Foreign enterprises must consider several issues when assigning employees to work in Norway. Magnus Legal is the professional partner that assists both foreign employers and expatriates with Norwegian compliance obligations. We also solve legal issues related to Norwegian tax and social security contribution, employment contracts and labour law as well as other relevant areas of commercial law.
All enterprises that have employees working in Norway, must obtain a Norwegian organisation number. This can be done by registering with the centralised company registers.
Non-Norwegian employers, that under a contract assign employees to work in Norway, are normally obliged to report the contract and the employees to a particular tax office. This reporting is done on the so-called RF-1199 form. Note that the principal of the contract is jointly responsible for filing the same report. The report must be filed within 14 days after the work has commenced. Failure to report may result in severe penalties.
Furthermore, the employer is obliged to file monthly electronical reports to the tax authorities for each employee. This monthly report is in relation to the employee's salary, the withholding tax deducted, the social security contribution, etc.
The employer must provide each employee with an annual statement that specifies their total salary, including all benefits and the tax deducted.
As a consequence of the assignment, the employer may need to pay Norwegian employer social security contributions and Norwegian corporate tax.
The employee must obtain a Norwegian ID-number (so-called “D-number”) and a tax deduction card. To obtain these, the employee must go in person to a tax office and undergo an ID-control.
If the employee is resident in Norway for tax purposes, the person is liable for tax on his global income and capital. In general, persons not resident in Norway are only liable to tax on income from sources in Norway. This includes salary from work performed in Norway.
Based on the reports filed by the employer the tax office will normally provide a pre-completed individual tax return. This is provided in March in the year after the income year. The employee must review the tax return and correct the return by claiming deductions or corrections.
In Norway, salary is taxed at progressive rates of up to 38.52 %. In addition, all members of the Norwegian social security system must pay 8.2 % in employee social security contribution.
When personnel are supplied to work in Norway, the contractor, the subcontractor and the principal are joint and equally responsible for the withholding of taxes and the payment of contributions to the Norwegian National Insurance Scheme.
To become acquainted with the relevant laws and regulations, involves time-consuming investigations. If you get an audit inspection, even the smallest error can lead to penalties or fines. This applies to both your company and your employees.
When you let Magnus Legal take care of the reporting obligations related to Norwegian activity including payroll services, you are guaranteed a correct assessment for the Norwegian Tax Authorities. You will not need to worry about choosing the correct deductions or about any recent changes in legal regulations.