Following submission of a Norwegian tax return 2022 for individuals under the general taxation scheme, once processed by Skatteetaten (the Norwegian tax office), a Tax Assessment Notice (TAN) will be issued showing the final position for the year. The Norwegian tax office cannot provide an exact date for when individuals will receive their 2022 TAN – most people will receive their assessment in June whilst others will receive it between August and November. The 2022 TANs will typically be available in Altinn (online filing portal) or posted directly to individuals. Failure to have submitted the 2022 tax return before the deadline of 30 April 2023 will mean it is unlikely the TAN is issued in June 2023. It is anticipated that the Norwegian tax authorities will issue minimal TANs during July 2023 or the first half of August 2023.
The TANs provide a summary of earnings reported for the tax year as well as how the Norwegian tax authorities have assessed this and the final income tax due by an individual. Any allowances or claims granted should also be shown. The TAN compares the final income tax due with the amount of tax withheld by the employer / paid by the taxpayer during the 2022 tax year and subsequently advises of any refund of tax that may be due to the individual or any additional amount payable to the Norwegian tax collector. Experience has taught us that given the often-complex working arrangements that internationally mobile employees have and the fact the Norwegian tax administration system is primarily designed for Norwegian individuals, tax assessment notices can often be incorrect. It is therefore critical that the TAN is reviewed by a Norway tax specialist who will be able to identify and resolve any potential errors. Failure to detect and challenge any errors can result in the Norwegian tax authorities deeming the TAN position to be final and correct and subsequently result in significant penalties and interest being charged, potentially to both the individual and their employer. In addition, the TAN acts as confirmation of Norwegian tax paid which could be presented to HMRC to support any foreign tax credit claim being made in the UK as part of the self-assessment process. Any over claim of credit in the UK is treated as a serious matter by HMRC.
Underpayment of tax
The TAN is a very important document and should not be ignored. If an individual receives a demand to pay Norwegian tax, immediate action should be taken – the demand will not go away. Where the Norwegian tax authorities believe that an individual has a tax liability and it is not paid, they have the power to instruct HMRC to collect the money from the individual in the UK through the ‘Mutual Assistance in the Recovery of Debt’ directive. If an individual has underpaid tax, the deadline for settlement will usually depend on when the TAN was issued:
- TAN issued between April – June 2023, the deadline for payment is 20th August 2023
- TAN issued after June; the tax due must be paid within 3 weeks of receiving the TAN
Where the liability is more than NOK 1,000, the amount due will be split into two instalments with the deadline for the payments depending on when the assessment was received. For example, if the TAN is issued in June 2023, the first instalment would be due on 20th August 2023 and the second instalment due on 24th September 2023. Where the payment deadline falls on a weekend, funds can be transferred on the Monday (the first working day) after the deadline. Failure to pay by the deadlines will return in interest accruing. You do not have to pay underpaid tax of less than NOK 100.
Overpayment of tax
Where a taxpayer has overpaid for the year, a refund will be issued. If Skatteetaten hold bank details on file, the funds will be automatically transferred to the specified bank account of the taxpayer shortly after the TAN has been released however refund amounts under NOK 100 will not be issued. If a bank account has not been specified by the taxpayer, the Norwegian tax office will issue a request in the post to the address registered in the National Norwegian Registry in order obtain the necessary information. It should be noted that where Skatteetaten issue a refund of Norwegian tax and it subsequently transpires it is not correct, they will seek recovery directly from the taxpayer – for this reason, it is important that the TAN is reviewed irrespective of there being a refund, demand, or neutral position. Furthermore, in some cases, refunds of Norwegian tax may be due to be repaid to HMRC rather than the taxpayer personally depending on the personal circumstances therefore it is the responsibility of the taxpayer to ensure their overall tax position is correct.
Should the amount of withholding tax deducted or additional tax be incorrectly shown on the TAN, or the taxpayer disagrees with the basis upon which their position has been assessed, an appeal can be submitted to the Norwegian tax office in writing either via the Altinn portal or post. An appeal must be lodged within a set timescale which should be detailed on the TAN.
If you or your employees have received a tax assessment notice recently and wish to discuss further, please do not hesitate to contact a member of our Overseas Employment Tax Team Carol Sim, Craig Burnett or Karen Groat or your usual AAB contact.