Oslo
EY
Street address:
Mail address: Stortovet 7
N-0155 Oslo Norway
P.O. Box 1156 Sentrum
N-0107 Oslo
Norway
Indirect tax contacts
Øystein Arff Gulseth +47 982-06-387
oystein.arff.gulseth@no.ey.com
Agnete Haugerud +47 982-06-318
agnete.haugerud@no.ey.com
Cecilie Dyrnes +47 982-94-516 cecilie.dyrnes@no.ey.com
A. At a glance
Name of the tax
Value-added tax (VAT)
Local name Merverdiavgift (MVA)
Date introduced 1 January 1970
Trading bloc membership European Free Trade Association (EFTA)
Administered by Ministry of Finance (http://www.skatteetaten.no)
VAT rates
Standard
25%
Reduced 15%, 12%
Other
VAT number format
VAT return periods
Thresholds
Registration
Zero-rated (0%) and exempt without credit
123 456 789 MVA
Bimonthly (with the possibility for shorter periods)
Annual (for farmers and fishermen; optional for other businesses if taxable turnover does not exceed NOK 1 million)
NOK50,000 (approx. EUR4,250) for all taxable persons, aside from charitable and nonprofit organizations, which is NOK140,000 (approx. EUR11,875)
Established NOK 50,000 (approx. EUR4,250)
Non-established NOK 50,000 (approx. EUR4,250)
Distance selling NOK 50,000 (approx. EUR4,250)
Intra-Community acquisitions
Electronically supplied services
Not applicable
NOK50,000 (approx. EUR4,250)
Recovery of VAT by non-established businesses Yes, subject to certain conditions
B. Scope of the tax
VAT applies to the following transactions:
• The supply of goods or services made in Norway by a taxable person
• Withdrawals of goods from a registered enterprise or an enterprise with a registration obligation for use outside the scope of the VAT Act and withdrawals of services from a registered enterprise or an enterprise with a registration obligation for private use or for purposes not regarding the enterprise
• Purchase of intangible or remote supply services from abroad by a Norwegian taxable person or public body
• The importation of goods, regardless of the status of the importer
The application of delivery terms affects the deemed place of supply of goods. The supply of services in Norway related to goods or real property is deemed to be liable to VAT in Norway.
Effective use and enjoyment. In Norway, no services are subject to the “use and enjoyment” provisions.
Transfer of a going concern. According to the Norwegian VAT Act § 6-14, the supply of goods and services as part of a transfer of an ongoing business is exempt from VAT (zero-rated). It is an absolute requirement that the ongoing business is continued by the new owner. In addition, the following elements are relevant: the transfer of employees, inventory and fixed assets, etc. Normally, the transfer of one single asset does not qualify for an exemption. The exemption applies only if the new owner continues the business for a certain period subsequent to the transfer. It is not a requirement that the business has its own personnel, HR department, etc.; it is sufficient that the business is capable of operating in a market regardless of whether the business is operated by its own personnel or by outsourcing of operational tasks.
Transactions between related parties. There is no difference between supplies of goods and services for transactions between related parties. If a commonality of interest exists between the supplier and the recipient of goods or services and it must be assumed that this could result in a different consideration being set than would be the case if such commonality of interest did not exist, the basis of calculation may not be set lower than the market value.
C. Who is liable
A taxable person is any business entity or individual that makes taxable supplies of goods or services in Norway, in the course of a business.
The VAT registration threshold is NOK50,000 (approx. EUR4,250) during a 12-month period. However, for charitable bodies and some nonprofit organizations, the threshold is NOK140,000 (approx. EUR11,875). Special rules also apply to certain partnerships, trading companies and corporations.
The one that is acting as the importer of records (recipient of goods) in the customs declaration is liable to pay import VAT.
Exemption from registration. Nonresident foreign transporters that supply only international, zero-rated transportation services may choose between registering for VAT and thereafter applying for deduction of input tax through their VAT returns or remaining not registered and applying for VAT refunds through the refund regime.
