February 16, 2025
A Skattetrekkskonto is a bank account exclusively used for storing income tax advances deducted from employee salaries. Funds in this account are legally protected and can only be used for settlements with the Norwegian Tax Administration (Skatteetaten).
Remember to regularly monitor the account to ensure deducted funds are remitted on time. Setting up both a corporate account and a tax advance account can take several months.
Starting January 1, 2026, changes in the system for remitting employee tax advances in Norway are planned. The Ministry of Finance has announced that the current Skattetrekkskonto system will be phased out in favor of a modern system designed to simplify processes and enhance control over tax funds.
For years, the Skattetrekkskonto has been a cornerstone of proper employee tax advance settlements with the Norwegian Tax Administration. Businesses must continue to adhere to the guidelines issued by Norwegian tax authorities. However, the upcoming procedural changes may prove beneficial, especially for foreign entrepreneurs in Norway, by simplifying the process of remitting contributions to Skatteetaten.
Until now, Norwegian companies, including joint-stock companies (aksjeselskap), sole proprietorships (enkeltpersonforetak), and branches of foreign companies operating in Norway (norskregistrert utenlandsk foretak), have been required to set up and use a Skattetrekkskonto.
What is a Skattetrekkskonto?
A Skattetrekkskonto is a bank account exclusively used for storing income tax advances deducted from employee salaries. Funds in this account are legally protected and can only be used for settlements with the Norwegian Tax Administration (Skatteetaten).
Why is it Important?
- Protecting Employee Funds: Using this account ensures that deducted taxes are secure and remitted on time.
- Regulatory Compliance: Not having a Skattetrekkskonto or mismanaging it can lead to financial and legal penalties.
- Building Trust: Adhering to tax regulations enhances a company's credibility with employees and business partners.
How to Open a Skattetrekkskonto?
- Choose a Bank: For foreign company branches, expect a longer setup time.
- Prepare Documentation: Requirements may vary slightly depending on the bank.
- Set Up a Subaccount: Banks can assist in configuring proper transfers to Skatteetaten.
Remember to regularly monitor the account to ensure deducted funds are remitted on time. Setting up both a corporate account and a tax advance account can take several months.
From the Accountant’s Desk: Issues with Managing Skattetrekkskonto
Case 1: Misuse of Funds
A construction company used employee tax advances for operating expenses instead of storing them in a Skattetrekkskonto. During a Skatteetaten audit, the company was found lacking sufficient funds to cover taxes. Consequently, the firm received a hefty fine, and the owner had to cover the shortfall from personal funds, severely impacting cash flow. This event eroded trust among employees and partners, resulting in additional costs to restore the situation.
Case 2: Auditor Withdrawal
In another case, a service company under auditor review misused tax advance funds for unauthorized purposes. The auditor, adhering to professional ethics, terminated their cooperation and reported the violations to Skatteetaten. The company had to settle the tax shortfall, pay fines, and deal with a damaged reputation. Finding a new auditor proved challenging, as few were willing to work with a company that did not comply with Skattetrekkskonto requirements. Eventually, the firm implemented proper financial procedures, incurring additional costs and rebuilding trust.
Revolutionary Changes Coming in 2026
Starting January 1, 2026, changes in the system for remitting employee tax advances in Norway are planned. The Ministry of Finance has announced that the current Skattetrekkskonto system will be phased out in favor of a modern system designed to simplify processes and enhance control over tax funds.
There will be no "relaxation" of rules regarding remitting employee income tax advances. Subaccounts will be replaced by yet-to-be-defined procedures. It is crucial for foreign entrepreneurs to remain aware that failing to remit employee tax advances or making late payments is considered a serious offense in Norway. This strict approach is unlikely to change.
How to Prepare for the Skattetrekkskonto System Changes?
- Stay Informed: Follow updates from Skatteetaten and the Norwegian Ministry of Finance regarding upcoming changes. We will also share updates on the blog of Novum Økonomi AS – an authorized accounting firm.
- Seek Expert Help: Authorized accounting firms can adapt your company's procedures to new requirements.
- Leverage Modern Tools: Advanced accounting software widely used in Norway can integrate with banking systems and adjust settings to align with new procedures and regulations.
Conclusion
For years, the Skattetrekkskonto has been a cornerstone of proper employee tax advance settlements with the Norwegian Tax Administration. Businesses must continue to adhere to the guidelines issued by Norwegian tax authorities. However, the upcoming procedural changes may prove beneficial, especially for foreign entrepreneurs in Norway, by simplifying the process of remitting contributions to Skatteetaten.
If you need assistance in adapting to the new regulations, contact our office. We are here to help you operate your business in Norway safely and effectively. Our services are tailored to each client's situations, be it a NUF or a Norwegian liability company - our experts know how to work with each client.
Questions about doing business & accounting services in Norway?
Send question now!We are here to help you.