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What is the relevant legislation relating to tax administration and controversies? Other than legislation, are there other binding rules for taxpayers and the tax authority?
The relevant legislation for tax administration and controversies is the new Tax Administration Act of 2016, which has been in effect since 1 January 2017.
Income and wealth tax are assessed based on the provisions of the Tax Act of 1999. Other important legislation includes the Tax Payment Act of 2005, which governs issues relating to the collection and payment of taxes.
Norway also has important special tax legislation, such as the Property Tax Act of 1975 and the Petroleum Tax Act of 1975.
There are a number of relevant regulations to the tax laws. The most important are the comprehensive regulations issued by the Ministry of Finance and the Directorate of Taxes, respectively, to supplement and implement the Tax Act of 1999.
Other than legislation, there are sources of law and binding rules applying to both taxpayers and the tax authorities. These include the following:
- Norwegian parliament tax resolutions. These are annual parliamentary resolutions regarding taxes on income and capital in Norway. Parliament’s resolutions govern, among other things, tax rates and duties that are set annually;
- the preparatory documents for legislation are highly relevant when legislation is interpreted. This includes documents from the Norwegian parliamentary committee, as well as protocols from proceedings in the Norwegian parliament;
- an important source of law is the EEA Treaty with which Norwegian tax laws must be compliant. The EEA Treaty is implemented into Norwegian legislation through the EEA Act of 1992;
- Norway is party to a large network of tax treaties and other international conventions. Tax treaties and international tax conventions have status as Norwegian legislation when the Norwegian government ratifies them;
- case law from the Supreme Court acts as precedent. However, case law from a lower court can serve as a relevant argument at that instance; and
- the Norwegian tax authorities issue binding and non-binding (guiding) tax rulings, as well as statements of general interpretation on tax matters. The Ministry of Finance also issues statements of general interpretation. The Directorate of Taxes collects and issues guidelines for the tax administration annually in a comprehensive publication collection called Tax ABC.
What is the relevant tax authority and how is it organised?
The Ministry of Finance is the highest governmental tax authority. The Ministry delegates the administration, supervision and control of tax matters to the Directorate of Taxes. Tax Administration offices do the daily administration, supervision and control of taxpayers. Currently, there are five regional Tax Administration units and numerous local offices. However, the Norwegian Tax Administration is to be reorganised from 1 January 2019. The tax authorities will enter into an organisational model with four nationwide performance units for the core business. In addition, there will be three common functions: development; IT; and administrative services. Approximately 57 local tax offices will still be open to the public. In the new organisation, all tax offices will have nationwide task-solving and be included in the performance units. Formally, the dealings with the taxpayers will be with the local tax offices.
The Petroleum Tax Office assesses taxpayers engaged in exploration and pipe transportation of petroleum.
Additionally, there are two very important bodies within the tax regions:
- the Central Office for Foreign Tax Affairs (COFTA) is responsible for tax reviews of foreign companies and their foreign employees on assignments or work in Norway or on the Norwegian continental shelf; and
- the Tax Office for Large Entities deals with entities above a certain size, and with taxpayers subject to the special tax regimes for shipping and electric power production.
Municipal treasurers collect the taxes.
Compliance with tax laws
How does the tax authority verify compliance with the tax laws and ensure timely payment of taxes? What is the typical procedure for the tax authority to review a tax return and how long does the review last?
It is the taxpayer’s responsibility to ensure that the tax return complies with the tax laws.
The tax authorities may use different types of controls to verify the fulfilment of tax obligations, such as automatic and manual controls. All tax returns undergo an automatic mechanical control, which picks out tax returns for further evaluation. Tax return data and figures are used to determine manual controls. Every year, the Tax Administration offices evaluate which data and figures should be subject to particular manual control.
To ensure timely payment of taxes, delayed payment can result in penalty interest. Furthermore, a penalty for late filing can occur if the tax return is not submitted within its deadline. Tax collection and debt enforcement are provided by the Tax Collector’s Offices in each municipality.
The tax review for a particular income year starts after receipt of the tax return. If there is nothing particular, the assessment is issued in June for taxpayers with pre-completed tax returns and from August through to October for self-employed, corporations and other legal entities.
Tax returns are reviewed based on the information provided. If the Tax Administration office finds that the taxpayer’s tax return is incorrect or incomplete, the Tax Administration can change, omit or add items. The tax authorities have a right to require further information and clarification from the taxpayer and from third parties (see questions 7 and 17).
The Tax Administration and the local treasurer can demand field audits (see question 5 and 6).
It is common that a tax review will consist of several rounds of questions and answers, and it may take several years to complete. Starting out, the questions may be of an exploratory nature, intending to clarify whether there are grounds for reassessment. If the tax authorities intend to amend a tax assessment, a notice of reassessment must be issued to the taxpayer outlining the factual and legal arguments. The tax authorities will also issue a draft assessment for review and comment by the taxpayer before the final assessment is made.
There is no legal time limit for conducting the tax review, but the courts must take extreme undue delay on the part of the tax authorities into account. This doctrine of passivity is based either on case law or on the rules of the European Convention of Human Rights (ECHR). The latter applies only to penalty taxes.
Types of taxpayer
Are different types of taxpayers subjected to different reporting requirements? Can they be subjected to different types of review?
The official forms used for tax returns require different kinds of information from individuals, self-employed, corporations and other legal entities.
Everyone who conducts business is required to submit an income statement for the enterprise together with the tax return. The income statement is a slightly simplified statement of the main items in the enterprise’s profit and loss account and balance sheet. Those obliged to submit annual accounts complete Income Statement 2, while others in general are required to submit Income Statement 1.
There are different forms for different types of taxpayers.
Instead of the Income Statement, foreign companies and entities that are subject to tax review by COFTA can submit accounting excerpts (form RF 1045) in addition to the tax return.
The deadline for online submission of the tax return together with the required statement is 31 May in the year following the income year for both companies and self-employed persons. For companies that submit their tax return on paper, the deadline is 31 March. For self-employed persons who submit their tax return on paper, the deadline is 30 April.
For employees, pensioners and self-employed persons, suggested data and values are entered into the tax return in advance, based on information that the tax authorities have collected from third-party sources. The taxpayer is, however, still responsible for ensuring that the information in the pre-completed tax return is correct. If the information in the pre-completed tax return is incorrect and incomplete, the taxpayer must correct and submit the tax return to the Tax Administration. If the pre-completed tax return is complete and there is no need for any changes, the taxpayer is not obliged to submit the tax return.
The deadline for submission of the tax return for employees and pensioners is 30 April.
What types of information may the tax authority request from taxpayers? Can the tax authority interview the taxpayer or the taxpayer’s employees? If so, are there any restrictions?
The tax authorities can in practice demand that taxpayers provide any information that may affect the taxpayer’s taxes. This is the case regardless of where the information exists. The obligation only includes information that may be suitable as means of checking the taxpayer’s tax duties.
The obligation to provide information covers all forms of information. The tax authorities may require the taxpayer to provide access to accounting documentation, such as vouchers, contracts, correspondence and protocols of board meetings, electronic programmes and programme systems. The list is not exhaustive.
The obligation to provide information covers factual information. Legal assessments made by the taxpayer or his or her attorneys are not subject to the obligation.
It is the taxpayer, or whoever the taxpayer appoints, that is responsible for providing the information requested. Where the taxpayer or the appointed person is not present in a control situation, the tax authorities may not require employees to provide assistance.
Employers must deduct taxes for their employees. The local tax treasurer must supervise an employer’s tax deductions. As part of this oversight, the treasurer can demand a field audit at the workplace. In these checks, anyone performing or having performed work or assignments for the employer is required to provide information about their employment conditions or assignments related to the work.
Available agency action
What actions may the agencies take if the taxpayer does not provide the required information?
The Tax Administration can carry out a field audit at places where the business is conducted - at a third party’s premises, at a government agency or at a provider of access to electronic communication networks. The Tax Administration can choose whether it wants to request the information from the taxpayer in writing or immediately make a field audit.
