NORWAY ONLINE. The Tax Administration s vision: A society in which everyone is willing to pay their dues

Transcription

1 ANNUAL REPORT 2012

2 INDEX The Tax Administration A positive trend 4 Service 5 The new website 6 More tax returns filed online 6 Earlier tax settlement notice 7 Pilot scheme for electronic tax deduction cards 7 New reserach alliance 7 New presence on social networks 8 Europe to Oslo 9 Enchanced dialouge with large enterprises 10 Service centres for foreign workers 10 Rise in indenity fraud 10 Partnership to combat the black market 11 Tax havens and tax amnesty 12 Tax office closures 12 Tax determination and equal treatment 13 Cooperative crime and fictional invoicing 13 Financial highlights from The Norwegian Tax Administration Yield from tax and contributions 14 Tax returns 14 Tax deduction card 15 National Registry 16 Third party information 16 Value-added tax 16 Complaints 17 Inheritance and gifts 18 Audit results 18 Reports to the Norwegian Prosecuting Authority 18 About the staff of the Norwegian Tax Administration 19 The Norwegian Tax Administration`s budget 19 The Tax Administration s main goals: Taxes must be stipulated correctly and on time Taxes must be paid on time The Population Register must be of high quality To provide good service to our users The Tax Administration s vision: A society in which everyone is willing to pay their dues The Tax Administration s values: Professional Accommodating Innovative Strategies Transparency One step ahead User-friendly public sector Quality culture Expertise NORWAY ONLINE The Norwegian Tax Administration s new website, skattetaten.no, was launched in It signalled the start of our efforts to simplify and improve all our information to provide you with the information you need to get things right. The Norwegian Tax Administration is committed to providing a reliable service for all our users. Our users have different needs: Some require straightforward information online, others need active assistance. Our work in this area produces results in many different ways: examples include our dedicated service centres for foreign workers that had nearly 120,000 visitors in 2012 and through our tax assistance service that helped 1,234 people clear up tax issues they were not able to sort out on their own. Many taxpayers contact us by telephone, others visit their local tax offices, some ask questions on Facebook, others follow us on Twitter. The vast majority of our users sort out their tax returns, tax settlements and tax deduction cards without needing any direct help from us. They find what they need on the web and use our electronic services. Seen from the outside, tax is becoming easier and easier for the majority of people. However seen from the inside, things are rather different. Developing systems and services to make things simpler for taxpayers, individuals and businesses requires considerable resources. The Norwegian Tax Administration is being tasked with an ever-increasing workload and cases are becoming more and more complex. We face challenges related to digitisation, electronic commerce, increased complexity in corporate structures, and globalisation, with the flow of persons, capital, goods and services across national borders. The Norwegian Tax Administration s work has Director General of the Norwegian Tax Administration Svein Kristensen changed dramatically over time and we have worked conscientiously with organisation, technology and expertise in order to become more efficient, achieve better results and adapt to future needs. 2 3

