TONO is required to report, but not to withhold. This means that we can settle and pay out money to our members without deducting tax, but we must report the amount to the tax authorities. We place great importance on following the rules for reporting, because the consequences of errors can be significant.
/ 23/03/2010 / codexThe TONO fee is normally taxed as business income and must be reported under code 401. In previous years, our members could enter the settlement amount themselves in the correct item in their tax return, even though TONO used this code when reporting.
For the 2008 tax assessment, however, the Tax Administration changed even more of its routines from manual to electronic case processing. Such a change means using standardized rules for data processing and it always has some consequences. One of the consequences was that everyone who received a report with code 401 was sent a tax return for self-employed persons. At the same time, the income from TONO appeared as business income in the pre-filled tax return.
Many of our members are in business and for them this was an advantage, but for those of our members who have never run a business this caused some challenges when completing their tax returns.
When TONO became aware of the new practice of the Norwegian Tax Administration, we tried to find out if there was anything we could do to adapt our reporting. The goal was to ensure that as many people as possible would receive a correctly pre-filled tax return.
We have been in dialogue with the Norwegian Tax Agency, and this year they are making some changes to the processing of LTO code 401, which is the code TONO uses when reporting. The new thing is that if the reported amount on the code is less than NOK 50,000, and there are NO other indications that the person concerned is considered a self-employed person, the person concerned will receive a tax return for an employee/pensioner. Taxpayers who receive this can then take advantage of the delivery exemption if they otherwise meet the conditions for it. This means that you can receive the tax settlement in June if the tax office has finished processing the tax return, and you do not miss an inspection.
If the amount is over NOK 50,000, the person concerned is considered a business owner and must comply with the applicable legislation. The reported amount under code 401 is then presented on the special page for business owners and the taxpayer must ensure that it is included in the business return themselves.
Many of our members ask about settlements during kr 1.000,- is exempt from reporting, and whether this is a limit that applies to each performance venue. Unfortunately, this is not the case.
Settlements are to be considered royalties, and since they are not covered by the term salary, this means that all payments must be reported, regardless of the size of the amount.
TONO can only encourage all members to check their tax returns carefully, change the entries that need to be corrected and, if necessary, explain the changes you make. In addition, your local tax office will provide you with the help you need.
Good luck!