Norwegian Certificates of Pay and Tax Deducted – 2016 – Due 1st February 2017

The Norwegian tax authorities have issued guidance that employers are required to provide their employees with a summary of income, allowances and deductions for the income year in question to all employees who have been working in Norway. These individuals will all have been on a Norwegian wage tax report.  The tax authorities original guidance that the requirement to prepare the annual Certificates of Pay and Tax Deducted would end with the introduction of Real Time online reporting in January 2016 has been amended.  However there are changes to the process from what it used to be.  The Certificate is not now required in a specific format and it does not have to submitted to the Norwegian Tax Authorities, it only needs to be issued to employees (or sub-contractors treated as employees for Norwegian tax purposes).

The Certificate is required by employees in order for them to complete their Norwegian income tax returns.  If the employer is taking responsibility and completing the Norwegian income tax returns on behalf of their employees it should be sufficient for the Certificate to be held with the tax return records. If professional advisors are engaged to complete the Norwegian income tax reruns, it may be a good opportunity to advise employees of the arrangements in place and to let them know that their annual Norwegian Certificate of Pay and Tax Deducted has been given to professional advisors to allow them to complete their Norwegian income tax returns on their behalf.

The benefit of this arrangement, rather than issuing the Certificate directly to employees,  is that employees are not tempted to claim credit in the UK for the amount of Norwegian wage tax shown on the Certificate. The wage tax paid figure may well include an element of Norwegian National Insurance and the reported amount may only be a best estimate of the final income tax due.  The assessment notice, which is issued around October, is the document that must be used for this purpose. This misunderstanding of the figures is one of the single biggest triggers for HMRC enquiries into people who have been working in Norway.

Nevertheless in order to comply with the guidance employers may wish to distribute the information in some format. If the Certificates are distributed to employees, an advisory note should accompany them. This should state that the Certificate should not be used to support a claim of Norwegian tax credit in their home country income tax return. The  final figures to be used to claim credit in the home country will be shown on the Assessment Notice which will be issued by the Norwegian tax authorities in October 2017.