RF-1199 – Norwegian tax penalties may be illegal


EU resident enterprises doing business in Norway should claim refund of RF-1199 late filing penalty charges. It is our view that the obligation to file the RF-1199 form is discriminatory and Norway is likely in breach with EU law.

Introduction – the RF-1199 reports

RF-1199_constructionIn order for Norwegian tax authorities to stay informed of foreign companies and employees working in Norway, there is an obligation to report the use of non-Norwegian contractors and subcontractors and their employees on a form called “RF-1199”. The obligation to file this form rests with the Norwegian principal or contractor as well as the non-Norwegian contractor or subcontractor.

Failure to file the RF-1199 form may result in severe late filing penalties. The maximum penalty is NOK 75 000 per contractor or contract and NOK 15 000 per employee, and as such the total penalty charge can be substantial.

The Norwegian reporting regime is likely in conflict with EU rules

Norway is a member of the European Economic Area (“EEA”) Agreement meaning that Norway must adhere to the fundamental principles of EU law, including the “four freedoms” i.e. unrestricted cross-border movement of goods, capital, services and persons. Consequently, Norway may not, in any way, discriminate EU contractors compared with Norwegian contractors.

The RF-1199-reporting regime does not apply to contracts awarded to Norwegian contractors. Thus, in our view it is obvious that EU contractors are discriminated by this reporting regime, and therefore the regime should most likely be regarded as illegal.

In April 2015 Visma Advokater therefore filed a complaint to EFTA Surveillance Authority (ESA). In a preliminary assessment of 13 January 2016, ESA concluded that the RF-1199 rules are contrary to the EEA-agreement.

However, the Norwegian Ministry of Finance keeps defending the rules while giving notice that they will consider to ease the reporting obligations.

Repayment of RF-1199 penalties

We cannot expect that the Ministry of Finance will give up easily, and it may therefore be some time before we have the final answer.

RF-1199_claimESAs view is well reasoned, and if this conclusion is sustained, the RF-1199-penalties should be deemed illegal. Norway will then have to repay these penalties, but most probably, this will be done based on precise claims only. Therefore, it is important that those who have been hit by such penalties claim their rights.

In other EEA matters, we have experienced that the State will invoke the statutory limitation period of three years.

Our recommendation is therefore that those who have paid the RF-1199 fee already now should try to secure the refund claim by taking the necessary legal action in order to prevent obsolescence.