Published: Bedriftsprofilen
Hiring and using expatriates to do a job in Norway might result in considerable additional expenses, when Norwegian rules are not followed. The law firm Brækhus Dege can assist Norwegian and non-Norwegian companies in avoiding the potential problems.
The need for foreign labour in Norway is growing. This implies that the steadily increasing number of expatriates working in Norway must relate to the Norwegian tax authorities, Norwegian labour law and several other rules. Since the EU expansion in 2004 the number of expatriates performing temporary work in Norway has increased dramatically. But if you hire expatriate workers or hire an expatriate company to do a job, it is important to mind the formalities.
- The potential problems are many. Problems may arise in connection with tax, value added tax (VAT), work- and residence permits, the labour law and different types of insurance, says partner and lawyer in the law firm Brækhus Dege, Øystein A. Sverre. When the Norwegian rules are not followed, the companies hiring expatriate workers might face unexpected costs.
Sverre speaks from experience. For 25 years he has worked with the problems in connection with expatriate workers in Norway, especially in connection with the oil-industry, and in recent years he has also achieved such experience in many other business areas.
Serious consequences
Generally speaking, Norwegian companies are improving at having among other things, contracts and insurances in order, says partner and lawyer Petter Jørgen Pettersen. He runs the subsidiary Brækhus Dege Consult, which handles the value added tax (VAT) for non-Norwegian companies. None the less, the law firm repeatedly experiences that Norwegian companies mess up.
- What may happen is that the taxman/town treasurer shows up, demanding that the Norwegian company pays the expatriate workers` tax after they have left. This is not uncommon, says lawyer Toralv Follestad. A possible scenario is that the taxman/town treasurer secures its demands from the hiring companies` customers.
Shared responsibility
- Particularly in the area of tax, serious problems may arise, Sverre says. Both the company hiring and the company providing workers are responsible for calculating and paying the expatriate workers’ salary withholding taxes. In addition the hiring company may be considered as the real employer of the expatriate workers in question. This company will then be responsible for paying payroll tax and salary withholding tax for the expatriate workers.
- We have seen the taxman in Rogaland, which is the treasurer of the Central Office, Foreign Tax Affairs, to an increasing extent, has made decisions establishing such a responsibility, Follestad says. If the non-Norwegian company has completed its mission in Norway and left, the Norwegian firm is put in a difficult situation, since it also is responsible for foreign workers taxes.
- The authorities are signaling an increasing effort on their part in collecting these taxes, lawyer Maria Ervik Løvold says.
Easy to avoid
The law firms advice is to be alert – and to seek expertise in the particular field in question.
- Our best advice is to plan ahead, Ervik Løvold says. If you prepare thoroughly, hiring expatriate workers is unproblematic.
- We can help with everything from the mere basics, like getting residence-permits – until writing the entire contract, Sverre says. We offer value added tax (VAT)-representation, payroll-services, assistance with acquiring working permits and other necessary contact with the Norwegian authorities. Thus, if needed, Brækhus Dege can take care of the entire administration of a company when starting up.