Former professional footballer and Norwegian international player, John Carew was recently convicted of tax evasion. Carew is a well-known and respected figure in the football world, with 91 caps and 24 goals for the national team. His conviction serves as a reminder of the importance of understanding tax residency thresholds and the potential consequences of failing to comply with them. The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, Økokrim, charged Carew in June 2021. For his actions, he was sentenced to 14 months in prison in November 2022.
What happened?
Anyone who spends 183 days or more in Norway per year (or who meets other requirements for being a tax resident) must register as a tax resident, which comes with owing taxes to Norway, according to Norwegian tax laws.
Between 2014 and 2019, Carew spent a staggering 233 days in 2014, 259 days in 2015, 274 days in 2016, 299 days in 2017, 282 days in 2018, and 289 days in 2019.
Carew did not register as a tax resident despite spending far more days in Norway than the threshold limit. The authorities used his payment card payment history to reconstruct the number of days Carew spent in Norway during this period.
Carew has pleaded his innocence, claiming that his excessive time spent in Norway between 2014 and 2019 was unintentional. However, while the court accepted his claim, they sentenced him to 14 months in prison for 'unintentional tax evasion.'
It is worth mentioning that in such cases, the court does not accept ignorance of the laws as a defence. This conviction has far-reaching consequences for people unaware of the tax residency threshold rules and regulations. Moreover, this case shows that tax authorities can check for themselves when rules are broken using various methods such as credit card transaction history.
What can we learn from this
The conviction of John Carew serves as a wake-up call about the possibility of tax problems and the importance of complying with tax residency threshold rules. Though Carew's case may appear unique to high-profile celebrities, it is important to note that this problem is not limited to celebrities and can also affect business travellers.
Navigating tax laws in different jurisdictions can be difficult, but staying informed and compliant is critical as the world becomes more interconnected. The case of John Carew serves as a stark reminder of the dire consequences of failing to understand tax residency thresholds. Businesses and frequent travellers must be vigilant and stay abreast of tax laws and regulations to avoid legal troubles.
Understanding tax laws may appear difficult, but protecting yourself and your business is necessary. That's why we'd like to welcome you to join us on a discovery journey reading our free useful guide on what you need to know about tax law when travelling for work. This guide will give you the knowledge and tools you need to stay in compliance and avoid legal trouble.
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