Additional tax and aggravated additional tax – when can it be avoided?
A notice does not mean the case is decided. Before additional tax is imposed the business must normally be given a chance to comment, and the deadline must as a general rule be at least three weeks. Excusable circumstances and voluntary disclosure can remove it entirely.
When can Skatteetaten impose additional tax?
Additional tax (tilleggsskatt) can follow where the business has given incorrect information, has given incomplete information, or has failed to give mandatory information, and this has led to or could have led to a tax advantage. For ordinary additional tax, Skatteetaten does not first have to prove that the business was negligent. The rules are built on an objective model. Skatteetaten does still have to prove, on a clear balance of probabilities, both that the information failure occurred and that it could have produced a tax advantage.
How high is the additional tax?
Ordinary additional tax is normally 20% of the tax advantage. The rate is 10% in certain cases where the incorrect or incomplete information has also been reported to Skatteetaten by an employer or others under the third-party information rules. In more serious cases Skatteetaten can impose aggravated additional tax (skjerpet tilleggsskatt) on top. That is 20 percentage points, bringing the combined additional tax to 40%, or 40 percentage points, bringing it to 60% in particularly serious cases. Aggravated additional tax requires the information failure to have been intentional or grossly negligent. The standard of proof here is far stricter: the facts and the necessary degree of fault have to be proved beyond reasonable doubt.
Excusable circumstances can remove the additional tax
Even where the objective conditions are met, additional tax must not be imposed where the business's circumstances must be regarded as excusable. There is no exhaustive list. Circumstances that can be relevant include serious or sudden illness, accidents or other extraordinary events, certain complicated or unclear points of law, and technical or factual misunderstandings the business could hardly have been expected to catch. Ordinary unfamiliarity with the tax rules is, as a general rule, not enough. A business is expected to a greater degree than a private individual to acquaint itself with the rules that apply to it.
What if the accountant made the mistake?
That does not automatically get the business off. The starting point for ordinary additional tax is that the business itself is responsible for the information it files being correct and complete. Mistakes by an accountant, auditor or other adviser are therefore normally attributed to the business. For aggravated additional tax the distinction matters particularly. Here it is not enough that the accountant alone acted intentionally or with gross negligence. Skatteetaten has to assess the taxpayer's own conduct.
Voluntary disclosure can prevent additional tax
Where the business itself corrects or completes earlier information so that the correct tax can be assessed, additional tax should normally not be imposed provided the conditions for voluntary disclosure are met. The correction must normally not be prompted by an audit Skatteetaten has already started, an audit the business knows will be started, or information Skatteetaten has already received from others.
Does the additional tax have to be paid while you appeal?
No, not the additional tax itself. Once a valid appeal has been filed, the business is automatically entitled to have enforcement of the additional tax deferred. The ordinary tax or VAT underlying it does normally still have to be paid. The appeal deadline is normally six weeks from the date the decision was received.
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This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.
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