The parliament has passed a new legislation to harmonise the tax authorities’ assessment of various taxes. In addition to significant changes in regard to how the tax authorities are structured, there are also some material changes on how the tax assessment should be practised.
The law is applicable to all Norwegian taxes, except – at least for now – tax on real property. The intention is to co-ordinate all the procedural rules to ensure equal treatment of all taxpayers. Moreover, the new legislation contains changes aimed at improving the taxpayer’s legal position. The main changes for income tax are:
Introduction of a “Tax Statement” (Norwegian “Skattemelding”) as a common description of the annual tax return, VAT return form, quarterly reports and other notifications. All assessments will be based on this Tax Statement, unless the tax authorities in a particular case make a formal decision to depart from it.
The taxpayer may make amendments to the Tax Statement up to 3 years after it was filed. However, no adjustment may be made following a tax audit or a similar government initiative.
- The time limit for the filing of a complaint on a formal decision is extended from 3 to 6 weeks.
According to the new legislation, the tax authorities may reassess within 5 years, regardless of whether such reassessment is to the taxpayer’s advantage or disadvantage. The 5 year limit shall also apply where the taxpayer has given incorrect or incomplete information. The previous limit of 10 years is now only applicable in cases where the taxpayer is subject to a penalty tax of 40 or 60 per cent.
The new legislation also introduces some changes in the penalty tax: The ordinary penalty tax rate is reduced from 30 to 20 per cent. In instances where the taxpayer wilfully or with gross negligence has submitted incorrect or incomplete information, the tax authorities may apply another additional 20 or 40 per cent.
Finally, the collection of penalty tax shall be postponed until the complaints board or the court has rendered a final decision. The aim of this change is to secure compliance with Article 6 of the ECHR.
The Tax Assessment Act will become effective from 1 January 2017.