National meetings and consultations

Pan-Nordic issues

NORWAY

• Ellen Mulstad, NHO (The Norwegian Confederation of Business)
• Anne-Lise Rolland, LO (LO Norway)
• Kjetil Staalesen, LO (LO Norway)
• Bengt Holmen, The Federation of Norwegian Professional Associations
• Jon Olav Bjergene, Unio (The Confederation of Unions for Professionals)
• Morten Skauge, Virke (The Federation of Norwegian Enterprise)
• Tore Eugen Kvalheim, Spekter (Norway's leading employers' organisation for private and publicly owned companies)
• Jakob Rasborg, Resonans Nordic
• Fredrik Lundgren, KPMG Denmark
• Håkon Rakkenes, KPMG Norway
• Sandra Forsén, Nordic Council of Ministers

SWEDEN

• Sven-Erik Bucht, Freedom of Movement Council
• Carina Mårtensson, Ministry of Foreign Affairs Sweden
• Ellen Dahl, Chamber of Commerce and Industry of Southern Sweden
• Pål M. Jebsen, Norwegian-Swedish Chamber of Commerce Stockholm
• Claes Hammarstedt, Confederation of Swedish Enterprise
• Sabrina Suikki, Norrbotten Chamber of Commerce
• Jenny Rydstedt, Saco (Swedish Academics)
• Fredrik Lundgren, KPMG Denmark
• Johan Rova, KPMG Sweden
• Petri Suopanki, Nordic Council of Ministers

DENMARK

• Annette Lind, Freedom of Movement Council and Member of Parliament
• Søren Kjærsggard Høfler, Confederation of Danish Industry
• Lene Nielsen, Confederation of Danish Industry
• Jens Heinrich, Freedom of Movement Council and Greenland's Representation in Copenhagen
• Stina Saxbøl, Dansk Metal
• Jacob Ravn, Danish Chamber of Commerce
• Birgitte Nymark, Confederation of Danish Employers
• Tobias Vestergaard Christensen, The Danish Trade Union Confederation
• Jakob Rasborg, Resonans Nordic
• Fredrik Lundgren, KPMG Denmark
• Petri Suopanki, Nordic Council of Ministers

• when a permanent establishment is established,
• fewer registrations in the countries where work is performed
• only taxing the employee in the country of employment, and
• tax rate equalisation between the authorities in the respective countries.

1. The company must withhold personal income tax on the same income monthly in both the home country and the country of work.
2. The company must create a "shadow payroll" in the host country:
   a. if the list is drawn up internally in the company, it is associated with a lot of administration
   b. if the list is drawn up by an external provider, an additional cost is incurred.
3. This affects the employee's liquidity or, alternatively, the company must pay foreign tax on behalf of the employee and get the amount refunded in connection with the tax return.
4. Tax return assistance is required in both home and work countries to ensure compliance with all regulations and tax equalisation.

FINLAND

• Niko Pankka, SAK (The Central Organisation of Finnish Trade Unions)
• Elena Gorschkow, STTK (The Finnish Confederation of Professionals)
• Pasi Sorjonen, Akava (Confederation of Unions for Professional and Managerial Staff)
• Lauri Lehmusoja, EK (Confederation of Finnish Industries)
• Jukka-Pekka Hellman, SY (Entrepreneurs of Finland)
• Emmiliina Kujanpää, EVA (Finnish Business and Policy Forum)
• Minna Ojala, Ministry of Finance
• Ann-Sofie Stude, Ministry for Foreign Affairs
• Anna-Leena Rautajuuri, VH (Tax authorities)
• Paula Holmström, KPMG Finland
• Fredrik Lundgren, KPMG Denmark
• Petri Suopanki, Nordic Council of Ministers

