Employees who participated in Equinor’s share savings plan in Norway paid too much tax
From 2017 to 2021, employees in Norway who received bonus shares through the share savings plan were entitled to a higher annual tax exemption than they got.
Bonus shares that Equinor employees receive as participants in the share savings plan is a taxable benefit taxed as salary. The benefit generally amounts to the market price of the bonus shares.
From 2017 to 2021, it was possible to reduce the taxable benefit by a tax-free amount. Instead, Equinor reported the full value of awarded bonus shares without deducting the higher tax-free amount, and the company has thus reported excess income for employees, which has resulted in individual tax that is too high.
In total, Equinor has reported excess income of up to NOK 14,000 for individual employees who received bonus shares in the period from 2017 to 2021. Depending on the individual’s tax rates, employees may have paid up to around NOK 6,500 in excess tax for the entire five-year period.
What is being done?
Equinor is working with Norwegian tax authorities to reach a common settlement for employees, pensioners and other former employees who received bonus shares through the share savings plan in the period from 2017 to 2021.
It is understandable that people wish to take individual action to have their tax corrected. However, the tax authorities are encouraging employees to refrain from correcting their tax or submitting requests in this matter, as the volume of individual requests is increasing the workload for the authorities.
Equinor is taking the matter seriously
This matter was brought to Equinor’s attention by employees.
“I’m glad that the mistake was discovered, and now we’re reviewing our processes to prevent similar incidents in the future. The focus of the share savings plan has been to encourage long-term ownership in the company, not the tax benefits related to such a plan. We have therefore not had the necessary focus on the changes in legislation that resulted in an increased tax exemption,” says Leif C. Middelthon, Equinor’s head of reward.
“Equinor takes this very seriously. Employees should be confident that we have good routines in place regarding tax reporting, salary and other benefits,” he says.
Table with explanations
Period | Maximum tax-free benefit | Maximum annual tax-free contribution from Equinor* | Maximum unclaimed tax-free benefit |
|---|---|---|---|
| 2017 | NOK 3,000 | NOK 1,500 | NOK 1,500 |
| 2018 | NOK 3,000 | NOK 1,500 | NOK 1,500 |
| 2019 | NOK 3,000 | NOK 1,500 | NOK 1,500 |
| 2020 | NOK 5,000 | NOK 1,500 | NOK 3,500 |
| 2021 | NOK 7,500 | NOK 1,500 | NOK 6,000 |
| Total | NOK 21,500 | NOK 7,500 | NOK 14,000** |
* Since the beginning of the company’s share savings plan, participating Equinor employees have received an annual tax-free contribution of up to NOK 1,500. Other than this tax-free amount, employees have not been able to utilise the remainder of the potential tax-free benefit during this period. As of 2022, the contribution from Equinor is no longer tax-free.
** Equinor has reported up to NOK 14,000 in excess income for participants in the share plan during the period from 2017 to 2021. Depending on the individual’s tax level, among other things, this amounts to up to around NOK 6,500 in excess tax for the entire five-year period.
Equinor will update this page when there is new information in the matter.