Double taxation and Seamans foreign earnings deduction

jimmymagnet

Hi

I am a British seaman working for a European contracting company, I will soon be working offshore on a vessel in the Norwegian sector.

I was informed If I work in the Norway sector, I would have to pay the tax as per the double taxation agreement. Any tax I paid to Norway, the UK inland revenue would give me a tax credit? the problem is I am not taxed at source and I usually fill in a self assessment and claim the 100% foreign earnings deduction allowance.

How will I get the tax that Is paid to Norway, if I basically don't pay tax in the UK.

all the best
Jimmy

jennifernil

There are special rules for seamen, do you currently work under those?

I don't understand your "100% foreign earnings deduction" otherwise.

Do you live in UK?

There are special arrangements for seamen in Norway too.

I think you need some professional advice.

If you do have to pay some rax in Norway, you can set it against any you are due to pay here. What you cannot do is claim it back from HMRC.

jennifernil

http://www.skatteetaten.no/en/International-pages/Search-international-pages/?q=tax+arrangements+for+seamen

This might help.

jennifernil

http://www.skatteetaten.no/en/International-pages/Employee/planning-to-work/foreign-employer/77617/Miniguide-for-foreign-businesses-and-employees-engaged-in-contract-work-in-Norway-or-on-the-Norwegian-Continental-Shelf/

and this.

http://www.skatteetaten.no/en/International-pages/Employee/planning-to-work/foreign-employer/77617/Guide-for-foreign-employers-and-employees/?chapter=77692#kapitteltekst

jennifernil

And this....

http://www.skatteetaten.no/en/International-pages/Employee/planning-to-work/foreign-employer/77617/Guide-for-foreign-employers-and-employees/?chapter=77699#kapitteltekst

Cook_County

100% FED is and was the standard terminology. Sadlly the Spice Girls abolished the relief except for qualifying seafarers.

MrRedundant

The way I understand it is;

Norwegian tax authorities will tax you as per their laws and rules.

You will also need to complete a UK HMRC return. On this you will declare all your income for tax purposes and work out the equivalent tax payable. At this point you will be given a relief against the tax payable of that already paid to the norwegian authorities.

Any balance left will be payable otherwise you will have no taxi.

Your post seems to suggest you think your earnings should be tax free in both the UK and Norway?

Cook_County

The OP is correct. He reports 100% of his seafaring earnings on his annual UK tax returns and then claims the 100% deduction so that zero is charged to UK tax.

jennifernil

Yes, but the tax in Norway may not be zero, even under Seamans Rules.

In which case he cannot reclaim the Norwegian tax from the UK.

IF he is being paid Norwegian salary, then this would probably more than compensate.

It does seem like the OP wants it both ways, which is just not possible.