The eastern branch of the Norwegian Tax Administration (Skatteetaten) slapped the woman with a 1.2 million kroner tax bill after tracing undeclared income to her bank account, newspaper VG reports.
The woman said she acted in good faith when she didn’t tell the tax office about the money she earned from prostitution from 2006 to 2010.
Her lawyer, John Christian Elden, said the Norwegian state was not authorized to demand a cut of earnings from prostitution.
“This contravenes the penal code and is punishable as a pimping offence,” Elden told the newspaper.
“The provision [regarding prostitution in Norwegian law] is set up in such a way that it protects people who have to prostitute themselves, while also enabling them to retain their income.”
Never before has a Norwegian court heard a case involving a valued added tax bill for prostitution, and Elden has said he and his client won’t take it lying down.
“If the tax demand stands, we’ll report the state for pimping,” he told VG.
Elden said the hefty tax bill would essentially force his client to prostitute herself again to pay off the state paymaster.
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The head of the regional tax office’s anti-evasion unit, Jan Egil Kristiansen, said he was prohibited from commenting on individual cases.
“But all business activity is liable for tax and VAT. There’s no exception for prostitution,” he told VG.