Norway Payroll & Tax Overview

Transcription

1 Norway Payroll & Tax Overview A GUIDE TO DOING BUSINESS IN NORWAY 2018

2 Contents 1.0 Key Country Facts and Public Holidays Business and Culture in Norway Visas and Work Permits Tax and Social Security Compliance Statutory Absence/Payments In-country Payroll Providers About This Payroll and Tax Overview 12

3 1.0 Key Country Facts and Public Holidays 1.1 Official Language Norwegian. 1.2 Currency Norwegian krone. 1.3 Country Dial code The country dial code is Country abbreviation The country abbreviation is NO, NOR 1.5 Statutory Filing Payment Methods The submission of annual accounts shall as a rule be made electronically via Altinn. The documents shall be submitted together and be legible. 1.6 National Minimum wage There is no general national minimum wages, but foreign employees must earn tariff wages obtain their work permit. 1.7 Filing Deadlines Payments to the authorities are made every second month and are payable by the 15 th of the month. For example: January and February Tax and Social Security payment is due for payment on 15 th March. Reporting is direct to the authorities by the payroll provider by the 15 h of the second month 1.8 Fiscal year The tax year is the calendar year, Jan. 1 through to Dec Time Zone Central European Time Zone UTC+01: Holiday Holiday Type 1 January 1 January New Year's Day National Holiday 13 April 29 March Maundy Thursday National Holiday 14 April 30 March Good Friday National Holiday 16 April 1 April Easter Sunday National Holiday 17 April 2 April Easter Monday National Holiday 1 May 1 May Labour Day National Holiday 10 May 10 May Ascension Day National Holiday 17 May 17 May Constitution Day National Holiday 4 June 20 May Whit Sunday National Holiday 5 June 21 May Whit Monday National Holiday 25 December 25 December Christmas Day National Holiday 26 December 26 December Boxing Day National Holiday

4 Business and Culture in Norway 2.1 Establishing as an Employer An employer must be registered in Norway to pay employees Tax registration is done at the Norwegian Tax Administration, once registered a tax number is provided which is needed for tax and social security to be paid over. A tax number is required for tax and social security to be paid. A copy of the company registration paper (in the country where the company is registered) is needed. Registration can take up to one month and noone can be employed before the company is registered. In order to register of Company Accounts, all enterprises with an accounting obligation shall submit their accounts to the Register of Company Accounts in Brønnøysund. The only exception to this rule is Norwegian-registered foreign enterprises with a turnover of less than NOK 5 million that are engaged in activity on the Norwegian continental shelf or in temporary onshore activity in Norway. For Norwegian-registered foreign enterprises (NUFs) with a reporting duty in Norway, both the branch accounts and the accounts of the foreign enterprise must be submitted. The duty to prepare and submit annual accounts apply even if the entity is inactive. This obligation also applies to entities being wound up until their registration is finally deleted. The following documents must be submitted: Annual report Income statement Balance sheet Notes to the accounts Cash flow statement (not for small enterprises) Auditor's report (if the auditing obligation applies) More requirements apply if the entity is the parent company in a group and obligated to submit group accounts. Employers also have to be aware of the EU temporary employment agency directive, which is applicable in Norwegian law from 1 January The purpose of the directive is mainly to better the working conditions of temporarily hired employees. 2.2 Employment The Employment Protection Act requires the employment contracts to be in writing. The contract must state factors of major significance for the employment, such as a description of the place of work, the work to be performed, the trial period, the wage and wage-payment procedures, whether the position is permanent, fixed-term or temporary, the duration and disposition of the agreed daily and weekly hours, length of breaks, supplements and other remunerations not included in the pay, the number of vacation days and holiday pay, the period of notice required upon termination of employment and any relevant information concerning collective agreements regulating the employment relationship. The Employment Protection Act lays down the minimum requirements for the work environment, the workplace, working hours, employment contracts, employment protection, dismissal, redundancy and summary dismissal. There is no statutory minimum wage. This is regulated largely by collective agreements. However, wage levels and minimum wages are, in general, laid down in collective bargaining agreements. For some business sectors, regulation regarding minimum wage is passed as secondary law. This mainly comprises the construction industry, the cleaning industry, the dockyard industry and the agriculture/garden industry.

5 3.0 Visas and Work Permits 3.1 Visas If you come from a country outside the EU/EEA and wish to work in Norway, you need a residence permit. If you do not already have a residence permit, you must apply for a residence permit for work. Previously this was called a work permit. This may for example be a residence permit for skilled workers, ethnic cooks, seasonal workers, self-employed persons or employees in a humanitarian, non-profit or religious organisation.

