Over the years I have received several questions from clients outside of the EU regarding the necessity of a residence permit (the official name for work permits in Norway) when the stay in Norway is for a short period of time. Typically the stay will be longer than a week, or two, but less than 3 months. As there are several consequences of not obtaining a residence permit when it should have been obtained, it is important to know if the trip requires a work permit.
On the UDI (the Norwegian Directorate of immigration) website you will find that an employee or business owner, what ever positition you may have, you/the employee may enter Norway without a residence permit if the purpose of the trip is considered a business trip. Whether you will need a visa will depend on whether you come from a country where a visa is required and is not explained here.
What is not so clear is what defines a business trip.
What is clear is that it does not entitle you to work or carry out any business activities during your visit.
As people being employed in any company when travelling on behalf of an employer, is “working” when on a business in comparison to being on vacation it is vital to know what part of what they consider to be work falls under the definition of a “business trip” not requiring a residence permit?
Norway has been part of the Schengen area since 2001. So if you are required to obtain a visa you are travelling to Norway on a Schengen C if the purpose of your trip is business. On 5 April 2010, the EU Visa Code came into force, gathering into a single document all legal provisions on visas. The Visa Code increases the transparency and ensures equal treatment of applicants while harmonizing rules and practices for the Schengen States applying the common visa policy.
Neither the Visa code nor UDI’s rules regarding people from outside of EU not requiring a visa, have however defined what qualifies a business trip.
One thing that is clear is that the business trip must not involve work for, or on behalf of employers within any of the Schengen countries. A business trip is per definition a trip taken on behalf of your non-Norwegian employer.
Furthermore, just because the trip is of a duration of less than 3 months and it is taken on behalf of or in the interest of a foreign employer will it qualify as a business trip.
Consequently, if the purpose of your/the employees’ trip is to participate in projects or assist on projects lead by personnel on a permanent establishment of your/the foreign employer, a residence permit is required unless the work may qualify as business trip. In general the business activities are limited to the following activities:
- Participation in meetings;
- Conducting negotiations;
- Purchase of goods;
- Conclusion of contracts with Norwegian business partners.
As a general rule the following activities are for example not permitted during a business trip;
- Participation in the operational business, respectively in production
- Performance of services (with the exception of technical assistance, contact us for further information)
What is important to note is that if the type of work you/the employee is conducting extends beyond the permitted activities, you/the employee may not only be violating the residence permit rules, but the foreign employer and the Norwegian contract party will also violate one or several reporting obligations. If in doubt if you trip qualifies as a business trip we urge you to send us a request at firstname.lastname@example.org or call our office at + 47 94 85 21 22 for further information and assistance. read more →
If a non-Norwegian company has sent one or several employees to work in Norway, the company may have a duty both to report the employee’s salary as well as to withhold tax from the employee’s salary and pay taxes in Norway on a bi-monthly basis. This article briefly explains the reporting obligations the company is required to perform when personnel is working in Norway irrespective of the duration.
It is strongly recommended that the company seek specific advice from us or other international tax specialists prior to taking on a project in Norway to ensure that the company acts in compliance with Norwegian law when undertaking any project. Non-compliance may lead to fines and additional tax for both the foreign company as well as the Norwegian business partner/contractor.
Duty to report an employee’s presence in Norway
Unless it is clear that the work in Norway is defined as business trips, the company will as a minimum have a duty to report the individual’s presence in Norway. In order to perform this reporting, the company must
- Register with the Norwegian Enhetsregister (company registry as a foreign entity NUF)
- Then register the employee(s) on form RF 1199
Tax reporting obligation
Specific advice is recommendable as it may very well be, that the foreign company in addition to reporting the individual’s presence have a duty to report the salary income earned in Norway.An evaluation of the individual’s tax liability as well as the company’s tax liability is therefore strongly recommended.
An obligation to report the employee’s salary exist when the income is taxable due to Norwegian internal tax law, find more about this topic here. The reporting obligation exist even if the income may be excempted from taxation in Norway due to a tax treaty.
Duty to withhold and pay tax in Norway
If the income is taxable both in accordance with Norwegian internal law and any applicable double tax treaty, the foreign company is in addition to reporting the presence, and reporting the salary, obligated to withhold and pay tax and if not excempted also social security contributions will be payable in Norway.
Although the employee bears the responsibility to ensure sufficient amount of tax is paid in Norway, the employer has a tax withholding obligation and the employer must ensure that the tax is paid.
Bi-monthly payment and reporting of tax and social security contributions
The foreign company/employer shall withhold tax and employee social security contribution from the employee’s salary and other remuneration every month. Employers are furthermore obliged to report and pay Employer Social Security contributions to the Norwegian National Insurance scheme. The employer’s rate of National Insurance contributions is currently 14.1 %. In addition the employer will have an obligation to contribute to Norwegian Pension schemes unless the company may obtain an exemption.
The deadlines for submitting employers’ payment record forms and paying payroll withholding tax and employee and employer’s National Insurance contributions is:
|January – February||by 15 March|
|March – April||by 15 May|
|May – June||by 15 July|
|July – August||by 15 September|
|September – October||by 15 November|
|November – December||by 15 January|
Year end summary reporting
A year end summary is filed in January following the tax year.
Shadow Payroll Assistance in Norway
If the employees have a duty to pay tax in Norway, the company will as mention be required to withhold and pay tax. It is strongly recommend that the company get a shadow payroll assistance in Norway to ensure correct tax withholding and correct and timely reporting and payment of tax and social security contributions.
Please contact us at + 47 94 85 21 22 if you need help with reporting or you have questions on this topic.
- Malm Advokatfirma
- + 47 94 85 21 22