Tax deduction bond
Pursuant to the Norwegian Tax Payment Act, all companies that pay salaries or pensions are required to ensure that the payment of tax (tax deducted at source) is guaranteed. Normally, tax money is deposited in a blocked account, a “tax withholding account” (skattetrekkskonto). The money in such accounts is held until it is paid out and can only be paid to the local accounting office (Kemnerkontoret). A tax deduction bond is equivalent to paying into a blocked account. But a tax deduction bond provides tax creditors with an insurance that provides coverage in the event of a company being unable to pay their tax liability by the due date.
The Tax Deduction Bond offered by Nordic Guarantee is accepted by accounting offices as a means of guaranteeing deduction liabilities. This allows companies to release capital that would otherwise have been tied up in tax withholding accounts and avoid having to spend countless hours on administrative work.
