Tax Bill from Norwegian Tax Authority

[BlasterBates]

In the 2013 treaty (can't find 2012) but i "presume" it wouldn't be remarkably different.
Company hasn't shifted its operations

https://www.gov.uk/government/upload...-_in_force.pdf

Article 4
Resident
1. For the purposes of this Convention, the term “resident of a Contracting State” means
any person who, under the laws of that State, is liable to tax therein by reason of his domicile,
residence, place of management, place of incorporation or any other criterion of a similar
nature, and also includes that State and any political subdivision or local authority thereof.
This term, however, does not include any person who is liable to tax in that State in respect
only of income or capital gains from sources in that State.

3. Where by reason of the provisions of paragraph 1 an individual is a resident of both
Contracting States, then his status shall be determined as follows:
a) he shall be deemed to be a resident only of the State in which he has a
permanent home available to him; if he has a permanent home available to him
in both States, he shall be deemed to be a resident only of the State with which
his personal and economic relations are closer (centre of vital interests);

Article 7
Business Profits
1. Profits of an enterprise of a Contracting State shall be taxable only in that State unless
the enterprise carries on business in the other Contracting State through a permanent
establishment situated therein. If the enterprise carries on business as aforesaid, the profits
that are attributable to the permanent establishment in accordance with the provisions of
paragraph 2 may be taxed in that other State.

As i never moved permanently to Norway they wouldn't be seeking a cut of corporation tax.

This is correct unfortunately what is a definition of a "permanent establishment".
I spoke to an international tax lawyer and there are no predetermined time span for this, Dutch traders for example who crossed the border to Germany once a week ended up paying tax.
I did read Belgian tax guidelines and they tax any business that is there for more than 5 days a month.

My advice is to speak with an accountant in Norway as it is nether the less a valid argument.

[TimTyler]

This is correct unfortunately what is a definition of a "permanent establishment".
I spoke to an international tax lawyer and there are no predetermined time span for this, Dutch traders for example who crossed the border to Germany once a week ended up paying tax.
I did read Belgian tax guidelines and they tax any business that is there for more than 5 days a month.

My advice is to speak with an accountant in Norway as it is nether the less a valid argument.

I've been quoted 200GBP an hour for an accountant the deals in what is a pretty specialised area.

Think i maybe throwing good money after bad, the tax authorities know this hence why the go after small fish and fold to Apple, Google etc..

I've made an offer to them of the initial bill, less Norwegian NI as i have an A1 form ... minus my travel, hotel and food expenses which i still have receipts for.

[Sue B]

Permanent Establishment

Article 5
Permanent Establishment
1. For the purposes of this Convention, the term “permanent establishment” means a
fixed place of business through which the business of an enterprise is wholly or partly carried
on.
2. The term “permanent establishment” includes especially:
a) a place of management;
b) a branch;
c) an office;
d) a factory;
e) a workshop, and
f) a mine, an oil or gas well, a quarry or any other place of extraction of natural
resources.

For Ltd Company contractors, a Permanent Estalbishment exists under a) a place of management. Therefore regardless of number of days worked in Norway, where a PE exists, the Business Profits (as attributable to that PE) are taxable in Norway. Additionally, any remuneration paid to the employee has been borne by a PE of Norway, the 183 day rule under Article 15 is also failed, meaning Norwegian tax on income.

[SueEllen]

Article 5
Permanent Establishment
1. For the purposes of this Convention, the term “permanent establishment” means a
fixed place of business through which the business of an enterprise is wholly or partly carried
on.
2. The term “permanent establishment” includes especially:
a) a place of management;
b) a branch;
c) an office;
d) a factory;
e) a workshop, and
f) a mine, an oil or gas well, a quarry or any other place of extraction of natural
resources.

For Ltd Company contractors, a Permanent Estalbishment exists under a) a place of management. Therefore regardless of number of days worked in Norway, where a PE exists, the Business Profits (as attributable to that PE) are taxable in Norway. Additionally, any remuneration paid to the employee has been borne by a PE of Norway, the 183 day rule under Article 15 is also failed, meaning Norwegian tax on income.

Shame the OP didn't do his research before starting the contract as he would have found people like you to advise him at a much cheaper rate than £200 per hour.

[Sue B]

Its a common problem. There is so much legislation surrounding contractors working in Norway (indeed anywhere) that unless specialist advice is sought, it is very easy to read one small part of the legislation and assume that it applies to your circumstances, when your arrangement is actually unpicked on the very next page.

The problem is compounded by the fact that some people do just slip through the net, and as they don't get a tax bill, assume that they were correct, when in fact they were just lucky. OP was not lucky......

[stek]

I nearly got my fingers burnt in Ireland over this, I didn't take any chances in the end and squeaky cleaned it.

Same here in Denmark, I'm taxed here day one, maybe in UK too subject to DTA but I'm doing my level best no ensure I'm not tax resident in UK as well, the HMRC tests are fecking tight with no wriggle room as expected but in the end I'm prepared for the hit if I fail.

If I've learnt one thing about working in EU is there are no special treatments for tax no 183 rule, assume you pay tax locally from day one personally (and Ltd if going that way) and be very careful about being taxed in UK due to habitual residency tests and losing any tax breaks you might have gain the EU state, as here in Denmark as I'm on their ETS scheme (similar to the Dutch 30% contractor scheme) and if i'm taxed in UK too, I'd pay the difference to HMRC too, another 10% or so.

My advice to anyone (bit late for the OP) is to check and double check before taking any foreign role, unless you are relocating more or less permanently you can't escape being taxed twice.

[Fred Bloggs]

Good advice from Stek, and why I have never taken a role in Europe outside the UK.

[m0n1k3r]

Yes but it is EFTA and adopts EU rules including the four freedoms much like the UK will do on Brexit.

Not the customs union though. Everything to/from Norway has to go through customs.

[m0n1k3r]

+1

Think about it, a person, employee, partner, or company can't turn up and trade in a foreign country and not pay any local tax.

Defies logic...

Well, apparently UK companies should be able to, but damned be the foreign company who dare doing the same in the UK.

[m0n1k3r]

I nearly got my fingers burnt in Ireland over this, I didn't take any chances in the end and squeaky cleaned it.

Same here in Denmark, I'm taxed here day one, maybe in UK too subject to DTA but I'm doing my level best no ensure I'm not tax resident in UK as well, the HMRC tests are fecking tight with no wriggle room as expected but in the end I'm prepared for the hit if I fail.

If I've learnt one thing about working in EU is there are no special treatments for tax no 183 rule, assume you pay tax locally from day one personally (and Ltd if going that way) and be very careful about being taxed in UK due to habitual residency tests and losing any tax breaks you might have gain the EU state, as here in Denmark as I'm on their ETS scheme (similar to the Dutch 30% contractor scheme) and if i'm taxed in UK too, I'd pay the difference to HMRC too, another 10% or so.

My advice to anyone (bit late for the OP) is to check and double check before taking any foreign role, unless you are relocating more or less permanently you can't escape being taxed twice.

The 183 day rule applies to people posted abroad, e.g. ordinary employees sent to work abroad by their employer. A one-director limited company (virtually unknown outside of the British isles) takes their company with them wherever they go and they are locally employed by the UK company. The UK company should then be registered as a foreign branch in that country and maintain separate bookkeeping and submit separate financial statements and tax returns for revenue in that country.

The rules 183 day rules and the rules for posted workers etc are really for SMEs and up, where the directors stay in one place (mostly) and send their staff to work in different locations. They are not really applicable for UK-style, one-person limited companies.