8

I work in Norway and commute across the border to my residence in Sweden. Since the municipalities in which I live and work border each other, I pay tax to Sweden.

I declared my likely yearly income to the Swedish Tax Authority, and they calculated my tax for me. I need to pay them each month. If I pay too late, there are fees and disadvantages, so it is financially beneficial to pay on time throughout the year.

However, the only reason the Swedish Tax Authority knows how much to bill me right now, is because I declared my income to them. I did not receive a letter. Nobody told me to go and declare. I had to figure this out myself, go to the Tax Office and declare, etc. If I did not declare it, as far as I understand, they would only figure this out by the end of the year, when they have some sort of communication with the Norwegian Tax Agency.

Since I am a shift-worker and have huge variations in my shifts and payments, it is impossible to know for sure how much I will really earn, and I do not really know how much I will work.

So, it occurs to me that the most beneficial thing to do would be:

  1. Declare a very low amount, or perhaps do nothing at all. Thus, I get no bills or very low bills from the STA during the year.
  2. Use the calculator at the STA website to figure out how much I will likely have to pay in taxes if I happen to work a lot.
  3. If I do work a lot, put the amount of money calculated in the previous step into a high interest (no risk) account, and collect profit from it.
  4. At the end of the year, declare my actual income to the STA. One month later they will send me a huge bill, but I have that money in the high interest account. So I just pay it from there, and keep the interest profits for myself.

As far as I understand, the STA does not have any penalties or interest or anything like that for people who declared late. They only charge you these fees when you declare early. Therefore I see no advantage to declaring early. It seems like it is enough to do it during the year some time.

Another reason I like this plan is flexibility. If I work very little one month, and earn very little, the STA will still demand the regular sum that month, even though I might not have that money yet. They make me pay the yearly average throughout the year, so the fact that I work less one month and may not even have the money to pay for one month makes no difference to them, and I would still incur the penalties.

I have searched around a bit, and I have not learned about any penalties or negative consequences for delaying the declaration for as long as possible.

Are there any disadvantages to this plan?

  • I know nothing about your laws and penalties, but I would recommend writing down every possible scenario. (1) Declare like usual but don't pay anything: What are the fees vs. what is the maximum no-risk investment yield you could make? (2) Declare like usual but pay a partial amount. (3) Declare some lesser amount and don't pay anything. (4) etc... – dg99 Jun 22 '18 at 21:48
  • I would say that the asker needs to get help from a Swedish accountant who should know better than most of us here. – Björn De Meyer Jul 30 '18 at 5:37
  • Then I would say it's not worth while risking it. Governments have a tendency to make problems if you don't pay taxes in the way they like. But, perhaps someone of your friends or family is acquainted with an accountant? It's not a rare profession, you might be able to find someone who can give free advice. – Björn De Meyer Jul 31 '18 at 4:54
  • You dot not ahve downpayments in the next year? In germany that only works for one year - next year you get quarterly downpayments for most of the tax based on the income projection. – TomTom Feb 11 at 16:14
0

Yes, you can. But unless your tax burden is several 100 000 EUR or the equivalent in SEK, then the expected gain is probably less than a dinner for two (drinks not included).

  • @Revetahw Sounds like you earn something upwards of a million NOK then. And that's the 100k€ threshold that TorstenS mentioned. – TooTea Feb 11 at 14:06
  • @Revetahw Note that: 1) You'll be effectively earning interest over 6 months on average (maybe a few more by paying later as you said) over the total yearly income tax (200k? depending on your circumstances), 2) high interest rates on savings products are often capped to only a small total amount, and 3) anything that earns more than say 2% p.a. after tax is probably not risk-free. – TooTea Feb 11 at 14:23
  • @Revetahw Thanks. Your spreadsheet shows that the 9k is the interest over your whole 550k salary, but you should instead calculate it from your total tax if you want to see how much you earn by deferring the payment. – TooTea Feb 11 at 15:58
  • @TooTea Ah, you're right. Haha. – Revetahw Feb 11 at 16:25

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .