Perverse tax incentives for Norwegian travel claims

When I take work-related travel — fieldwork or a conference — I get paid a per diem to cover my meals (accommodation costs are covered separately). The per diems vary by country, but are otherwise fixed across the Norwegian public sector, paying a PhD student and the university’s rector the same amount.

So far so fair. But then it gets weird: if I stay in a hotel, the per diem is tax free; if I stay in a guest house or hostel (without cooking facilities), over half of the per diem is taxable.  Since the cost of the food I buy during the day does not depend on the type of accommodation I use at night, I cannot imagine what the purpose of this rule is. I also don’t imagine that the politicians and senior civil servants who write these regulations would stay anywhere other than a hotel (*****) when travelling for work, and so are not affected by it.

If I stayed with a friend or somewhere I could theoretically cook, then even more of the per diem is taxable.

With a marginal tax rate of 45%, the tax on the per diem amounts to a respectable amount of money after a week-long conference. This make the tax rule a perverse incentive to stay in an expensive hotel (costing my project more) rather than staying somewhere cheaper.

About richard telford

Ecologist with interests in quantitative methods and palaeoenvironments
This entry was posted in Uncategorized and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s