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Friday, June 21, 2024

Huge tax evasion case set to unfold

Norwegian tax authorities have succeeded in getting an indictment against a 63-year-old Norwegian broker and businessman for allegedly evading taxes on NOK 485 million (USD 56 million) in income and net worth. He claims innocence, with the main dispute over whether the defendant’s “tax home” is in Norway or Cyprus.

The authorities claim Stein Harald Schie of Lier legally resides in Norway, and is thus obligated to pay taxes in Norway on his income and net worth. Schie, however, registered his address as being in Cyprus as long ago as 1998 and claims he still legally lives and pays his taxes there. Cyprus imposes much lower taxes than Norway does.

At issue are the rules governing the definition of residence. In order to avoid paying taxes in Norway, Norwegians as well as foreign nationals can only be physically present in the country for 183 days a year (just under half the year). An additional rule calls for taxes to be paid if the person involved has physically been present in Norway for more than 270 days over the course of three years.

It’s the latter rule that’s a matter of dispute between Schie and the tax authorities, with investigators claiming they’ve been tracking Schie’s arrivals and departures over several years. Newspaper Dagens Næringsliv (DN) reported Tuesday that the authorities believe Schie spent too much time in Norway from 2003 to 2005, unleashing tax obligations from the third year on NOK 137 million in income and NOK 348 million in net worth for the years from 2005 to 2013.

“The indictment is not correct, because it is based on him being resident in Norway,” Schie’s defense attorney Nicolai V Skjerdal told DN. “Schie is resident abroad and runs his business from Cyprus, where he has paid his taxes.”

The stage is thus set for a major tax battle in court, which prosecutors said they will carry out in the courtroom and not in the media. They have claimed on both state broadcaster NRK and in some local papers, though, that they believe they have a good case against Schie.

Schie is known as being a star broker in the offshore business, negotiating oil rig deals for many of the largest oil drilling companies in the world. He also owns half of a helicopter company in Norway, Stålkråka, has other property in Norway and allegedly owned cars in Norway valued at NOK 1.7 million in 2013.

If found guilty of aggravated tax evasion he faces fines or a prison term of up to six years. Berglund



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