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No exemption for commuters

Lufttransport operates two AS 332 Super Puma-helicopters for the Governor of Svalbard and the Ministry of Justice and Public Security. FOTO: Eirik Palm

No exemption for commuters

Special treatment is not applicable when the income tax policy for Svalbard is changed, according to Norway's finance minister.

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07.11.2014 kl 12:35

"In my opinion there is no basis for the Ministry of Finance to propose a rehearing of this matter in Parliament," wrote Finance Minister Siv Jensen (FRP) in a decision provided to Lufttransport and LT Tech, which have a contract with The Governor of Svalbard and the Ministry of Justice and Public Security to provide search and rescue services in Svalbard.

Reason for the answer
Jensen's decision stems from a letter from companies in Svalbard claiming the change is potentially dangerous because it may be difficult to recruit pilots, rescuers and other personnel that are based in Longyearbyen. At present, there are more people who commute between Svalbard and the mainland. Working hours are regulated by work- and rest-periods laid down by Norwegian authorities, and the companies noted in their letter there is a risk employees will opt for similar work in mainland Norway with lower commuting times.

"We will conduct ourselves according to the decision and conform to it," said Hans-Arne Jensen, regional director for Lufttransport. "Currently, we don't see any danger, but we have pointed out the risk and that Svalbard's tax regulations draws people to Svalbard. The risk situation we have to contemplate is a loss of competence due to our high-level expertise looking around for similar work in mainland Norway."

'No basis'
As of Jan. 1, everyone working in Svalbard must either be reside here or stay in the archipelago for at least 30 consecutive days to be eligible for Svalbard's lower tax rate.
The reason for the change is to prevent Longyearbyen from turning into a commuter society instead of a more robust family community. When Parliament approved the policy in 2010 it also adopted a phase-out period so employers and employees could prepare.

Now there are fewer than two months left until that period is over and Siv Jensen stated there are no changes that suggest a different conclusion.

"There should not be added a special solution for personnel working in shifts in Svalbard for search and rescue," she wrote. "It would entail discrimination between different groups, which in my opinion there is no basis for."

Skeptical

Svalbard's income tax rate of 16.2 percent, compared to 28 percent on the mainland, is lucrative. When tax policy for Svalbard was considered, it was shown that a lactation could lead to weakened possibilities for recruitment of manpower. A national working group that assessed various aspects of a tax change concluded that it would have adverse effects on Svalbard's development into a commuter community.

The problem for Lufttransport is the crew aboard the rescue machines are not allowed to work more than a certain number of hours per year, since it comes at the expense of the work- and rest-time regulations.

Several employers in Longyearbyen and Svea have employees who commute. AF Arctic, LNSS and Store Norske are the largest. At the latter, union steward Arild Olsen said he is skeptical. He said he believes the new system is outdated and doubts a tightening of tax policy will bring more families in Longyearbyen.

"Forcing people to spend their free time here for them to get tax benefits, thereby denying many to have the best possible contact with family and friends on the mainland, is not a positive measure," he told Svalbardposten in early October.


Translated by Mark Sabbatini

Se bildet større

"There should not be added a special solution for personnel working in shifts in Svalbard for search and rescue", finance minister Siv Jensen says. FOTO: Norwegian Government

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