The tax authorities may request the assistance of the police in field audits. This may typically take place where there is suspicion of serious tax fraud and risk of destruction of evidence. Such police assistance does not extend the rights of the tax authorities in obtaining information.
Furthermore, the tax authorities may request the taxpayer to present any kind of required documentation, such as accounting documents with annexes, contracts, correspondence and minutes of board meetings. Correspondence with lawyers is generally exempt from this obligation.
If no further information is either provided by the taxpayer or obtained from other sources, the Tax Administration can make its assessment based on the information available. Note that any rights to provide supplementary information are severely limited after the tax office has issued its assessment.
Protecting commercial information
How may taxpayers protect commercial information, including business secrets or professional advice, from disclosure? Is the tax authority subject to any restrictions concerning what it can do with the information disclosed?
The main rule is that the taxpayer is obliged to provide the requested information regardless of any duty of confidentiality. However, the taxpayer is only obliged to provide information that is relevant for the tax review. In this regard, it is important to be aware that the taxpayer only has to provide factual information, and not legal assessments made by the taxpayer or the taxpayer’s legal adviser. Advice from other (non-legal) professionals is not protected by such privilege. The lawyer-client privilege in tax cases is currently subject to some debate, especially regarding information relating to the use of a lawyer’s client account for transaction payments.
In accordance with the new Tax Administration Act, anyone who is or has been in a position within the tax administration is subject to a general and far-reaching obligation to maintain secrecy on information regarding companies’ and private individuals’ wealth, income, and economic, industrial or personal positions and so on. Furthermore, anybody who enters into a position within or with the Tax Administration is obliged to sign a form acknowledging both the existence of professional secrecy and that he or she will comply with it. However, the tax authority can hand over information to other public authorities, such as the police, the Norwegian national authority for investigation and prosecution of economic and environmental crime, the enforcement authorities, among others. If information subject to secrecy is delivered, for example, to another public authority that authority is subject to the same professional secrecy. Furthermore, the person or department within the tax authority that delivers the information is obliged to inform the recipient about the professional secrecy that applies.
The tax authorities are responsible for maintaining confidentiality and establishing safeguards to prevent unauthorised access to confidential information acquired in connection with the information and the check.
Limitation period for reviews
What limitation period applies to the review of tax returns?
The general time limitation under the new Tax Administration Act is five years, regardless of the documentation provided.
There is still a 10-year time limitation. This only applies in cases where the taxpayer is subject to an increased penalty tax of 20 or 40 per cent in addition to the normal penalty tax, or if the taxpayer is subject to a criminal charge of tax evasion.
Alternative dispute resolution
Describe any alternative dispute resolution (ADR) or settlement options available?
Norwegian law does not provide for an ADR procedure in tax matters.
A tax assessment may be contested by means of an administrative or judicial procedure. During such procedures, the tax authorities can sometimes reach a settlement with the taxpayer.
On choosing the administrative appeal route, the taxpayer must lodge a complaint in writing. The complaint must contain specific arguments and explanations of the grounds upon which such arguments are based. The complaint must be filed with the tax office within six weeks from the date the tax assessment was sent to the taxpayer. If the complaint regards a reassessment decision made by the tax office, a board of tax appeals will deal with the complaint. The tax boards are organs independent of the tax office, but the tax office prepares the cases. There is a new independent tax board system on the verge of being implemented.
If the tax board upholds the reassessment decision, the taxpayer has no right of further administrative appeal. If the taxpayer wishes to contest the case further, it must be brought before the courts.
The Directorate of Taxes may demand that a decision by a tax board is brought before the national tax board.
Collecting overdue payments
How may the tax authority collect overdue tax payments following a tax review?
Overdue tax payments must be paid even if the assessment is subject to appeal. Delay interest will accrue from the due date until the payment is made. If the claim is not paid voluntarily, the treasurer may enforce the payment, and charges may apply according to court fees.
