The first of 18 tax evasion cases filed against local Norwegian employees of the US Embassy in Oslo has resulted in a 36-day jail term. A former security guard at the embassy was sentenced for failing to make sure that the embassy withheld taxes on his behalf or that he paid what he owed himself.
The 34-year-old guard worked for the US Embassy from 2008 to 2012. Newspaper Aftenposten reported that during his job interview, he was told that the Americans never report or withhold local employees’ earnings to the tax authorities as a matter of principle.
Embassy officials confirmed in an email to Aftenposten that they do not share employees’ earnings with Norwegian tax authorities. They added, however, that the employees are obliged to pay taxes on their earnings themselves, and that they believed the majority follow Norwegian tax rules.
Tax evasion charges involving the embassy also came up four years ago, when TV2 revealed that 11 former Norwegian police officers, working for the embassy as so-called “agents” conducting surveillance of local citizens, also had failed to pay taxes on their embassy earnings. The 11 men had collectively earned NOK 10.2 million under the table between 2002 and 2010, when TV2 revealed the surveillance operation that ended in scandal.
Tax authorities also reported the 11 for tax evasion but the Østfold Police District dropped the case even though the former “agents” admitted they had worked without paying taxes on their embassy earnings for years. They ultimately were hit with tax penalties but avoided jail.
The 34-year-old was acquitted of tax evasion for the years 2008 and 2009 but convicted for the years from 2010, when the embassy’s surveillance scandal and its lack of tax withholding became known. The judge in the case wrote that the defendant then presumed his earnings were taxable but “stuck his head in the sand.” That amounted to pre-meditated tax evasion, the judge determined.
The former guard owed NOK 340,000 (around USD 56,000) but was only convicted for the NOK 180,000 he “forgot” to declare after the embassy tax case hit the news in late 2010. His defense attorney said he was considering an appeal because the former police officers received different and milder treatment.