tabular tax deduction card, salaries from other employers than main employer will be subject to tax deductions of 35%, 44% or 47%* 29

30 Taxation of employment income in Norway 2016 Minimum deduction Personal allowance Tax on net income 25% Any other deductions 30

31 Bracket tax is being introduced on personal income with effect from 1 January 2016 Bracket tax consists of four steps. You will not pay any bracket tax on the first NOK 159,800 of your personal income Step 1 Step 2 Step 3 Step 4 Income between NOK 159, ,900 Income between NOK 224, ,400 Income between NOK 565, ,500 Income over NOK 909, % bracket tax 1.7% bracket tax 10.7% bracket tax* 13.7% bracket tax 31

32 Minimum deduction This is an income deduction which is calculated automatically. The deduction is meant to cover expenses incurred in the job, for instance working-clothes, equipment, home office, board expenses related to long working hours, specialist literature and relocation expenses. If you are not regarded as tax resident in Norway your minimum deduction will be reduced by twelfth parts according to how many months (whole or in part) you have stayed in Norway. The minimum deduction for 2015 is 43% of employment income, but not more than NOK per year. 32

33 Personal allowance In principle everyone gets class 1. The tax class influences what amount is deducted from your net income before your tax is calculated (this is not entered into the tax return). For class 1 the personal allowance is NOK For class 2 the personal allowance is NOK For persons who are not regarded as tax resident in Norway, the amount in allowance is reduced proportionally according to how many twelfth parts of the year (whole months or part of months) the person has stayed in Norway. Class 2 If the spouse who lives in Norway supports the other spouse who lives abroad, class 2 may be given if the supported spouse abroad has gross incomes below a threshold of NOK (applies for income year 2014). 33

34 Limited / unlimited tax liability Unlimited tax liability stays of more than: days during any 12 month period or days during any 36 momth period Limited tax liability - Unlimited tax liability - Person A Tax liability Person B Tax liability days 90 days days 90 days days 100 days days 365 days 34

35 10 % standard deduction 10 % standard deduction can be claimed: For all years with limited tax liability to Norway For the 2 first years when the taxpayer is regarded as tax resident If both spouses are entitled to claim this deduction, then either both of them or none of them can claim it. 10 % standard deduction is calculated on the work income (employment income). The upper limit for the deduction is NOK

36 10 % standard deduction In addition to standard deduction you can get: Minimum deduction Personal allowance (given automatically) Deduction for trade union fee Deduction for Norwegian work-related pension scheme You cannot claim deductions for travelling to work, commuting expenses, interest on debt, home savings for young people (BSU) or child-care deduction if you claim the standard deduction. If the employer in addition to employment income also has paid tax free work-related remunerations, the value of this must be added to the income if you claim 10% standard deduction. 36

37 10 % standard deduction Person A 10% Person B 10% days 90 days days 90 days days 150 days days 365 days days 365 days days 365 days 37

38 10 % standard deduction

39 Deductions for commuters Information to foreign employees with work stays in Norway who commute to a home in the home country: If because of your work you have to stay outside your home and you visit your home regularly, you are regarded as a «commuter». Then you can claim deductions for your extra expenses because of this, that is extra expenses to board and lodging and travel expenses visiting your home abroad. This is called «commuter expenses». 39

40 Deductions for commuters You must have your real home in another country in order to claim this commuter deduction. Which dwelling is regarded as the real home? Common matrimonial home with spouse or children under 22 years. Common dwelling with spouse has priority before dwelling with others. Single (unmarried) persons are regarded as being resident at the place of an independent dwelling. Persons under 22 years can commute to parents 40

41 Deductions for commuters The dwelling is regarded as independent when: It is at your disposal for at least 12 months and you have access to it all the days of the week. The living space is at least 30 square metres. If more than one person is living there, there is a requirement of an additional 20 square metres for each resident over 15 years. The dwelling has running water and drainage. 41

42 Deductions for commuters Travel frequency Family commuters 3-4 times each year Single (unmarried) commuters every 3 weeks Commuters under 22 years every 6 weeks 42