6 4.0 Tax and Social Security 4.1 Tax Norwegian tax legislation distinguishes between full tax liability for resident taxpayers and limited tax liability for non-resident taxpayers. Residents are liable to income tax on their worldwide income, whereas non-resident taxpayers are only subject to income tax on specific types of income from Norwegian sources. Non-residents are liable to Norwegian (income) tax on: Income from conducting or participating in business carried out or managed in Norway, including the hiring out of labour. Income from movable or immovable property situated in Norway (including dividends from shares in Norwegian companies). Remuneration (including pensions) received as a director or member of a board of directors or the like of a Norwegian company or entity, or bonus, gratuity, or the like received in any capacity from such company or entity. Where an individual is tax liable to Norway only a part of the income year, the income is annualised. The Norwegian income tax system for individuals is based on a dual tax base system: general income and personal income Tax on ordinary income Persons 23.0% Persons in Finnmark og Nord-Troms 20.5% Taxable income (NOK) Tax on excess (%) Over Not over 0 169, , , , , , , , National insurance contribution Earned income 8.2% Pension income 5.1% Income from self-employment 11.4% Lower limit for paying national insurance contribution NOK Wealth tax State NOK % State NOK % Municipality NOK % Municipality NOK % For persons, not tax resident in Norway there is no threshold for wealth tax to the municipality. The wealth tax to the municipality is calculated from the first Norwegian krone. Other tax rates Foreign artists and athletes 15% Tax on pension paid to persons not resident in Norway 15% Tax on dividends paid to shareholders not resident in Norge (or a lower tax rate according to a tax treaty) 25% In Norway, it is up to each municipality to establish a tax on real property. Contact your local municipality to find out if you have to pay property tax.

7 4.2 Registration The National Insurance Act requires the employer to notify the Register of Employers and Employees (AA Register) whenever it hires and terminates an employee. Notification of hiring must be made by the end of the employee's first week of work. Notification of termination must be made by the end of the week after the employee's last day of work. Information Required, identification number, Bank account details, copy of employment contract, (or sheet / list of salaries / benefits, and number of agreed days of holiday). Forms Completed and Registration with Authorities - The employee has to have a tax card for the present year. The employer has to report new employees and employees who have stopped working for the company to the register of employees. The register is situated in Oslo. There is one office for the whole country. They need to be informed of: name, address, personal ID number, part-time and full-time working hours (%) and their start date or end date. The employer must report these to the authorities within 8 working days There is a legal obligation on the employer to have a savings fund for the employee. The minimal saving amount is 2% of gross salary. 4.3 Social Security Employers must withhold National Insurance contributions for all employees in Norway, except those who are insured under the scheme of another country with which Norway has a national insurance agreement and who have documented such coverage by filing form E101/A1 or submitting other equivalent documentation from the home country's national insurance scheme. If an employer fails to deduct and pay National Insurance contributions from wages, the employer will be held liable for the amount that should have been withheld, and also may be held criminally liable, under the Tax Payment Act, for fines and imprisonment of up to six months, or up to one year for deliberate repeat offenses.

8 5.0 Compliance 5.1 Employer Registration All businesses operating in Norway must register with the Register of Business Enterprises, the Central Coordinating Register for Legal Entities and the local tax office, by filing the Coordinated Registration Notification (BR-1010). Every registered business is issued an organisation number, which must be included on all business documents. 5.2 Starters/Registration The partners need to deposit the paid-in minimum capital (at least NOK 30,000) in a bank. The procedure is done electronically through the bank s online platform. The web-based filing system allows for electronic signature of the registration form and for the possibility to upload all attachments (i.e., copies of signed versions of the memorandum, auditor statements, and the rest) electronically. It is still possible to file all documents manually by regular mail as well. In some cases registration inquiries cannot be filed online (i.e., mergers, some cases of increase of share capital, and so on) and must be filed by mail. VAT registration is required when the company s turnover has exceeded NOK 50,000. VAT cannot be charged on goods and other items before VAT registration is completed. However, in certain cases the company may register for VAT before starting business operations. The VAT registration form can be submitted at the same time as filing for company registration. The employer must arrange for a mandatory occupational pension plan for his or her employees. The fees vary with the benefits and level of coverage in the pension plan. The minimum requirement is 2% of each employee s salary (within average levels of salaries). Pension scheme must be established within 6 months of the date on which the obligation to have an occupational pension scheme arose. The employer must have a workers' injury insurance for the employees. The insurance company is chosen by the employer. 5.3 Leavers/De-registration Legal requirements - if nothing is said in the employment contract, term of notice is 1 month. Normal term of notice for Norwegian employees is 3 months, after trial period. Forms and Returns / De-registration the register of employees needs to be informed of joiners /leavers

