Living in Norway, Earning in the UK

[maxc]

I've finally obtained an email from the Norwegian taxman stating you don't need to pay formueskatt for your year of arrival (assuming you're in Norway less than 183 days in the year of arrival, and you don't have sufficient assets located within Norway at the end of the year of arrival to be subject to formueskatt).

Good news then which I hope is useful to anyone else who wants to know what the letter of the law is on formueskatt and foreign assets.

[bobt1302]

Hi guys

I am reading with interest as I am in the same situation. Came to Norway end of the summer and go home every weekend and only usualy spend max 4 days per week
working here. I have a UK ltd co and a UK agent and have been paying myself UK salary and have not taken any dividends since arriving as I thought that might be
an issue.

I am getting conflicting advice, someone at PSG accounting told me you cannot have a UK ltd company and work here and because the actual end client was a Norwegian
company that I must consider myself resident from day 1.

My understanding is that I can continue to pay PAYE and expenses etc via UK LTD and pay HMRC corp tax, emp and employers NI and PAYE for the year up to the date
that I become considered tax resident in Norway based on the 183 day rule which in my case would be next week so effectively from 1 Jan this year.

I am hearing conflicting versions and its all becoming quite a worry.

Cheers

[Little Ash]

Bob

I am not a taxation specialist (rather a normal punter in a similar situation to yourself) so I would suggest you will have to work out the official line via a combination of advice from Skatteetaten (Norwegian tax authorities) + a qualified accountant/tax specialist with experience in dealing with similar situations and the associated Double Tax Treaty.

On the face of it there appears to be 2 separate issues here. Firstly your personal taxation, then the tax position of your UK Ltd company.

As you say your personal tax situation will presumably be decided according to the 183-day rule. As far as I am aware once you are deemed to be tax resident in Norway, your UK employer will then be obliged to pay withholding tax to the Norwegian tax authorities, not HMRC. In addition, if you will be paying national insurance in Norway rather than UK (which probably makes sense if you plan to live in Norway in the long term), then your employer will also have to pay its employer's NI contributions to Norway. The rate in Norway for employer's contributions is currently 14.1%, which I believe is higher than the current UK rate.

The tax situation of your UK Ltd company is difficult to determine from the info you have posted. It sounds like you are an owner with a shareholding in the company. If the company's sole client is based in Norway, then I would've thought that the company would also be viewed as fully tax resident in Norway and therefore subject to Norwegian company tax rules. If you are living in Norway to fulfil a contract to a Norwegian client who is just one of many other clients (the rest of whom are not based in Norway), then I believe that only the proportion of the company's profits that are attributable to the Norwegian client would be subject to Norwegian tax. But as I say, I am not a tax expert, so you really need to get some professional advice on this aspect as the company's tax position will have a material impact on the amount of tax it has to pay.

Not sure if any of this helps or whether I have understood your situation correctly but pls feel free to post more if you wish to discuss further.

[bobt1302]

Thanks for your reply, since posting that question I have done some digging and it seems that the 183 day rule does not apply at all as we are not actually treated as seconded employees but are in fact considered hired in labour from day 1. This means that you have to take pretty much every red cent the company makes as PAYE and pay TAX and NI to the Norwegians unless you can convince HMRC to grant you an E101 in which case you can pay NI in the UK.

This means that you can also claim expenses to travel from home to end client site such as flights and hotels/apartments etc but in general the Norwegian system is basically IR35 !

I've read so many conflicting pieces of information that I decided to speak to a company that runs a payroll or umbrella system and thats pretty much what the said, not good and taxes are
high. From my calculations your retention rate based on calculations is around 61% then you actually have to pay the expenses from that which in my case are fights home every weekend which are at least £220 plus y rent in Norway which is nearly £900.

So I am leaving and coming home.

[Little Ash]

Bob
Hope it all works out.
Rgds