The National Audit Office believes that the work to uncover Norwegian taxpayers’ income and assets abroad is not good enough.
Auditor General Karl Eirik Schjøtt-Pedersen, here on a previous occasion. Photo: Fredrik Solstad / VG / NTBPublished:
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The National Audit Office believes that the Tax Agency’s work in uncovering the income and assets of Norwegian taxpayers abroad has not been good enough.
This appears from a recent report handed over by Auditor General Karl Eirik Schjøtt-Pedersen to the Storting’s control committee on Thursday.
─ It is objectionable that the Norwegian Tax Agency does not control the reporting of foreign assets better. They must tighten control in this area, says Schjøtt-Pedersen in a message.
The Auditor-General points out that the Swedish Tax Agency has calculated an annual tax loss of around NOK 7 billion.
The consequence is that the community loses significant income and that confidence in the tax system is put under pressure, according to him.
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The National Audit Office’s overall impression is that:
The tax authorities point to hidden income and assets abroad as one of the most important risk areas in the personal area. A large number of taxpayers have not followed the rules. Nevertheless, the level of control in the Tax Agency has been low. The agency has made limited use of information on Norwegian taxpayers’ income and assets from abroad, and the scheme for assistance requests is too poorly utilised. The use of drugs has been too little geared towards the large amounts of hidden income and assets abroad. It may have reduced the perceived risk of being discovered. Overall, this is objectionable
“It is not satisfactory that the Ministry of Finance has neither ensured sufficient knowledge about the degree of compliance with the global tax obligation nor about the Tax Agency’s control of this”, concludes the National Audit Office.
– Surprised me the most
In 2021, the agency received information from other countries that approximately 344,000 people with a tax liability to Norway had financial accounts abroad.
As many as 71 percent of these did not report their foreign assets in their tax return. In addition, many gave incomplete information, points out the National Audit Office.
– One is surprised when three out of four do not report what assets they have abroad. But what perhaps surprised me the most was that the Tax Agency’s control was so limited, says Shjøtt-Pedersen to E24.
He believes that the Norwegian Tax Agency has large amounts of information which they do not use, at least not well enough. Then it goes without saying that the control will be too poor, he believes.
Hiding property
Another example is property.
In the tax return for 2021, 85,000 people reported that they owned real estate abroad. 3.5 per cent of these stated that they had rental income.
The survey indicates that twice as many own property abroad and that 13 per cent rent out, according to the National Audit Office.
Lack of will
The tax authorities assess unreported income and assets i abroad as the biggest risk area in personal taxation and believes that knowledge about the reporting obligation is limited.
Therefore, they have prioritized measures that contribute to increasing knowledge about what must be reported, according to the National Audit Office.
However, the National Audit Office’s survey shows that many are aware of this duty.
A lack of reporting can thus be due to a lack of will, and not a lack of knowledge. The fact that the Swedish Tax Agency places more emphasis on information and guidance than control means that the perceived risk of being discovered for tax evasion is too low, the National Audit Office believes.
─ It should not be the case that one can easily evade tax by placing the money outside Norway. Abroad is not an economic free zone, says Schjøtt-Pedersen.
The National Audit Office
The National Audit Office is the Storting’s largest control body, and investigates the government, state administration and state-owned companies. Issues that the National Audit Office examines include whether government accounts are correct, whether what the Storting has decided is carried out in an efficient manner, how the money allocated by the Storting is used and whether the state administration works in line with laws and regulations. The National Audit Office has around 440 employees and is led by Auditor General Karl-Eirik Shjøtt-Pedersen, who took over from Per-Kristian Foss as of 1 January 2022. The National Audit Office has examined the work of the Tax Agency in uncovering Norwegian taxpayers’ income and assets abroad, as well as cryptocurrency, in the period 2017 to 2021. Show more
The Norwegian Tax Agency points out that it has collected approximately NOK 1,800 billion on average annually in taxes and fees for the community.
Society is still missing out on tax revenue because some people don’t want to follow the rules, according to them.
– The Tax Agency’s mission is to work to ensure that as many people as possible follow the rules, ensure that the correct tax is paid and that we maintain people’s trust in the Tax Agency, says tax director Nina Schanke Funnemark in a separate press release.
Disclosure
Both property and income abroad are taxable in Norway.
In May last year, E24 revealed that 374 properties in Dubai, one of the world’s most secretive tax havens, can be linked to owners with a Norwegian background. The value of the properties is estimated at well over one billion kroner.
Investigations carried out by E24 also show that few of them have reported the values on the Norwegian tax return in line with the law.
Increased effort
The tax authorities thought the revelations were sensational.
Later, in October last year, the Swedish Tax Agency held a seminar on hidden income and assets abroad with Scandinavian colleagues, where Dubai was an important topic.
Around the turn of the year, the Swedish Tax Agency also announced increased efforts to uncover hidden assets abroad.
– Work is still ongoing in the wake of the Dubai leak. It is too early for us to be able to say anything more about how many cases will possibly be opened in the wake of the leak, or to comment on estimates of asset values and any income that has not been reported to the Norwegian authorities, said head of tax crime Erik Nilsen to E24 then.
Let it be
At the same time, it also became known that the Norwegian Tax Administration has known for several years that Norwegians are registered with valuable properties in Dubai, but without entering this in the tax return.
Previously classified figures show that the Tax Authority has failed to request information from the Emirates that could reveal them.
According to a response from Finance Minister Trygve Slagsvold Vedum (Sp), to a question from SV’s Cato Brunvand Ellingsen.
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2023-10-19 12:01:53
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