9 6.0 Statutory Absence/Payments 6.1 Annual leave Employees are entitled to 25 working days' paid annual leave. Employees who are age 60 or over by Sept. 1 of a given calendar year are entitled to an additional 6 working days' paid leave. Working days are defined to include all days except Sundays and statutory church or public holidays. During annual leave, employees are entitled to a special pay rate. Annual leave pay is equal to 10.2 percent of the employee's wages in the previous year. For employees age 60 or over, annual leave pay is increased by 2.3 percent. Annual leave pay is usually due on the last normal pay day before the leave is taken, but an employee is entitled to demand that payment be made one week before the leave begins. Employers are required to discuss annual leave dates with each employee, but if they cannot agree, the employer may set the dates. However, employees are entitled to take three weeks of their annual leave during the period between June 1 and September 30, and may take the remainder of their leave in one period. All annual leave must be taken in one calendar year, with the exception that the parties may agree in writing that up to 12 days of annual leave may be carried over to the following year. Educational leave: An employee who has worked for at least three years, the last two of which are with the same employer, is entitled to take full or partial leave in order to attend organized vocational studies, as long as such leave does not interfere with the employer's planning of operations and personnel assignment. An employee who has already taken education leave may not take it again until the time since commencement of the prior leave is: At least twice the duration of the leave, and At least one year (unless the original leave was for less than a month). 6.2 Leave to care for dying relatives An employee taking care of a close relative in the home who is terminal is entitled to 20 days leave 6.3 Maternity and paternity leave Statutory maternity leave is 59 weeks with 80% of their regular salary or 49 weeks with 100% salary. The upper limit for the yearly amount refunded by the gov t is based on a maximum of a yearly salary of NOK The father has to take a minimum of 10 weeks paternity leave. Employees do also have the right to 1 year of unpaid leave in addition to the paid statutory leave 6.5 Parental care leave Each parent is entitled to 10 days per year paid leave to care for a sick child under the age of 12. If there are two or more children, the amount of leave is increased to 15 days. If the child is under age 18 and is disabled or chronically ill, the amount of leave is increased to 20 days. The leave periods are doubled for single parents. If the child is under age 18 and has a potentially life-threatening illness, each parent may take as much leave as is necessary for the child's treatment.

10 6.7 Prenatal examinations leave Pregnant employees are entitled to paid leave for prenatal examinations that cannot reasonably take place outside working hours. 6.8 Religious leave Employees who are not members of the Church of Norway are entitled to a maximum of two days of unpaid leave per year to celebrate religious holidays. Employers may require employees to work extra hours, without overtime pay, to compensate for the religious leave taken. Employees who wish to take religious leave must provide 14 days notice to the employer. 6.9 Sick leave Statutory Employer pays the first 16 days of sickness, after this the authorities do the refunding to the employee. Limitation of the amount to be refunded is approximately a yearly salary of NOK 510,000. If an employee earns more, it is voluntary for the employer to pay the employee the difference Military service leave An employee is entitled to a leave of absence for military service, but must notify the employer before commencement of such service if the employee wishes to return to his or her employment after completing military service. The employer is not required to permit the employee to resume his or her duties until one month after receiving notification of the date on which the employee can resume work.

11 7.0 In-country Payroll Providers Established for over 30 years, Cintra is an award winning provider of HR and payroll services. We provide a comprehensive mix of HR and payroll solutions to help you manage people from recruitment to retirement. +44 (0) carsten.staehr@cintra.co.uk Since 2002, Expaticore has specialised in Local National and Expatriate payroll, Assignment Management Services and International HR Consulting Services amorris@expaticore.com F&L is an essential resource for companies, providing advice when they expand across borders. We set ourselves apart from other firms by employing the best people in the industry and through the range of services we provide including tax +44 (0) info@fitzandlaw.com The Adonis Payroll Module is a comprehensive payroll system designed to meet the needs of the largest global organization plus medium-sized and small businesses looking for a flexible payroll system Per.Ove.Kviteberg@adonis.no

12 8.0 About This Payroll and Tax Overview 8.1 Copyright All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher. 8.2 Disclaimer Every effort has been made to ensure that all information in this booklet is correct at the time of publication. This information should be used as reference only and not as a sole source of decision making. 8.3 The Global Payroll Association Global Payroll Association is the first international payroll association of its kind. We are a central hub for all-things payroll. A one-stop-shop supplying comprehensive directories, interactive training and in-depth country resources. We are here to help you with your global payroll needs, no matter how complex, connecting you with the world s leading experts and offering a forum to network with other like-minded global professionals. Global Payroll Association welcomes international payroll, HR and financial professionals of all levels.

13 The United Kingdom GPA Education Ltd/Global Payroll Association 49 Greek Street London W1D 4EG