If the overdue tax needs to be collected by enforcement, the treasurer may take liens over property, force sales of assets, file a petition of bankruptcy and such like.
As a general rule, the limitation period for overdue tax payments is three years after the end of the calendar year when the tax was due.
If a taxpayer is in no position to pay overdue tax, the taxpayer may apply to the local treasurer or the Tax Administration offices for a deferral or reduction in the overdue tax.
In what circumstances may the tax authority impose penalties?
If the taxpayer submits the tax returns, income statements or partnership statements after the deadline, a penalty for late filing is applicable.
If the taxpayer fails to submit the tax returns, or provides incorrect or incomplete information, this may result in penalty tax.
Taxpayers who wilfully or through gross negligence have given the tax authorities incorrect or incomplete information, or who have failed to submit tax returns, income statements or partnership statements, and who understood or should have understood that this could have led to a reduced tax burden, risk a higher rate of penalty tax.
Failure to submit tax returns, income statements or partnership statements can affect the right of the taxpayer to appeal.
How are penalties calculated?
The penalty for late filing varies somewhat depending on the situation. If the taxpayer has failed to comply with the deadline to submit the tax form, the penalty is half of the court fee for every day. The penalty is one court fee per day if the taxpayer does not fulfil its record-keeping requirement. Finally, the penalty is two court fees per day if a third party - employer, financial institution, companyand so on - fails to fulfil its reporting duties under the Norwegian Tax Act and the Norwegian Tax Administration Act. At June 2018, a court fee is 1,130 kroner (approximately €118). The maximum penalty is 50 court fees. However, the maximum penalty for not fulfilling its record-keeping requirements is 1.13 million kroner (approximately €118,400).
The normal rate of penalty tax is 20 per cent of the tax reduction. Additional penalty tax, at a rate of 20 or 40 per cent of the tax deduction, is reserved for more serious cases and requires that the taxpayer intentionally or through gross negligence provides the tax authorities with incorrect or incomplete information, or neglects to provide mandatory information when he or she understands or should understand that it would lead to a tax benefit. More serious cases could involve criminal prosecution (see question 15).
What defences are available if penalties are imposed?
Legal grounds for exemption from penalty tax are illness, age, inexperience and other causes. These exemptions are meant to be limited, but are nonetheless important. Further, in the normal course of a complaint, the taxpayer would contest that the information submitted was indeed faulty or incomplete.
The penalty for late filing can be avoided after an overall evaluation based on the cause for late filing, the extent to which the taxpayer can be blamed for the late filing, if the late filing has caused any (tax) benefits and if the person obliged to report has been seriously ill.
It is the taxpayer’s responsibility to ensure that the submission of tax returns is correct and within the deadline. The use of an accountant or auditor for the tax return generally does not relieve the taxpayer of the responsibility for the information being correct or of timely submission.
In what circumstances may the tax authority collect interest and how is it calculated?
The tax authorities may add delay interest to outstanding tax amounts. However, according to Norwegian law, interest upon penalty tax is illegal.
A delay interest will accrue from the due date until the payment is made. The Ministry of Finance shall determine the interest every six months, with effect from 1 January and 1 July.
Are there criminal consequences that can arise as a result of a tax review? Are these different for different types of taxpayers?
Taxpayers who wilfully or through gross negligence give the tax authorities incorrect or incomplete information may be prosecuted for tax evasion if the taxpayer understood or should have understood that this may lead to reduced tax or tax-related benefit. Tax evasion cases under criminal law must observe the same rules regarding burden of proof as other criminal cases.
The same actions cannot result in both penalty tax and criminal prosecution. This would be a violation of the ECHR. The tax authorities must therefore choose between imposing the additional or increased penalty tax or criminal prosecution of the taxpayer. The choice will largely depend on the seriousness of the violation.
The general rule is that the taxpayer - whether the taxpayer is a company or a person - has the penalty tax or the criminal prosecution imposed. However, in some cases, the chairman of the board, the board members or the manager can be fined or even imprisoned; for example, if the company does not pay the withholding tax on salaries for its employees.
