Pilots land on tax authorities’ radar

Norwegian tax authorities want to make sure pilots and flight attendants based in Norway aren’t flying away from their tax obligations. They’ve launched a major probe into those who aren’t full-time employees but instead are hired in by airlines like Norwegian and Ryanair.

Tax authorities are taking a closer look at how pilots and flight attendants hired in by airlines but not employed by them are paying their taxes. PHOTO: Norwegian Air Service

Newspaper Dagens Næringsliv (DN) reported on Tuesday that tax authorities have made their probe “a high priority,” with tax crimes chief Jan-Egil Kristiansen of state tax collection agency Skatt Øst telling DN that “there are many of us working with this now.”

They suspect that many pilots and flight attendants aren’t paying taxes to Norway, even though they are Norwegian citizens, live in Norway and work out of Norwegian airports.

The airlines, over the protests of unions representing pilots and flight attendants, have been trying to cut costs by literally leasing aircraft personnel from temporary employment bureaus outside Norway. Pilots, most of whom would prefer to be full-time employees with the benefits that would entail, are increasingly ending up as selvstendig næringsdrivende (sole proprietors) working on contracts through temporary employment bureaus used by airlines. Newspaper Finansavisen has reported that Ryanair, the low-fare Irish airline, uses a bureau based in Gibraltar, while Norwegian has started using one registered in Estonia.

‘Must examine’ the airlines
This bothers tax authorities not only in Norway but in Sweden and Finland as well. Pia Blank Thörnroos of Sweden’s Skatteverket told DN that she and her colleagues were “very interested” in the Norwegian probe. “We’ve had many such situations in other branches, and now we see that we must examine the airline industry as well,” she told DN.

Ryanair, for example, has been flying out of the Moss Lufthavn at Rygge for several years, but DN reported that none of its crew members working out of Rygge are employed directly by Ryanair. Norwegian, meanwhile, has been using around 30 pilots from a base in Malaga, Spain, none of whom are full-time employees, and also has a base in Helsinki that hires pilots from a bureau registered in Estonia.

Kristiansen of the Norwegian tax authorities said he and his colleagues are looking at “concrete cases” involving aircraft personnel. He calls the situation “serious” because it “undermines the tax foundation, and it’s especially serious if the airlines are consciously doing this.”

Concerns ‘unknown to us’
Ryanair didn’t respond to requests for comment from DN. Anne Sissel Skånvik, communications director at Norwegian, said tax authorities’ concerns “are completely unknown to us” and that no one from Skatt Øst had posed questions either to Norwegian or the employment bureau it uses.

“We assume that those we hire in pay their taxes to the country where they should … where they have their residence,” Skånvik told DN. “We as an airline haven’t heard anything from the tax authorities, and I would think they will come to us and ask for information if there’s something they want to investigate more closely and if we can provide assistance.”

The leader of the pilots’ union Norsk Flygerforbund is also watching developments closely. “We believe in principle that pilots should be employed by the company they fly for,” Aleksander Wasland told DN. He said there are “many long-term consequences” of the different treatment received by full-time employed pilots and those hired in on temporary contracts. “And it’s unfortunate that we have pilots who feel a fundamental lack of security over their jobs,” he said.

Views and News from Norway/Nina Berglund

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