Tougher penalties for incorrect or missing payroll reporting
From 1 January 2017, the Norwegian tax authorities are expected to be tougher in levying penalties on non-compliant employers in Norway. The penalties can be substantial, so updating on the payroll reporting obligations in Norway, and making sure they are met, could be one of the more important cost saving measures that you do this year.
A new payroll reporting scheme – “A-ordningen” – was introduced in Norway with effect from 2015. Due to this extensive change in the payroll reporting obligations, the tax authorities have held back on levying penalties for incorrect or late payroll reports (“a-melding”) in 2015 and 2016.
In 2017, two years after the introduction of the new payroll reporting scheme, the Norwegian tax authorities expect correct payroll reports to be provided within the statutory deadlines. As a measure to achieve this, the tax authorities are expected to start imposing penalties for incorrect and delayed reporting.
The current regulations allows for the tax authorities to levy a daily compulsory fine (“tvangsmulkt”) of NOK 105 per employee per day for which the payroll report is incorrect, with a total maximum of NOK 1 049 000.
In addition, employers who do not submit a payroll report within the statutory deadline, may be levied an additional charge (“overtredelsesgebyr”) of NOK 262 per day with a maximum of NOK 15 735.
It remains uncertain to what extent the tax authorities will toughen their practice, but substantially stricter sanctioning throughout 2015 and 2016 of missed or late reporting of contracts and employees on form RF1199 is an indication of what may come.
Please do not hesitate to reach out to us if you have any queries or are in need of help.