Skattekaos for festivals: - They have broken the law

Private festivals, such as the øya festival and most major festivals in Norway, has for a long time violated the law, believes a tax advisor Espen Øren.

Festivals fear the tax for volunteers: - Not very sexy

It comes in the wake of Dagbladet case that festivals fear a heretofore unknown treasure for the volunteers.

the tax could namely informing that the festivals are obliged to report volunteers who receive taxable pass, as a reward for his trouble. According to them, was previously the taxpayers themselves, who had the responsibility to report.

so, therefore, that the festivals had not done anything illegal.

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But now, however, Øren, who is a former employee in the tax administration, reviewed the rules for the Newspaper. He believes festivals have always been obliged to report, and that they thus have broken the law systematically.

the Claim should prove to be supported by both the tax administration and Siv Jensen's statements.

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- They have in fact violated several laws, says Øren.

This question has had untold consequences in a short time, " says Tone Østerdal in Norwegian Konsertarrangører (NKA).

Unintended consequences

It all started when member of parliament Åsunn Lyngedal (A) raised the issue in Parliament, last week.

In a written question to the minister of finance Siv Jensen, called for she a clarification of what rules apply for kulturnæringens duty to taxing motytelser for volunteer effort.

While she waited for a response, surveyed Dagbladet the rules for the festivals.

Therefore, he enrolled himself out of the masonic lodge Dagbladet Plus

the tax administration to be able to inform you about the reporting and the tax also applies to tickets that are given to volunteers as a reward for voluntary effort. The exception are tickets which are worth less than 1000$, or 10 000 $ for the non-governmental organisations.

- Hoderystende wonder and concern can well easiest way to describe the mood now. Words like "umusikalsk" and "absurd" are used, says Tone Østerdal, managing director of the Norwegian Konsertarrangører, about festivalenes reactions last week.

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It would soon be even worse. After Ørens review told the Newspaper the tax administration to take a position on festivalenes practice has been illegal.

Sit Ringså, seksjonssjef in the legal department, will not answer the question about offences in particular, but have come up with several statements that confirm the Ørens claim.

- It is correct that Espen Øren writes that the reporting of taxable wages/benefits to employees is the same as before, and the previous answer was in that way somewhat imprecise.

Employers that pay out salaries or other benefits/remuneration to employees is now, and was also before 2019 responsible to report this to the tax administration, " she says.

Furthermore, Ringså confirmed that fripass paid to volunteers as a reward for work is considered wages, and thus is reporting - and taxable. Thus also must social security contributions be paid.

Categorically

Øren is on his side categorically. He emphasizes that the festival is considered as the employer and the volunteer as an employee when it is paid salary.

Festivals have broken the tax laws, because they do not have tax deducted by their employees, skatteforvaltningsloven, because they are obliged to report, and the national insurance act, because they do not have paid national insurance contributions, he says.

From the full disaster of the magi

the Consequences of the lack of reporting may include coercive fines (daily fines, ed.anm..), overtredelsesgebyrer and additional tax.

- It may get long intermittent power, says Øren.

Headaches

the Force of the NKA tells us that the question now has become a headache for the festivals. She explains why they have not reported the volunteers earlier:

It has been a different case law in the courts relating to the question of whether volunteers should be considered employees or not, and we have judgments that go in both directions. We have assumed that volunteers are not considered employees.

Thus do not have the festivals of the rain tickets they give to volunteers as a reward, and not as reporting and taxable.

But in Siv Jensen's answers in Parliament, which arrived on Tuesday, " the minister of finance that "benefits that are not required for the exercise of the volunteer effort" is the reporting and taxable.

Also this supports the Ørens the assertion of the offences, as the festivals give out fribilletter to the days where the volunteers are not working.

"Worried"

Are you concerned about the consequences of this, the Tone of the Force?

- Yes, I'm worried. If it is required that volunteers to be the tax of the time they are on the venue or festival when they have specific tasks, in addition to that the organizer must pay a payroll tax for this, so it will have unintended consequences. Now, it is important that politicians go in themselves and take a stand to what kind of cultural life they want Norway to have, " she says.

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For Jonas Prangerød, PR-manager in the øya festival, is the information that has come up bad news.

We have felt that we have had good control and we have followed the same practice as the rest of the organizer-Norway. We have related ourselves to a bransjenormal. There are items here that a whole industry has not been aware of. Now we have to see what is the practical solution here, " he says.

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In a closed Facebookgruppe for the music industry suggests one of the members a loophole. Festivals can create a volunteer organization that wages in the volunteers.

Then, becomes the limit for reporting and taxable benefits 10 000 € instead of 1000€. When Dagbladet confronts Lean Ringså in the tax administration with this, she says:

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- the tax administration expects private companies and non-governmental organisations relate to the innrapporteringsforpliktelsene that apply for those, and have no idea how the civil law organizes his activities/operations so long as they follow the current terms and rules for this.

Skeptical

But Øren is wary of smutthullet.

- If the purpose is to circumvent the tax, it is quite likely that the tax administration will cut through. I would in any case not dry it, without having to get a prior authorization from the tax administration first.

Nor does the Line in the NKA would like a situation where the festivals make use of the loopholes.

- We want a regulatory framework that ensures that we can maintain the voluntary commitment. If not, it can have enormous consequences.

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