Thursday, 9 August 2012

Carpenter ordered to pay VAT for hours worked building his own cabin

Here's a real-life example of the Norwegian state's tax collection machine.

Geir Lundheim, a self employed carpenter, has been ordered to pay NOK 106,000 (USD 17,900) in VAT for having built a cabin by himself, to be used for him and his family. He had spent his spare time during evenings and week ends etc to build the cabin reports Hegnar.no, a Norwegian financial news website. The Norwegian Tax Administration Office claims this tax as he has used the firm's "specialised skills" to build the cabin and on those grounds they are entitled to charge VAT on the hours he worked building it.

Let's hope the tax office does not start counting hours worked in private for self employed using their special skills in other sectors, such as;
  • chefs making their own meals
  • investment advisors managing their own money
  • car mechanics fixing their own cars
  • taxi drivers driving their kids to fotball lessons in their private cars
  • and many, many, many, many more!

Soon to be coming to a country near you.

2 comments:

  1. Hey

    yeah it is crazy ruuls here in norway.....I can not build own cabin with my family without pay a lot of vat because I use my experiences from my work in my sparetime.... How is it in other country? Please visit our facebookside http://www.facebook.com/groups/457408440946566/#!/groups/457408440946566/

    Geir Lundheim, Norway

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    Replies
    1. Yes, this is crazy indeed and you are not alone in believing so. Not sure if any other countries have similar rules, but the overall tax burden in Norway is amongst the highest in the world. We wish you the best of luck with this case if you are disputing it.

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