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Unfair Taxation In Norway

Posted on 17th April 2016

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A few days ago I was in The Ophelia Bar (just opposite my hotel - I am a regular there, because the food and drink are good, prices are OK and the staff friendly) with Renato, and we started talking with the owner about tips. Since most things are paid on credit cards here, if you want to give a tip you have to add it to the amount on the credit card terminal; and we were wondering whether the waiter/barman gets the tip, or if the bar keeps the money. It turns out the the waiter/barman keeps the tip (at least at the Ophelia - each sale is tagged with the service person's name), less a deduction that goes as tip to the kitchen staff. Tips seem to comprise about half of the barman's income.

That all sounds very fair, but then we started discussing tax, assuming that tips would be taxable. Apparently that is not exactly the case, as the Norwegian government charges you tax anyway on assumed tips; if you earn more tips than they estimate, you are winning, but if you earn less, or if the company pockets them, then you are screwed.

Taxi drivers are similarly screwed by the tax office. Again, most people pay by card, and can add a tip if they choose. Even if customers add a tip on the card, the tax department assumes that there is an additional cash tip, and taxes taxi drivers on it. So much for "innocent until proven guilty"!

There are lots of other bizarre regulations in Norway, mostly relating to tax and/or alcohol. You can only buy alcohol in government monopoly shops (there is the same system in Sweden). In bars, you cannot order a double of any spirit (but you can order one, and another on the side which you can then add to the first glass). Bars and restaurants may not offer you a complimentary drink (brandy, limoncello, or whatever) after your meal, no matter how much you spent; the same seems to apply to free coffee.

Bars may not give their staff complimentary drinks (not even a coffee), nor free meals (they can sell staff a meal at cost, but not free). The owner of the Ophelia was charged once for having a free coffee at his own bar (the charges were eventually dropped). If he wants a drink he needs to either buy one, or drink from his private cabinet containing bottles he bought separately.

The tax office also investigates discounts (also heavily controlled), and may charge owners if the tax and discount accounts do not all balance.

I thought Germany was bureaucratic and had invasive taxation rules, but Norway really wins the prize!