What is the recent enforcement record of the authorities?
The most recent enforcement record of the authorities is from 2014. Regarding the most serious tax crimes in 2014, the Tax Administration completed 316 inspections and recalculated nearly 728 million kroner in the income data. Regular controls or different levels are in the tens of thousands. The Tax Administration had a particular focus on stopping or limiting tax crime through pursuit of principals and backers in workforce tax violations.
In 2014, the tax crime departments reported 102 cases of organised ‘underground’ work and fictitious invoicing networks. The Tax Administration reported a total of 741 cases based upon tax reviews or field audits and 457 reports based upon failed tax returns, income statements or partnership statements.
Twenty-one arrests were made.
In 2015, from a total of 110 court cases becoming final, 62 per cent were held in favour of the tax authorities for material tax issues and 74 per cent were held in favour of the tax authorities on indirect tax. The statistics suggest outcomes are not in favour of the taxpayer. The higher courts do, however, tend to favour the taxpayer more in their rulings than the municipal/city court level.
Third parties and other authorities
Cooperation with other authorities
Can a tax authority involve or investigate third parties as part of the authority’s review of a taxpayer’s returns?
At the request of the tax authorities, any third party is obliged to provide information that may affect the taxpayer’s assessment. No requirements exist relating to the relationship between the person who is obliged to provide the information and the taxpayer. The information must contribute to the clarification of someone’s tax assessment.
The tax authorities can conduct a field audit at the third-party premises.
Third parties that are subject to legal confidentiality and requested to provide information only have to provide information on money transfers, deposits and liabilities including the parties and regarding the third-party accounts belonging to the taxpayer.
Does the tax authority cooperate with other authorities within the country? Does the tax authority cooperate with the tax authorities in other countries?
In tax matters, the tax authorities cooperate with relevant national governmental agencies, especially the National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim), the Labour Inspection Authority, the Labour and Welfare Organization, the police and Toll Customs.
Norway has signed a number of international treaties with other states to avoid double taxation, prevent tax evasion and exchange information. Norway has particularly close cooperation with the other Nordic countries.
Voluntary disclosure and amnesties
Do any special procedures apply in cases of financial or other hardship, for example when a taxpayer is bankrupt?
The tax collector will act more or less as a normal creditor with regard to enforcement. There are, however, certain exceptions.
Deferred payment or reduction of tax due to the taxpayer’s condition may be applied in instances of death, serious disease or a permanent reduction in the ability to service debts.
Deferred payment or reduction of tax due to the position of the tax collector as creditor may apply where the taxpayer is unable to service his or her debts in an ordinary manner. The conditions of the payment offer must provide a better return than continued enforcement of the tax claim.
In the case of bankruptcy, the bankruptcy estate is a separate tax entity from the debtor in bankruptcy. Tax debts rank below certain prioritised claims, but above normal creditors.
The estate has a duty to submit a tax return for any taxable activities under the regular rules and deadlines.
Are there any voluntary disclosure or amnesty programmes?
The Tax Assessment Act contains a voluntary disclosure or tax amnesty provision.
Taxpayers who want to come clean under the Norwegian tax amnesty provision are free from penalty tax and criminal prosecution if they do not come forward under threat of investigation. However, they are obliged to pay income and wealth tax, plus interest on the previously unpaid tax amounts.
Rights of taxpayers
Rules protecting taxpayers
What rules are in place to protect taxpayers?
The Norwegian Constitution requires that all taxes must be imposed based on legislation (rule of law). New tax laws cannot be applied retroactively. An example is that the High Court declared the new tonnage tax regime implemented in 2007 unlawful with regard to its retroactive effects of taxation.
How can taxpayers obtain information from the tax authority? What information can taxpayers request?
The Tax Administration has a legal obligation to provide guidance to taxpayers. Taxpayers can call the Tax Administration offices for guidance, or find information on the Tax Administration’s websites.
