Taxes during your sabbatical year
It's a good idea to familiarize yourself with the applicable tax regulations that govern your stay abroad before you travel. What follows is a selection of things that you ought to keep in mind as you prepare to move. Norsk versjon - Skatt og utenlandsopphold
Norwegian tax card #
Contact your tax office - both before and after your trip. You must send a letter to apply for a tax reduction during your stay abroad, along with a letter of invitation from the institution that will host you. The tax office will then issue a separate tax card for the period during which you are overseas based on their decision in terms of a reduction in taxes. The decision should be sent to the Payroll Section.
The Norwegian Tax Administration has a great deal of information on its website on taxes for workers who live abroad, but some of it is in Norwegian.
The Euraxess portal for researchers also contains some useful information on taxes and sabbaticals. You should read these rules carefully, because it is possible that you will save yourself some tax. Norway has quite substantial tax agreements with some countries, particularly the USA.
Research scholarships are taxable #
Research scholarships are liable for taxes, because the scholarships that involve a work situation are always considered to be subject to taxation. But you can take deductions for expenses and additional expenses during your stay abroad. Your expenses must be supported by documentation, so make sure that you save all of your receipts.
Taxable in Norway? #
Your tax obligations depend on a number of factors, including how long you will be abroad, whether or not you own real property in Norway and what kind of work you will be doing when you are abroad. The main rule is generally that you pay taxes in the country where your income comes from.
To avoid double taxation, you should become familiar with the different tax agreements that Norway has signed with different countries.
For example, France and Italy and some few other countries have an agreement that means you tax liability remains in Norway, even for salaries that are paid by French or Italian institutions for teaching and research. The US and Norway have a special tax agreement that can exempt you from taxes in both countries. But read the rules carefully -- your letter of invitation from your American host institution must include what obligations you will fulfil for your host institution.
If there is no tax agreement between the country where your income will be taxed, you can apply for a reduction in taxes from the Norwegian government for the taxes you have paid while abroad. In this case, you must be considered a resident of Norway from a tax perspective.
Income tax return #
You have an obligation to file a tax return in Norway even while you are abroad, and you may also need to file a tax return in the country where you have your sabbatical stay. Check this carefully. Contact the Payroll Section for more information.
Changes in the time period or dates for when you will be overseas after you have already verified information about your stay abroad must be sent to the Payroll Section as soon as possible, so that the correct information can be entered into the system before the documents for your payroll and tax deduction documents are prepared.
If this information is missing or wrong, you may end up having more tax withheld than is necessary.
You must remember to check the pay and tax deduction form that you get at the end of the tax year. This is where your employer provides information about your sabbatical income to the tax authorities.