Voluntary registration and small businesses. Norwegian VAT legislation provides an option for voluntary registration for VAT purposes for certain activities. For example, voluntary registration is available for leasing property for use by a taxable business.
There are no special VAT registration rules for small businesses in Norway. Normal VAT registration rules apply.
collection of VAT (import VAT), excise duties and customs duties. Carriers might also charge the consumer an additional fee for calculating and paying the duties.
The NOK3,000 threshold of the VOEC scheme applies per item – not per invoice or transaction. The value of the item at “point of sale” is decisive. Additional costs and fees – e.g., shipping and insurance costs – are excluded when determining if the sale is within the NOK3,000 threshold (but to be included when calculating the VAT).
The consignments to Norwegian consumers should be marked with a VOEC identification number and relevant information to ensure correct customs clearance.
There are no other special rules in Norway for e-commerce supplies.
Online marketplaces and platforms. If electronic services are supplied through a mediator (i.e., an online marketplace or platform), the supplier is considered to sell services to the intermediary and the intermediary, in turn, is considered to transfer services to the buyer (two transactions).
The difference between the supplier and the intermediary is based on an overall assessment of whether “the delivery takes place through the use of an intermediary.” It is not decisive whether underlying agreements between the parties classify the relationship as involving a subcontractor, intermediary, agent or commissioner, etc. as to who is contractually responsible for the content of the service is not necessarily decisive when assessing who must be registered. When deciding who the supplier is pursuant to the VAT Act, the most important factor is who is responsible for the actual delivery, i.e., who is responsible for transferring the files to the end user or gives the end user access to the digital content. Who collects payment from the recipient must also be taken into consideration. This provision means that those who sell electronic services through an intermediary cannot themselves be registered, pursuant to section 2-1 third paragraph.
Vouchers. In Norway, a distinction is made between “single-purpose voucher” (SPV) and “multipurpose voucher” (MPV). SPV is a coupon where the place of delivery and tax amount for the underlying goods or services are known at the time of issue. In such cases, the goods or services in question shall be considered delivered when the coupon is issued, and VAT will be calculated on the goods or services. If the coupon does not turn out to be redeemed, it will not affect the tax treatment. MPV includes coupons that are not SPVs. For such vouchers, the underlying goods or services are not considered to have been delivered at the time of issue, and no value-added tax shall be calculated on the underlying product.
Registration procedures. The taxable person must be registered in the Central Coordinating Register for Legal Entities before moving forward with the VAT registration. The Coordinated Register Notification Part 1 is a common form for registration in the Central Coordinating Register of Norway.
The tax authorities have launched a new service that will simplify the registration process in the VAT register, replacing the previous form Coordinated Register Notification Part 2.
Every enterprise registered in the Central Coordinating Register will be given a unique nine-digit organization number. This number is used as a means of identification for the entities by most official registers containing business related information, such as the Register of Employers, the VAT register, etc. The taxable person, its accountant, auditor or advisor are entitled to apply for registration. It is preferable to register the business online.
Enterprises that do not have a place of business or domicile in Norway and are not obliged to be registered with a representative will normally not have any administrative employees with the Norwegian National Identity Number that gives them access to the existing administrative digital portal Altinn. If that is the case, the registration form (Coordinated Register Notification Part 1) could be submitted on paper.
Sales documentation for certain services, such as passenger transportation or leases, may be issued in advance.
Deposits and prepayments. There are no special time of supply rules in Norway for deposits and prepayments. As such, the general time of supply rules apply (as outlined above).
Continuous supplies of services. Deliveries, regardless of whether they are goods or services, may be invoiced up to the 15th working day of the month following the month of delivery. Services delivered on a recurring basis, and goods delivered in connection therewith, must be invoiced no later than one month after the end of the ordinary VAT period.
Goods sent on approval for sale or return. The VAT must be charged when the goods are delivered. If the goods are returned to the seller, a credit-note should be issued by the seller.
Reverse-charge services. VAT payable through the reverse-charge mechanism is due on the date of the invoice if the invoice is issued in accordance with the generally accepted accounting principles in the country of the service provider.
