Norway/Tax on personnal pension contributions
QUESTION: Hello and thank you for your time,I have worked in Norway for many years on the continental shelf. I am employed by a Norwegian employer, and pay tax and national insurance to Norway.I am a british citizen and live in the U.K. The company I work for have a group pension plan and they pay a percentage of my monthly salary to a U.K. based pension company is it correct that I pay tax on this employers contribution to the Norwegian authorities.Also on the same pension plan I make a personnal contribution of an agreed percentage of my salary, is it correct that I am unable to get this portion as a tax deductible.
Thanking you for any advise you can offer. Regards
ANSWER: Pension savings are tax deductable. You do not pay taxes on what the employer pays for your pension scheme. You will however pay taxes when the pension is paid out in the future- normal income tax.
But this only goes for the norwegian part of your tax. If you live in the UK you pay mostly UK taxes, not norwegian taxes. How it is over there I don't know. The UK and Norway has a tax agreement that ensures that people should only pay taxes one place.
There is a ceiling for how much pension payments are deductable. But normally employees never reach that ceiling.
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QUESTION: Hello again and apologies for not completely understanding your answer.
I realise that when I eventually retire and continue to live in the U.K. I will be liable to U.K. tax on any income I have from this pension plan. The question I have, is regarding my employers contribution to the group pension plan, "which is with a U.K. pension provider" at the moment and for many years, my employer has paid 7.8 percent of my salary into the group pension plan, this is soon to increase to 13.1 percent of my salary. I have paid tax to the Norwegian tax Authorities on my employers contribution for as long as the plan has been active, approx. since 1998 I have been advised many times by my employer and the Norwegian tax authorities that I must pay tax on this contribution.At the same time I have also made a personnal contribution from my salary of 6.2 percent towards the same pension plan, and I have been advised, again by my employer and Norwegian tax authorities that I cannot claim my contribution as a tax deductible from my salary. I am taxed on my whole salary including my employers contribution to the pension plan, yet I do not get any "relief" on my contribution. I have tried to bring my concern to the attention of the tax authorities and my employer but they tell me that it is because it is a group pension plan with a U.K. pension company. So my question is how do I go about claiming a tax deductible on my contribution to this pension plan, and how can I stop being taxed on my employers contribution to the same pension plan. wow that was a lengthy letter. Thank you for any help advise you can offer Regards Frank H.
Across-borders taxes are never easy.
What you've been told is correct then. Since you're paying on your own private pension plan in the UK in addition to the norwegian public pension plan, then you can't deduct your contributions. I'm not going to argue against your repeated advice from the source of these things.