This right extends to guidance on filling in forms relating to the tax return, income statements, partnerships statements and tax reviews. When the work situation permits, the Tax Administration also provides guidance on laws, regulations and common practices that are relevant for the taxpayer’s rights and obligations and, if possible, pointing out issues that could especially have an impact.
In addition to the general guidance, the taxpayer may apply to the Tax Administration for an advanced binding statement or ruling.
Tax authority governance
Is the tax authority subject to non-judicial oversight?
The tax authority is subject, as are other government and public agencies, to review by the Office of the Auditor General (OAG).
The OAG will ensure that the community’s resources and assets are used and governed according to the Norwegian parliament’s decisions. This is carried out through auditing, monitoring and guidance of the agencies.
The OAG is an independent entity in relation to government. It reports the results of its auditing and monitoring activities to the Norwegian parliament.
Taxpayers also have the opportunity to lodge a complaint with the parliamentary ombudsman. The ombudsman carries out supervision based on complaints from citizens concerning any maladministration or injustice on the part of a public agency.
Court actions (describe trial court actions in this section)
Which courts have jurisdiction to hear tax disputes?
There are no specialist courts for tax matters in Norway. Tax matters are dealt with in the ordinary courts, and there are no specific court structures for tax disputes.
A tax case must be lodged against the state of Norway, normally represented by one of the five regional tax bodies, or by the Petroleum Tax Office. Legal venues may be the ordinary courts where the taxpayer resides or has his or her principal place of business.
Lodging a claim
How can tax disputes be brought before the courts?
In general, the taxpayer has a right to appeal any tax assessment decisions issued by the Tax Administration. However, the taxpayer cannot appeal the advanced binding rulings from the Tax Administration.
There is no minimum threshold to be met before a claim can be brought to the district courts (courts of first instance).
Before lodging a claim before the courts, the taxpayer must provide the counterparty, in most cases the state, with a written notice of the appeal. The notification should state the appeal and the grounds for it. The notice should also invite the counterparty to respond to the claim. The counterparty shouldm have reasonable time to respond before the taxpayer can bring the claim before the courts.
The taxpayer can bring a tax dispute before the courts regardless of whether an administrative appeal procedure has been undertaken or been completed.
An appeal regarding a tax assessment must be brought before the courts within six months after a tax settlement or tax amendment resolution was sent to the taxpayer.
The tax authorities’ decisions on tax matters and tax assessments are administrative decisions. It is fundamental that the courts do not act as a tax administration. The courts therefore have somewhat limited competence in hearing decisions on tax matters. The courts will test the assessment of the facts of the case, of procedural matters and of the legal basis. At the outset, the discretionary assessment of the tax authorities cannot be tested as long as it is within the law.
On this basis, the courts must generally disallow new facts when hearing the Tax Administration decision.
Combination of claims
Can tax claims affecting multiple tax returns or taxpayers be brought together?
Reassessment cases from the tax authorities will often include several income years, depending on the type of transaction(s) involved in a tax dispute. In principle, decisions regarding changes in the tax assessment can include several taxpayers. Common practice is, however, that the tax office prepares one decision for each taxpayer. This is the general rule, even if the changes involve both a company and its shareholders.
If a decision from the tax office is brought before the court, the Norwegian Civil Procedure Act applies. This means that both the taxpayer and the authorities can involve multiple parties on certain conditions.
Must the taxpayer pay the amounts in dispute into court before bringing a claim?
The taxpayer must pay the tax and the amounts in dispute, even when the case dispute is brought before the courts.
To what extent can the costs of a dispute be recovered?
In accordance with the new Norwegian Tax Administration Act, the taxpayer can recover costs concerning necessary assistance regarding a matter within the Tax Administration if it changes the tax assessment in favour of the taxpayer. The taxpayer can recover costs from a lawyer, an accountant, an appraiser, and so on, if the costs have been necessary to change the decision from the Tax Administration in the taxpayer’s favour.
If a decision from the tax office is brought before the court, the Norwegian Civil Procedure Act applies. This means that if the taxpayer has sustained his or her claim, he or she can get his or her costs completely or partly recovered.