Leased assets. Leased assets, regardless of the type of lease, are to be invoiced on a regular basis, at the latest one month exceeding the VAT period. The tax point for supplies of leased assets is usually the invoice date.
Imported goods. The time of supply for imported goods is the official date of importation.
F. Recovery of VAT by taxable persons
A taxable person may recover VAT, which is charged on goods and services supplied to it for taxable business purposes. A taxable person generally recovers input tax by deducting it from output tax, which is VAT charged on supplies made.
Input tax includes VAT charged on goods and services supplied in Norway, VAT paid on imports of goods and VAT self-assessed for reverse-charge services received from outside Norway.
The amount of the VAT reclaimed must be detailed on a valid VAT invoice. Consequently, VAT may not be deducted as input tax before a VAT invoice is received. Input tax that is not properly documented may not be deducted. The input tax deduction must be reported in the VAT period in which the invoice is dated.
A deduction of input tax may be granted only if the payment is made through a bank or similar financial institution, unless the total payment is less than NOK10,000 (approx. EUR850).
The time limit for a taxable person to reclaim input tax in Norway is three years.
Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not for use in a business that is subject to VAT (for example, goods acquired for private use). In addition, input tax may not be recovered for some items of business expenditure.
Examples of items for which input tax is nondeductible
• Tobacco and alcohol
• Personal expenses
• Business entertainment
• Restaurant meals
• Purchase and maintenance of passenger vehicles, with certain exemptions for taxi and car-lease companies
• Gifts and handouts for advertising purposes if the value is at least NOK200 (approx. EUR17). inclusive of VAT
• Advertising
Examples of items for which input tax is deductible (if related to a taxable business use)
• Purchase, lease and hire of vans and trucks not for private use
• Fuel for vans and trucks not for private use
• Conferences
• Business use of home telephones and mobile telephones
• Passenger transportation services that are not for private use
Partial exemption. Input tax directly related to making exempt supplies is generally not recoverable. If a Norwegian taxable person makes both exempt supplies and taxable supplies, it may not deduct input tax in full. This situation is referred to as “partial exemption.” Zero-rated supplies are treated as taxable supplies for these purposes.
Input tax incurred on purchases that are used for both taxable and exempt supplies must be apportioned to reflect the supplies that carry the right to deduction and those that do not carry such right. The apportionment may also be calculated based on the ratio of taxable supplies to exempt supplies in the preceding financial year if the preceding financial year is representative of the normal pattern of trading.
Approval from the tax authorities is not required to use the partial exemption standard method or special methods in Norway. Special methods are allowed in Norway. However, taxable persons must document the applied calculation method and present it in case of an audit by the tax authorities.
Capital goods. Capital goods are those assets that are procured with a certain value and duration in a business. In Norway capital goods are the following:
• Machinery, inventory and other fixed assets where the value of input tax of the capital good is higher than NOK50,000 (approx. EUR4,250) Or
• Real estate that has been subject of new, extension or redevelopment where input tax amounts to NOK100,000 (approx. EUR8,500) or higher
Input tax incurred on the capital goods is deducted when the capital goods are acquired. However, the amount of input tax on capital goods depends on the use of the capital good in a 10-year period for real estate and 5-year period for other capital goods. The use of the capital good must therefore be assessed each year in the adjustment period. The initial deducted input tax is adjusted if the use of the capital good changes from VAT deductible to nondeductible purposes (or vice versa).
In Norway, the capital goods adjustment does not apply to any services. Refunds. If the amount of VAT recoverable in a bimonthly period exceeds the amount of output tax payable in that period, the taxable person has an input tax credit. A refund claim is triggered automatically if the VAT return shows a VAT credit. Refunds are generally processed within three weeks after the date on which the VAT authorities receive the VAT return. The VAT authorities pay interest on refunds that are paid late. As of 1 July 2023, the annual interest rate is 11.75%.
Pre-registration costs. A VAT-registered entity is entitled to deduct input tax on goods and services that were procured up to three years prior to registration in the VAT register (retrospective tax settlement), provided that the procurements are directly related to the taxable activity. The retrospective tax settlement must be claimed no later than three years after registration. Special limitation rules apply for retrospective tax settlement related to “capital goods.”