3 THE TAX ADMINISTRATION IN 2012 A positive trend The Norwegian Tax Administration performs crucial tasks which serve to further develop Norwegian society. In 2012, the public purse received NOK billion as a result of the work performed by the Administration. This is an increase of 9.9 per cent on the previous year. In addition, as a public body, we are leaders in digital communication with users, which is in line with the Norwegian Government s digitisation programme. For example, an increasing number of people now prefer to use the Administration s electronic services. Our new skatteetaten.no website is one element in our efforts to encourage taxpayers to be more self-reliant, and to develop our future services. Feedback on our website has been positive, and we are working to make it even more user-friendly. Experiences drawn from our own efforts and those in other countries to increase tax compliance tell us that preventive efforts are crucial. The vast majority of taxpayers are keen to pay their dues. Good information and guidelines, in addition to cooperation with the entities who file third-party information, are crucial in achieving accurate and timely tax returns. In 2012, the Norwegian Tax Administration received 58 million data items. In 2006, the corresponding figure was 49 million. Thanks to the long-term efforts to obtain this data, the majority of employees and pensioners were now able to check that the information on their tax return was accurate and complete, and confirm the proposed tax calculation the Administration sent to them. It is important to know and understand the surroundings in order to stay ahead. In the past, tax research tended to address the economic impacts of taxation. However, in order to achieve greater compliance, it is crucial to establish why some people choose to evade paying tax, while others refrain from doing so. Such knowledge makes it possible to adapt and work proactively. To that end, in 2012, the Administration formed a research alliance with NHH, Norway s leading business school. In addition, we have boosted our in-house research and analysis environment. Service Legal rights, quality and equal treatment are prominent policy items on the Administration s agenda, and a number of initiatives have been implemented to ensure that we maintain these. Equal cases shall receive the same treatment and taxpayers shall receive a high level of service. A survey of employees and pensioners conducted in 2012 indicates that users are satisfied with the service provided by the Norwegian Tax Administration. At the same time, the Administration has started to measure whether it reaches the taxpayers in an optimal way. A new logging system allows us to assess the Administration s channels in context, and measure whether the guidance produce the intended effect. The Administration s helpline took fewer calls in 2012 than in This might be because more people are able to find answers to their questions on our website. The helpline response time went up slightly, but callers have the option of having the Administration call them back. 4 5

4 The new website find, understand and get it done The Norwegian Tax Administration received feedback from users that they had trouble finding the information they needed on our website. In response to this problem, skatteetaten.no has now been given a makeover with new navigation and reworked design. Several of the guidance texts were constructed as a trail where you are guided step by step through the process. One example is the new guide for people planning to marry, where the users are led through the forms they need to complete. In addition, improvements have been made to the language to make it plainer and easier to understand. The relevant pages have been laid out so they display properly on all platforms, including small screens. More tax returns filed online A total of 790,000 employees and pensioners had filed their tax return over the internet by the deadline at midnight on 30 April Around 300,000 of them filed without changes. Around 250,000 had filed their return on paper by the same deadline. In the case of businesses, 236,000 returns were filed electronically by the 31 May deadline. 2,750,000 taxpayers opted for submission exemption. This corresponds to 67.1 per cent of all employees and pensioners. Earlier tax settlement notice In 2012, more than 2.9 million employees and pensioners received their tax settlement notice in June. This was 140,000 more than in In addition, the scheme for continuous tax settlement was extended. As of the last week of July, settlement notices were released in weekly batches up to the last settlements in October. This means that taxpayers received their tax settlement notice as soon as their tax return had been processed in the period between July and October. This year, self-employed persons were also brought under the continuous settlements scheme. In the past, they had to wait until October. In 2012, almost 192,000, that is half of all self-employed persons, received their tax settlement notice in July. New research alliance In 2012, two new tax research centres opened at the University of Oslo (UIO) and the Norwegian School of Economics (NHH). The new centres will be researching issues such as tax evasion and factors influencing taxpayer compliance with laws and regulations. In addition to providing tax-related assistance, the Norwegian Tax Administration donated NOK 15 million to the centre at NHH. The research centres are part of a new, long-term drive to establish strong academic environments devoted to Norwegian and international tax research, and setting up multidisciplinary research centres focusing on taxation and compliance. Pilot scheme for electronic tax deduction cards In December 2012, a select number of employers with payroll systems were invited to obtain tax deduction cards for their employees electronically. With this new electronic scheme, employers avoid manual processing of physical cards, while taxpayers avoid having to hand in their card to their employer is a voluntary transition year, but in 2014 everyone will use the new scheme. 6 7