Are there any restrictions on or rules relating to third-party funding or insurance for the costs of a tax dispute, including bringing a tax claim to court?
As a starting point, it is important to be aware that private parties have contractual freedom. There is no rule against third-party funding or insurance as such. We sometimes see that third parties formally intervene in a case, but this cannot be done without such party having a direct legal interest in the case.
If a third party suffers a loss, regardless of whether the loss is a consequence of a tax dispute, it is possible that insurance can cover the loss. This depends on the terms and conditions in the insurance. From a legal perspective, it is important to bear in mind that a third party can be obliged to give the tax authorities information, or to give his or her testimony in court. As a general rule, expenses and losses to fulfil these obligations are not refundable by the state.
Court decision maker
Who is the decision maker in the court? Is a jury trial available to hear tax disputes?
The decision maker in the court depends on whether there is a criminal or a civil case, and which court instance. In Norway, there are three court instances: the District Court (first instance), the Court of Appeal (second instance) and the Supreme Court (third instance).
It is a fundamental principle in the criminal courts that ordinary citizens shall participate in the decisions. Along with professional judges, lay judges therefore operate in criminal cases in the District Court (first instance) and the Court of Appeal (second instance). The mix between professional judges and lay judges is called a meddomsrett. Lay judges are ordinary citizens without any judicial background who operate as a judge in single cases along with the professional judge. The number of professional and lay judges varies with the complexity and size of the case and the court instance. In the most serious criminal cases in the Court of Appeal, a jury determines the question of guilt, but this is not relevant for tax cases. In the Supreme Court, the decision makers are a panel of professional judges.
The decision makers are mainly professional judges. In some cases, a party can demand that a lay judge who is a specialist in the field of the case matter will operate along with the professional judge (meddomsrett). The number of judges and lay judges will depend on the complexity of the case and which instance the case is brought before.
What are the usual time frames for tax trials?
The time frame for tax trials varies from case to case depending on various factors. The time frame will also depend on which regional court or court instance the case is brought before. There are no specific numbers available for tax cases as such, but statistics from the Court Administration from 2014 show that, in general, the time frame for civil cases in the district courts was just over five months, in the appeal courts six months, and in the Supreme Court also six months.
What are the requirements concerning disclosure or a duty to present information for trial?
The main rule under the Norwegian Civil Procedure Act is that both the parties and third parties are obliged to present any information and documentation that can be of relevance within a trial. However, within a tax trial, the taxpayer can only produce evidence and documentation that has been put forward during the administrative proceedings, when the tax administration considered the matter. This rule on exclusion of evidence does not apply to questions regarding additional (penalty) tax.
The general rules of pre-trial discovery in civil cases are applicable also to tax cases, but will not commonly be in use due to the above limitation on new evidence.
What evidence is permitted in a tax trial?
The main rule under the Norwegian Civil Procedure Act is that all kinds of evidence - both oral and documentary - that can be of relevance in a tax trial are permitted (see question 32 for exceptions from the main rule). In accordance with the main rule, anyone who has knowledge of something that is relevant for the case and is legally summoned can testify in a trial. In general, testimony must be presented in person before the court.
Unless the taxpayer has a legally valid reason for absence, there is a requirement to attend and testify at the trial. If the party is present at the hearing, evidence will be given directly to the court. The taxpayer has a right of protection against self-incrimination. In criminal cases, there is therefore no corresponding duty to testify.
The parties are permitted to hire experts who can testify if it has relevance to the case.
As a general rule, evidence should not be translated because translation can affect the content and value of the evidence in question. Should it be necessary, both the Norwegian Civil Procedure Act, the Norwegian Criminal Code and the Norwegian Courts Act have provisions regarding translation of evidence and appointing interpreters.
Who can represent taxpayers in a tax trial? Who represents the tax authority?
Taxpayers may represent themselves, except before the Supreme Court. A lawyer may represent taxpayers. If the taxpayer cannot afford legal representation or otherwise raise support for the legal costs, he or she must resort to self-representation. In criminal cases, the state will in general appoint a free attorney for the trial.
