Wednesday, October 20

I never said that Ropstad should avoid taxes

– After dialogue with the Tax Administration, SMK was left with the impression that regardless of expenses, there would be no tax liability on accommodation for travelers, Prime Minister Erna Solberg (H) said at Friday’s press conference. The Tax Administration is now clarifying the case.

If the Prime Minister’s office had provided correct information to the Tax Administration, they would have received a completely different answer to the question whether Kjell Ingolf Ropstad should tax the Prime Minister’s residence.

In October 2020, the Prime Minister’s Office (SMK) sent an inquiry to the Tax Administration. They wanted clarity on whether Kjell Ingolf Ropstad (KrF) should pay taxes to benefit the residence of his prime minister.

In the investigation, SMK described a politician with a wife, two children, and an address registered with his parents. They also wrote: “He pays the rent to his parents.”

But as Aftenposten was able to reveal yesterday: Ropstad never paid his parents a penny. Ropstad said the plan was that it would pay for some of the parents’ housing expenses by the end of the year. He didn’t do it anyway, because SMK told him this was not necessary to avoid taxes.

Both the KrF leader and SMK have pointed to the Tax Administration when they explained why the Ropstad government housing benefit was never reported to the tax authorities in the usual way. They also interpreted the response of the Tax Administration so that Ropstad did not need to have living expenses at home to avoid taxes.

– On the basis of this dialogue, the Prime Minister’s Office perceived that Minister Ropstad’s free accommodation for travelers would not be taxed even if he had no housing expenses at his registered address, communications manager Anne Kristin said on Friday Hjukse to Aftenposten.

The Tax Administration now confirms that the information they received about the rent was decisive for the response that SMK received. Information that is now known to have not voted for Ropstad.

She You can read the complete letter from the Tax Administration to SMK. Below you will see excerpts from the letter, where SMK has stated that Ropstad “pays the rent” to his parents.

– Expenses were the prerequisite

Section Head Lene Marie Ringså in the Tax Administration’s legal department explains that several conditions must be met before the employer’s free housing is tax-free.

– In SMK’s investigation, it was indicated as a prerequisite that there were accommodation expenses at the place of residence. Therefore, this condition was not further problematized in the response letter, he says.

– Is it true that the conclusion of the answer given by the Prime Minister’s office is that travelers with no expenses for housing in their hometown do not have to pay tax on the employer’s free housing?

– The answer to that question is no.

Ringså produces:

– If it is considered that the taxpayer has his tax residence in a parental home and the person in question has no expenses related to this home, then the costs related to the suburban home will not represent an additional cost for the taxpayer. Therefore, the conditions for the tax-free coverage of accommodation costs are not met and the free accommodation must be subject to tax.

And although the condition of the housing expenses in the place of residence was not discussed in the letter, the Tax Administration maintains that the letter contained sufficient information to be able to correctly interpret the law.

– It is emphasized in the statement that the suburban housing must involve an additional cost for the employee, and that it must be in a situation of additional cost. This means that you must have a home in your place of residence and have expenses for it, says Lene Ringså.

The Prime Minister’s Office and Kjell Ingolf Ropstad have so far not commented on the Tax Administration’s statements.

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SMK: He said he had started to pay

SMK contacted the Tax Administration in October 2020. It was a month before Ropstad sent a form stating that it kept expenses at home.

On Thursday evening, Aftenposten sent the letter that the Tax Administration sent to SMK to Kjell Ingolf Ropstad.

– Why did SMK at that time think that you paid your parents rent?

– You have to ask SMK about that, said Ropstad.

– Did they know you were going to pay?

– It may well be that it was part of my dialogue with SMK, yes. I also spoke to them orally.

Aftenposten has asked SMK why they told the Tax Administration that he paid the rent.

– Did the Prime Minister’s office know that Ropstad did not pay rent to his parents when he contacted the Tax Administration?

– No. When SMK sent the query to the Tax Administration on October 26 last year, Minister Ropstad informed us orally that in 2020 he had started to pay the expenses with his parents, says communications manager Anne Kristin Hjukse.

SMK also refers to the form that Ropstad submitted on November 11, 2020. There he verified that he maintained the housing expenses in his hometown.

– Was the Prime Minister’s office aware of Ropstad’s plans to repay expenses to his parents to avoid tax on free housing in fiscal year 2020?

– No. As mentioned, we received information from Minister Ropstad that he paid the house expenses in his hometown in 2020, says Hjukse.

– Has SMK helped Ropstad with tax planning?

– At.

Ropstad does not remember

Ropstad has always denied that it provided incorrect information to the prime minister’s office. On Friday, Aftenposte confronted him with the statement there that he should have said he “had started paying” when he didn’t have it.

– Is it true that you verbally informed the Prime Minister’s office that you had started to pay the expenses?

– I have been in dialogue with SMK that I have household expenses. Exactly as it is worded … My clear opinion is that I have said that I have expenses. If they have interpreted it differently, then they have.

He reiterated that the agreement with the parents was that they would send an invoice towards the end of the year.

– Do you remember that you used those words: start paying?

– No, says Ropstad.

When questioned by Aftenposten, the prime minister’s office maintains that Ropstad is said to have told an employee this.

Aftenposten cannot speak to the person in question. When asked why not, and if the person in question supports her statement, Communications Manager Anne Kristin Hjukse responds:

– We refer to what we have answered previously about this dialogue.

SMK contacted the Tax Administration again

On Sunday last week, the Tax Administration declared in Aftenposten that politicians who live at home for free must pay taxes on the benefit of free housing for travelers.

Following this announcement, the Prime Minister’s office contacted the Tax Administration again. A senior advisor to SMK asked Lene Marie Ringså from the Tax Administration to help them clarify the regulations.

– It is important that we practice the regulations correctly in our handling, as the current case shows, wrote the SMK advisor in the email to which Aftenposten has access.

Ringså responded shortly after that there are requirements for homeownership expenses at the place of residence in order to receive tax-free housing cover for travelers.

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