5 New presence on social networks The Norwegian Tax Administration shall meet people where they are not least when it comes to recruitment. In June 2012, we launched our own presence on the careers-oriented social network LinkedIn, which currently has some 700,000 members from Norway. Each LinkedIn profile is a CV, so LinkedIn holds a lot of information on its members professional background, qualifications and work experience. The Norwegian Tax Administration benefits from this since it increases our chances of attracting the attention of the right candidates with the right job advertisements and positions. In addition to recruitment, image and reputation building are important aims for our LinkedIn presence. This channel serves to raise the profile of the Norwegian Tax Administration as an attractive employer and a modern, visionary public body, in line with the Administration s values and strategies. The Norwegian Tax Administration is also active in other social media such as Twitter and Facebook. Since it started in December 2011 and until December 2012, the Skatten min ( My Tax ) Facebook presence gained 5,500 followers, and during 2012 more than 3,000 questions were answered through this channel. During the tax return period, more than 400 questions were received daily. Europe to Oslo In July, 46 representatives of the European tax administrations convened for the IOTA General Assembly in Oslo. The Norwegian tax director served as president in the year 2011/2012, and true to tradition, the annual General Assembly was held in the president s home country. The main theme for the 2012 Assembly was how the Tax Administrations can stay ahead and work proactively. About IOTA: The Intra European Organisation of Tax Administrations (IOTA) is an organisation for European tax administrations, which provides a forum to assist member states in discussing practical issues and how best to perform tax administration. INTERNATIONAL COOPERATION: IOTAs general meeting was held in Oslo. 8 9

6 Enhanced dialogue with large enterprises The Norwegian Tax Administration has had success with binding cooperation, and is now trialling a new method so called enhanced dialogue with large business enterprises to increase compliance with tax and duties regulations. This method reassigns resources from post hoc ledger audits to guidance and prevention through dialogue with enterprises ahead of statutory submissions to the Administration. Dialogue with the enterprises deals particularly with clarification of rules and internal audit. OECD recommends member states to consider adopting enhanced dialogue in their efforts to increase compliance with the tax and duties regulations. The OECD rationale is that traditional audit and control mechanisms alone fail to achieve satisfactory compliance. Six large enterprises from different sectors are part of the voluntary enhanced dialogue with the Norwegian Tax Administration. Service centres for foreign workers In 2012, 119,343 foreign workers were assisted by the service centres for foreign workers in Oslo, Stavanger and Kirkenes. This was 965 more than in The service centres are run in association with the immigration authorities, the police and the Norwegian Labour Inspection Authority. The centres provide swift and coordinated tax services to foreign workers. In 2012, the centres detected a number of attempts to obtain a D-number (exemption from Norwegian tax and national insurance liability) by means of fake identity papers. Rise in identity fraud Foreign workers are required to obtain a D-number in order to gain a tax deduction card. All persons requiring a D-number must attend a tax office in person and present valid proof of identity. As of 1 February 2012, identity checks can be performed only at 41 designated tax offices. These offices have special expertise and the requisite specialist equipment for performing the checks. Checks of more than 130,000 identity documents in 2012 detected several false identities. Partnership to combat the black market SMSØ, the partnership to combat the black market, is made up of Norwegian Association of Local and Regional Authorities (KS), Norwegian Confederation of Trade Unions (LO), Confederation of Norwegian Enterprise (NHO), Unio the confederation of professional unions for employees with university education, Confederation of Vocational Unions (YS) and the Norwegian Tax Administration. The level of activity is high, and in 2012, the alliance devoted special focus to consumers and youth. The Handle hvitt ( Dealing above board ) campaign, which started in November 2011, continued throughout Surveys indicate that it was seen by at least 21 per cent of the population. The main focus has been on communicating with consumers about to purchase services. Submissions of the settlement form for private employers increased by 35 per cent in the period 1 November 2011 to 1 October 2012, relative to the same period in the previous year