43 Deductions for commuters Extra expenses with board and lodging (item 3.2.7) Board: number of days in Norway x 200 NOK = deduction Lodging: actual accomodation expenses in Norway = deduction* *If expenses for lodging exceed NOK , you must be able to document them with bank statements or payslips. 43

44 Deductions for commuters Travel expenses by visiting the home (item 3.2.9) Distance calculation: Number of times you have visited home distance in km (round trip) NOK any ferry tickets if these costs exceed NOK The rate for km exceeding km is NOK If you choose to claim a deduction for the ferry ticket, you must subtract the ferry distance. From 2014 no deduction is given for distances exceeding km. If you commute to a home outside EU/EEA, the rules about deductions for distances do not apply (except for documented expenses). Actual expenses (for example travelling by plane): Sum up the costs of travels. 44

45 Deductions for commuters NOTE! If your employer has covered your expenses, other rules apply both with regard to tax liability and right to 10% standard deduction. 45

46 Travel expenses to and from work in Norway Travel expenses to and from work in Norway (item 3.2.8) Distance from dwelling to work place (round trip) NOK 1.50 number of days The rate for kilometres exceeding km is NOK Deduction is given for up to kilometres each year. 46

47 Travel expenses Non-deductible expenses When the deduction for travel expenses to and from work (item 3.2.8) and/or travel expenses related to home visits (item 3.2.9) has been calculated, this amount is reduced with the nondeductible amount of NOK

48 Other deductions Child-care deduction (for verified expenses related to childcare you can get a deduction in net income with up to NOK for one child and NOK for each additional child below the age of 12) Deduction for paid trade union fee (upper limit - NOK 3850) BSU (home savings for young people) Deduction of interest on debts 48

49 Deductions for debt and debt interest If you have loans abroad, you must prove what you have paid in interest. You will not be entitled to complete deduction of debt/debt interest if asset/income of a real estate property abroad is exempt from taxation in Norway. If you have claimed deduction for debt and/or debt interest in the country where the house or holiday home is located, you cannot claim a deduction of this amount in Norway. You must inform about which deductions you have claimed in the other country, in item 5.0. Particular rules apply if you own a house or holiday home in another EEAcountry, and the assets, income and capital gains are tax exempt in Norway according to the tax agreement with the country where the house or holiday home is located. Then you will still get a complete deduction for debt and debt interest. For the income year 2014 this applies if the house or holiday home is located in Belgium, Bulgaria, Italy, Malta or Germany. In case debt/debt interest is to be limited, the total of debts and debt interest will be apportioned between Norway and the other country. The allocation key is based on the proportion between total assets in Norway, and the value of the real property in the other country. 49

50 Deductions for debt and debt interest If you are resident in another EU/EEA-country, and you have a limited tax liability to Norway, you can also get deduction for debt interest in comformity with rules similar to those that apply for persons tax resident in Norway under internal tax law and tax agreement. This special rule applies only when at least 90 per cent of your total incomes are tax liable to Norway. If you have incomes from real estate or business in another country that according to tax agreement cannot be taxed in Norway, then the deduction of interest will be restricted. Inside EU/EEA this applies when you own real estate or run a business in Belgium, Bulgaria, Italy, Malta or Germany. If you have real estate or business in one of these countries and no taxable assets in Norway, the deduction for debt interest will for practical purposes fall away. You must present enough information about your incomes outside Norway to make it possible to assess whether at least 90 per cent of your incomes are tax liable to Norway. Debt interest from other countries must also be verified. If you claim deduction for debt interest, you are in certain circumstances tax liable for your interest incomes from Norwegian sources. 50

51 Wealth tax (2015) The wealth tax is levied on the basis of your net assets. This may consist of bank deposits, shares, real property, car etc. Tax-free amount is net assets up to NOK Tax-free amount for spouses is NOK Net assets exceeding the tax-free amount is taxed: 0.7 % to municipality 0.3 % to the state 1 % - House taxable value is 25 % of market value. - House abroad taxable value is 30% of market value for house acquired in Otherwise taxable value is 40 % of market value. - Cars, motor bikes and other motor vehicles are valued according to the vehicle s list price as new. Percentage to be used depends on registration year of vehicle. 51

52 Remember the deadline 30 April! (No change = don't submit) 52

53 Useful links