Until now, coverage of dietary allowances at the government's rates has been tax-free for employees. The employer has also not paid employer's National Insurance contributions on the remuneration. From 2018, however, there will be a change in this as part of the remuneration will be subject to deductions.
In practice, the change means that if an employee stays in a hotel and is entitled to NOK 733 in dietary allowance under the current state special agreement, the employer will have to deduct tax and pay employer's National Insurance contributions for NOK 150 of these. The same will apply if you live in a guest house or a dorm/private house, NOK 150 of the remuneration of 315 and 205 will be subject to deductions.
The travel module i SAP has the functionality to split allowances into a non-deductible and a deductible part, this part of the change is completely unproblematic for SAP customers. The challenge for the change, on the other hand, will be for many to be able to enforce the Tax Payment Act's requirements for the implementation of withholding tax!
Pursuant to Section 5-10 ofthe Act, "The withholding tax shall be carried out when it arises for the taxpayer to have the remuneration paid, even if settlement for this only takes place at a later date".
This legal basis dictates that it is not allowed in principle to pay a deductive remuneration without making a withholding tax on the remuneration before the settlement takes place.
Tax calculation in SAP Travel
SAP Travel does not have tax calculation as standard functionality, so in order to meet the requirements of the Tax Payment Act, all taxable remuneration from travel must be transferred to payroll for calculation of withholding tax and payment. Many settle travel settlements weekly, while payroll usually paid monthly. A process of settlement for a trip where the payment is split between the salary module and the travel module will lead to both delays in payment and unclear settlements to the employees.
Based on this, Sariba has developed the product «Tax calculation in SAP Travel".
The product includes the following functionality:
- Tax calculation of customer-defined basis
- Tax calculation according to tax deduction
- Also handles employees with exemption cards.
- The tax deduction is transferred to payroll for reporting and settlement.
- Deductible remuneration is transferred to payroll for updating the tax basis