7 Tax havens and tax amnesty During 2012, 115 new individuals contacted the Norwegian Tax Administration to report that they had assets and income abroad which they had not declared for tax purposes. Under the scheme for voluntary rectification, the so-called tax amnesty, people with money abroad on which they have not previously paid tax, avoid liability for supplementary tax of up to 60 per cent if they voluntarily, and on their own initiative, contact the Administration. Although the scheme grants people a tax amnesty, they still have to pay income tax and wealth tax on the evaded amounts, plus interest. In 2012, tax amnesties were granted to 124 persons. As part of the efforts to prevent assets of this kind from being hidden in tax havens, the Administration has a nationwide network of experts who are responsible for intelligence gathering, intelligence sharing and experience exchange. Norway has signed agreements on information exchange with 35 countries. These agreements allow the Administration to obtain information from foreign authorities. Tax office closures There is now less need to visit a tax office in person than in the past. The internet and phone have replaced the need for physical attendance. The Norwegian Tax Administration has effective electronic services, and if anyone has questions, the answers are available at the Administration s website, by phone or on Facebook. As a result, in 2012, 55 tax offices with one to four employees were closed down. No employees were made redundant. All of them were offered positions at a other tax offices. Tax determination and equal treatment The results of the tax determination efforts indicate that the Norwegian Tax Administration largely achieved its targets for 2012, with a yield totalling NOK billion. Increasing numbers of citizens are taking up options such as submission exemption and file their tax return online. This allows resources within the Administration to be reassigned more towards checks of self-employed persons and companies, Cooperative crime and fictional invoicing Combating tax crime is a prioritised area, and serious attempts to undermine the Norwegian tax and duties system have been detected. Examples include suppliers who organise undeclared labour and issue falsified invoices to camouflage underthe-counter wages and evade tax and VAT. Over the last three years, the Norwegian Tax Administration has carried out a project to detect this type of tax crime. In 2012, more than 150 checks were made, which revealed black market labour of NOK 179 million. In addition, business audits revealed undeclared revenue worth NOK 184 million, evasion of employer contributions worth NOK 343 million and VAT of NOK 129 million. Police investigations have been initiated of 76 people while also directing it at specifics themes. The Norwegian Tax Administration is committed to a policy of equal treatment and has implemented several measures to that end. One example would be the continual improvement approach. This results in more consistent routines, procedures and quality across the Norwegian tax regions saw the first-ever publication of a quality report devoted to value-added tax, which also serves to promote equal treatment. and 37 people have been sentenced. Evasion of taxes and other statutory charges was perpetrated by issuing fictional invoices as a means of legitimising a transaction that was never made, or which was made but not in the form described by the invoice, and not between the entities stated on the invoice. The Administration registered 321 cases of gross tax evasion in 2012, that is, cases of evasion worth in excess of NOK 1 million. Organised crime involving multiple offenders was detected in 57 cases, and in seven cases, professional operators were involved. The tax crime divisions are focused on stopping and curbing this form of crime by targeting the organisers, protecting assets and cooperating with the police

8 FINANCIAL HIGHLIGHTS FROM THE NORWEGIAN TAX ADMINISTRATION IN 2012 Yield from tax and contributions (determined by the Tax Administration) The total yield for 2012 came to just over NOK billion. Variations in this total occur from one year to the next and are due mainly to changes beyond the Administration s control. Examples of such changes include economic trends, major changes in the tax and contributions rate or changes in oil production. The positive results are also due to the Administration s efforts and the effect of investments in new IT solutions. Total calculated tax and duties NOK billion Tax on income/wealth NOK billion Petroleum tax NOK billion National insurance contributions NOK billion Employer s contributions NOK billion Value-added tax NOK billion Value-added tax on imports (levied by Norwegian Customs and Excise) NOK billion Inheritance tax NOK 1.7 billion Tax returns Total number of processed tax returns 4,720,000 Proportion of taxpayers opting for submission exemption 67.1 per cent Employees and pensioners 4,106,000 Self-employed persons 373,000 Companies 241,000 Number of tax settlement notices with calculated taxt Employees and pensioners 3,556,000 Self-employed persons 373,000 Companies 241,000 Online filing of tax returns These did not make use of delivery exemption. Proportion of businesses filing tax returns online 83.1 per cent Proportion of employees and pensioners filing tax returns online 63.5 per cent Number of tax payers with refunds and tax arrears/underpaid tax Tax payers with refunds Tax payers with tax arrears/ underpaid tax Calculated tax and national insurance contributions Private taxpayers NOK billion Companies NOK 73.8 billion Oil companies NOK billion Tax refunds and back taxes for employees, pensioners and self-employed persons Number qualifying for refund 2,890,870 Refunds including interest NOK 35.9 billion Number liable for back taxes 769,473 Back taxes including interest NOK 16.3 billion Late payment penalty charges Number of self-employed persons 25,073 Late payment penalty charges NOK 63.8 million Number of companies 29,672 Late payment penalty charges NOK 21.8 million Non-submission/misinformation Number of self-employed persons 6,162 Supplementary tax NOK 110 million Number of companies 1,373 Supplementary tax NOK 89.9 million Tax deduction card Over the year, many people needed to have their tax deduction card amended due to changes in their financial circumstances. Almost 30 per cent made amendments during Number of tax deduction cards issued in December million 14 15

