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Corona Virus- impact on expats working abroad

Corona Virus- impact on expats working abroad

The Corona virus affects all of us and for many it will cause changes in working conditions. Some will find that they must remain abroad for a longer period and others will have a longer than planned stay in Norway. We understand that you as employers have a lot to think about and that the safety of your employees comes first.

Gjertrud H. Behringer

Advokat/ Partner

KPMG i Norge


Relatert innhold

For cross-border employees, the changed work pattern could have an impact on several matters and we would here like to provide a brief summary of a few important matters. If needed, we would be happy to assist with the practical handling and follow-up of the matters mentioned below:

A Secondment Agreement is Required

It is a legal requirement that an employment agreement must be drawn up for an employee who will be working abroad for more than a month, cf. section 14-7 of the Working Environment Act.  The agreement must as a minimum regulate the following:

a) the duration of the work to be performed abroad,

b) the currency in which the remuneration will be paid,

c) any cash payment and payment in kind that is connected to the work abroad, and possibly the terms of the employee’s return trip.

National Insurance Membership

When there is a change in work pattern we recommend that you check whether information should be given to NAV (Norwegian Labour and Welfare Organisation).

Travel Insurance

It is important to check whether your travel insurance needs to be updated, if your stay abroad is extended.

Salary Reporting

If an employee gets an extended stay in Norway in the middle of a secondment and performs work in Norway, it is important that the salary for this period is reported as earned in Norway.

If the stay abroad is extended, it is important that the reporting is also correct.

Tax Liability to Norway and Abroad

When on a work assignment abroad, many will become liable for taxes to the country in which they work. To avoid paying tax to two countries, there are various methods that can be used. In the following we will discuss the most common methods for avoiding double taxation and how a changed stay may affect this.

One-Year Rule

The most used method for secondments abroad is the one-year rule.

It can be used when the following three conditions have been met:

1.   The work assignment abroad must last for more than 12 months

2.   Stays in Norway must not exceed 6 days per month. The entire secondment period is seen as a total

3.   Norway must not have exclusive taxation rights to the income under a tax treaty

The number of allowed days in Norway may be extended to 9 days per month. An increase in the allowed days in Norway is granted in the following case: quoted from Tax-ABC (Norw. Skatte-ABC):

"If the taxpayer must remain in Norway due to circumstances in the country of work that were unforeseen when the work commenced and over which neither the taxpayer nor the employer has any control, he can remain in Norway for up to three extra days for each full month he has worked abroad, cf. FSFIN section 2-1-6, subsection 1.

"Unforeseen circumstances" means occurrences, interventions or obstacles that could not reasonably have been taken into account when the work commenced. This includes external events such as war, unrest, closed borders, natural disasters, as well as the person’s own serious illness or serious illness of the person’s spouse, cohabitant, underage children or parents, cf. FSFIN section 2-1-6, subsection 4."

In our opinion Corona virus outbreaks will fall under the definition of unforeseen circumstances. That means that the allowed number of days in Norway is increased to 9 per month.

If you have an employee that remains in Norway for a long time and who works in Norway during this period, the income should be reported as earned in Norway. It could also be a matter of whether the stay in Norway is of such long duration that the work assignment abroad must be deemed to have been concluded. It must then be considered which method should be used for the income earned before the commencement of the stay in Norway and in the event of a new secondment.

If the one-year rule cannot be used, it will in the vast majority of cases be possible to claim a credit for the tax paid abroad in order to avoid double taxation.

This could lead to an increased tax burden for the employee and possibly the employer if the employee has tax protection.

Tax Treaty with Credit as a Method for Avoiding Double Taxation

If the employee claims a credit in Norway for tax paid abroad, the changed number of days of the stay will not affect the right to claim a credit. As mentioned initially, the changed work pattern will affect the reporting of salary. 

Tax Treaty with Alternative Distribution as a Method for Avoiding Double Taxation

If the employee can claim avoidance of double taxation under the alternative distribution method, the changed number of days of the stay will not affect the right to claim a credit. As mentioned initially, the changed work pattern will affect the reporting of salary.


As shown above a changed stay both in Norway and abroad may have an impact on both the employee and the employer. We would therefore recommend that everyone should keep track of the number of days of the stay. There could be many factors that may cause the employer not to be able to report correctly on an ongoing basis, but as far as possible efforts should be made to ensure that by the end of the year the reporting and taxation is correct.

© 2021 KPMG AS and KPMG Law Advokatfirma AS, Norwegian limited liability companies and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.


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