Ex-embassy guard jailed in tax case

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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.

More than 50 locally hired employees at the US Embassy in Oslo are under investigation for gross tax evasion, after failing to declare their embassy incomes or pay tax. The alleged evasion was aided by the fact that the embassy itself refuses to report what it pays its employees to Norwegian tax authorities, and thereby also avoids paying Norway's employer taxes because of its diplomatic immunity. PHOTO: newsinenglish.no

The US Embassy, like other embassies in Oslo, refuses to report local employees’ earnings or withhold taxes they owe, in line with other diplomatic privileges like avoiding taxes, not least employer taxes. The tax issues emerged along with TV2’s reports of a surveillance operation that former Oslo police officers allegedly ran for the embassy from the top floor of the building at the right. PHOTO: newsinenglish.no

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.

newsinenglish.no/Nina Berglund