9 National Registry At the turn of the year 2012/2013, 5,051,300 persons were registered as residents of Norway; an increase in the population of 65,405 persons, or 1.3 per cent. The immigration surplus accounted for 72 per cent, and the birth surplus for 28 per cent of the increase. Number of processed changes of address notices 780,466 Number of processed name changes 61,090 Dwelling number 95.4 per cent of all dwellings are registered under a dwelling number Detected falsified, fictional and non-disclosed changes of address notices 29,734 Number of electronic change of address notices 57.8 per cent Third party information Information submitted by employers, banks, public bodies and kindergartens to the Norwegian Tax Administration form the basis for documents such as the tax return and for the Administration s audit procedures. Number of processed data items 58 million Value-added tax Value-added tax is payable on the sale of the majority of goods and services. The rate is generally 25 per cent. For foodstuffs: 14 per cent. For cinema tickets and personal transport: 8 per cent. Online application to change tax deduction card 57,2 % Number of changes made online of tax deduction cards ,6 % Number of changes made online of tax deduction cards For the second year in a row, the Norwegian Tax Administration has detected record-high undeclared amounts. Number liable for VAT 344,440 VAT payable NOK billion Total number of VAT submissions 1,608,038 Of which VAT refunds 401,841 Number of complaints to appeals board 281 Online submissions Proportion of submissions made online 98.4 per cent Complaints A total of 88,000 complaints were processed in the areas of tax, VAT, inheritance tax and the National Registry in In addition, the tax offices rectified errors in tax returns without having received a taxpayer complaint in almost 28,000 instances. Proportion of tax-calculation complaints processed within three months of receipt: 86.9 per cent. Number of complaints processed National Registry 1,028 Tax total 81,537 Processed by tax appeals board 3,507 Processed by VAT appeals board 281 Inheritance tax complaints 1,

10 Inheritance and gifts The deadline for notifying inheritance is six months following the death. For gifts or advance inheritance, the deadline is one month after the gift or advance inheritance was received. Number of cases processed 48,406 Inheritance cases 22,785 Gift cases 25,621 Inheritance tax payable NOK 1.85 billion Audit results record-high amount detected For the second year in a row, the Norwegian Tax Administration has detected record-high undeclared amounts. The preliminary results for 2012 indicate that audits of 7,000 companies detected almost NOK 29 billion in undeclared taxable amounts. For comparison, the figure for 2010 was just over NOK 6 billion. Reports to the Norwegian Prosecuting Authority In 2012, the Norwegian Tax Administration reported a total of 854 persons to the police districts and the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime. Of these, 479 reports related to non-submissions or other matters. The remaining 375 reports concern matters detected in connection with audits. In 2011, a total of 756 individuals/business enterprises were reported for non-submission or other breaches. 355 reports related to audits. About the staff of the Norwegian Tax Administration Number of employees 6,393 (permanent and temporary) Number of full-time equivalents 5,903.4 Female proportion 62 per cent Male proportion 38 per cent Proportion of female managers 52 per cent Average age 48.1 years Employees of immigrant origin 5.2 per cent Employees with disabilities 6.7 per cent The Norwegian Tax Administration s budget Annual appropriation 2012 NOK 5,185 million Operating expenses NOK 4,458 million Special operating expenses NOK 146 million Major IT projects (can be carried forward) NOK 394 million Major equipment procurements and maintenance (can be carried forward) NOK 96 million 18 19

11 Published by: Directorate of Taxes Norway Design: TRY Asap Print: Stupa Copies: 1000 skatteetaten.no