ICELAND

• Individuals and/or families choose to live in two or more countries and/or move between countries for long or short periods of time. Therefore, for example, teachers may have gone on study leave and to study in other countries and their spouses in some cases moved with them and worked remotely while the teachers were studying, or the person has maintained two homes, one in the country of study and the other in Iceland. In some cases, spouses work in two or more countries. If the tax environment is too complicated in the country where the teacher intends to pursue further education, this may lead to the spouse's employer not agreeing to the spouse working remotely, for example because of the increased costs associated with the purchasing of payroll processing services and the risk to the employer that such work could lead to the establishment of a permanent establishment for the employer abroad. If the spouse's employer does not accept remote work due to the complex tax environment and the resulting increased costs, it can lead to the teacher in question opting out of studying abroad.
• There are also examples where teachers' spouses have chosen to study abroad and the respective teachers have chosen to move abroad with them and engage in distance teaching, e.g. for upper secondary education, temporarily, while the spouse is studying. This could be good for the employer (Icelandic school), as the teacher in question would improve their proficiency in a new language and get to know a new culture, which could benefit the school community. If the tax environment is complex and the school needs to purchase payroll processing services abroad, this may prevent the authorisation of such remote work/distance teaching.
• A complex multinational tax environment discourages employees, their families and employers from moving and studying between countries and defeats the purpose of the EEA Agreement.
• It is important to encourage teachers, principals and others to seek further education in other countries, e.g. to increase the diversity of education and background of employees in Iceland. The opportunities for students' spouses to work remotely can make a difference in the feasibility of studying abroad.
• The benefits of increasing the flow of labour, such as school administrators, teachers and students, between countries include increasing the diversity of employees and students in workplaces including schools. Increased diversity brings together people from different backgrounds, including different education and experience. This can lead to more diverse, new and even more thoughtful ideas and decisions, as they can be examined from many different angles and therefore lead to better solutions. It can be assumed that increased diversity can lead to increased innovation and competitiveness for the benefit of society as a whole.
• To this we can add that by simplifying the tax environment, it can make it easier for Icelandic companies to sell goods and services abroad and incentivise foreign companies to start operations in Iceland. A complex tax environment can also lead to tax evasion and tax being reported in the wrong country, as it becomes too complicated for employers and employees to declare income, pay withholding taxes and payroll-related fees in the right country.

GREENLAND

• Problem area 1 – permanent establishment when working from home:
  - also increase in the amount of work performed from home, but this is not very prevalent in Greenland since there are few employees from the other Nordic countries
  - many of the people from other Nordic countries are employed on trawlers, in the mining industry and large construction projects – as well as consultants in the construction industry
  - the expectation is that more work from home will cost tax revenue
• Problem area 2 – Employer registration requirements in multiple countries:
  - there is already an agreement with Denmark, which is where most people come from
  - expectation that it is difficult to succeed, as there will be cases where you fall between two stools
• Problem area 3 – taxation of salary income from work in another Nordic country:
  - in practice, the system is not set up for salaries to be paid to someone without a Danish national ID number. This will make things difficult with Nordic employees
  - some kind of additional ID number will need to be created. For employees
  - expectation that Greenland will lose money
  - tax treaties are therefore needed with the other Nordic countries (there are no agreements with Sweden and Finland)
• Problem area 4 – taxation of pensions etc. when working in another Nordic country
  - Greenland has had a pension agreement with Denmark since 2017
  - the current scheme works for Greenland, where the payment is taxed
  - Greenland will lose tax revenue if it is taxed at payout

ÅLAND

• For those who have Sweden as their country of residence and Finland as their country of employment through their work on Åland, it is important to achieve two separate simplifications of the regulation.
• One solution is that working from home in the country of residence should be equated with work in the employer's country. This is a very important proposal that would have great practical significance for individuals who work in Åland but have Sweden as their country of residence.
• The second solution is that, regardless of whether you are a private or public sector employee, the exemption method is applied to the service income. This could make the Åland labour market more attractive, as Åland's tax level is significantly lower than Sweden's.

• My general observation is that the proposal in the report contributes to a more manageable tax system for taxpayers and is thus in line with the provincial government's budget goal of making it easy to work remotely from Åland. When it comes to the impact on tax revenue, we would probably need to analyse the actual effects that the proposals would have. At the moment, I have not had time to do such an analysis.
• In general, I believe the report is focused and based on the border situation in Øresund. This is a natural effect of the fact that most cross-border commuters are located there, but it makes it a little more difficult to analyse the consequences for our Sweden-Finland border situation.
• Problem areas 2 and 3 propose solutions to implement a common electronic calendar and a compensation system for workers who opt for taxation in the country of work. Such solutions may require system changes or the creation of new cross-border systems. It can be time-consuming and costly and should be a consequence for the Nordic countries, but it is not mentioned under each problem area.

FAROE ISLANDS

Pan-Nordic issues
NFS (Nordic Professional Association)

YS
(Norwegian Confederation of Vocational Unions)

1. The social safety net
2. Home office
3. Corporate planning for tax and labour conditions

• "If a company does not have to take into account where its employees reside and does not have to establish itself in the same country as its employees, the company can choose to establish itself only in the country where it has the best tax conditions in terms of corporate taxation. For example, a Norwegian IT company that has all its employees in Norway may choose to establish its business in Sweden to achieve lower corporate taxation. At the same time, they keep all their Norwegian employees, but in home offices."