The state of Norway is the defendant or plaintiff in matters regarding tax assessment and other decisions made by the tax authorities. Claims regarding the collection of taxes shall also be directed to the state. The Tax Administration region where the administrative decisions are taken represents the state position. In claims regarding the collection of taxes, the local treasurer or tax collector represents the state position. The Directorate of Taxes has issued a mandate concerning legal representation in various tax matters. According to these instructions, the tax authorities should refrain from self-representation.
Regarding tax assessments and other decisions, the lawyers at the office of the Attorney General and the Tax Directorate’s special investigators may represent the state.
In lawsuits against the Ministry of Finance and the Petroleum Tax Office, the Attorney General will be engaged.
The state or tax regions and tax collectors may also choose to be represented before the courts by lawyers and law firms with a framework agreement with the state for such work.
Publicity of proceedings
Are tax trial proceedings public?
Trial proceedings and verdicts are generally public. There is no mandatory publication. Most tax cases are published in a journal collecting relevant tax material together with extracts of certain decisions and statements by different levels of the tax authorities. Cases with precedents, such as cases from the Supreme Court, are published in full.
Burden of proof
Who has the burden of proof in a tax trial?
In criminal tax cases, the public prosecutor has the burden of proof. To fulfil this burden, the taxpayer must be proven guilty beyond reasonable doubt.
In civil tax cases, the taxpayer generally has the burden of proof that the tax authorities have made an incorrect or unlawful decision.
In some cases, the court will be able to make exceptions to this principle and place the burden of proof on the defendant.
Case management process
Describe the case management process for a tax trial.
Before a trial, the parties shall consider the possibility of a settlement negotiation. At the trial, the judge starts by presenting the case. Thereafter the plaintiff, through his or her attorney, briefly presents the facts of the case and all the evidence. All evidence is presented orally. The defendant’s attorney may thereafter make remarks to the defendant’s presentation.
Furthermore, the parties and witnesses provide their testimonies. The plaintiff starts first with questions from the plaintiff’s attorney, and thereafter the defendant’s attorney. The judge or judges can ask each party and witnesses further questions.
Subsequently, the plaintiff’s attorney provides the plaintiff’s closing speech. After that, the defendant’s attorney provides the defendant’s closing speech. In the closing speeches, the attorneys explain their perception of the existing law, why their client’s explanation of the facts has to be accepted, and which legal consequences this will have. At the end of the procedure, the lawyers state the plaintiff’s or defendant’s claims.
If the plaintiff has remarks on the defendant’s legal procedure, the plaintiff is allowed to comment thereon, and vice versa.
The process in a criminal case is different from a civil case. Briefly, the prosecutor drives the criminal case and has an obligation to present it from all sides. The taxpayer does not have to testify (although in tax cases they normally do) and the taxpayer’s attorney must make sure that any reasonable doubt regarding guilt is taken into account by the court. At the end of the trial, the prosecutor and the taxpayer’s attorney hold their own legal procedures and present their claims and assertions regarding the case.
Can a court decision be appealed? If so, on what basis?
For information about court instances, see question 30.
A court decision from the District Courts can be appealed to the Appeal Court, and a court decision from the Appeal Court can be appealed to the Supreme Court.
The deadline for an appeal to the Appeal Court in civil cases is usually a month after the judgment of the District Court is made known to the parties, and 14 days in criminal cases after the judgment is formally notified to the taxpayer.
The disputed amount is relevant to whether the case can be appealed. If the appealed object’s value is more than 125,000 kroner, an appeal will normally be granted. If the value is less than 125,000 kroner, permission from the Court of Appeal is required. The Appeal Court also has a limited right to refuse to hear an appeal if the Appeal Committee in the Appeal Court finds it obvious that the appeal will not succeed. The Supreme Court accepts only appeals that are approved by the Supreme Court’s Appeal Committee. The main conditions for acceptance are that a decision from the Supreme Court will have fundamental importance or that there is a need to provide essential legal guidance for other cases.