Records. Compulsory record reporting must be kept as long as there is a need to check the reporting material. Storage should be in a format that maintains the ability to read the material. Further, the material must be adequately secured against unjustified change, deletion or loss.
In Norway, examples of what records must be held for VAT purposes includes primary documentation and secondary documentation. Primary documentation is used as a basis for the actual bookkeeping process, e.g., incoming and outgoing invoices, cash book balances, bank vouchers, salary slips, specification of mandatory financial reporting. Secondary documentation is often additional documentation with important information, which does not directly lead to any transactions in the accounts. Examples of secondary documentation include sales agreements, order slips and other agreements of importance for the enterprise.
In Norway, VAT books and records can be held outside the country. Generally, it is up to the entity itself to decide where the ongoing accounting is carried out, if the retention requirements are met. As a main rule, records must be stored in Norway under the whole retention period. However, entities that conduct operations abroad may keep records related to this activity in that country if they are obligated to do so by the law of the country where the operations are conducted. The accounting material must be available for auditing by the tax authorities in Norway without any delay throughout the retention period. It is allowed to store the electronic accounting material in the Nordic countries, provided notification is made to the Directorate of Taxes. No application is required. However, for storage in other countries, an application is required. No specific guidelines have been given for the determination whether the storage in other countries will be permissible in any given case.
Record retention period. The main rule states that primary documentation must be kept for five years after the end of the fiscal year. Secondary documentation must be kept for three years and six months after the fiscal year ending period. There are several exceptions from these rules. One important exception is the expanded documentation rules for capital goods that are subject to VAT adjustments, where specific documentation must be kept up to 15 years from the end of the financial year of procurement. Import documents must be kept for 10 years.
Electronic archiving. Electronic archiving is allowed in Norway. Documentation that is necessary for the preparation of compulsory financial reporting and compulsory specifications, which is available electronically, must stay accessible as such for at least three and a half years after the end of the financial year. Entities with less than NOK5 million in turnover (excluding VAT) are excluded. Entities that are in the process of liquidations must keep their documentation for six months after the liquidation is completed.
I. Returns and payment
Periodic returns. In general, Norwegian taxable persons file bimonthly VAT returns. However, farmers and fishermen must file returns annually. Businesses with taxable turnover of less than NOK1 million may opt to file annual returns. VAT groups submit a single, joint VAT return bimonthly. Import VAT is also reported via the VAT return.
To ease cash flow, businesses that receive regular VAT refunds may request shorter VAT return periods. Taxable persons must contact the appropriate VAT office to register for annual returns or for permission to use shorter VAT return periods.
For bimonthly VAT returns, this must be reported within 1 month and 10 days after the end of the VAT period.
Periodic payments. For bimonthly VAT returns, the VAT due for each period must be paid in full within 1 month and 10 days after the end of the VAT period. For bimonthly reported VAT, this means that the first term of the VAT report (January and February) is reported 10 April, etc. Return liabilities must be paid in Norwegian kroner (NOK). The payment must be made to the
tax authority’s bank account by the due date of the submitted VAT return. All payments of VAT due must be made by bank transfer.
Electronic filing. Electronic filing is mandatory in Norway for all taxable persons. It is obligatory to report VAT returns electronically. The opportunity to apply for an exemption for VAT returns by paper has been discontinued. The electronic VAT return form is filed via Altinn portal (https:// www.altinn.no/en/forms-overview/tax-administration/value-added-tax-vat-return-general-industry-/).
Once the VAT return is submitted, the payment information will be provided in the Altinn portal, i.e., account number and KID (client identification number).
A new VAT return was introduced as of 2022. The new VAT return is based on standard Norwegian SAF-T VAT codes. The VAT return can either be submitted digitally (“system-to-system” via API technology) or manually via the Norwegian tax authority’s portal.
Payments on account. Payments on account are not required in Norway.
Special schemes. Recipients of remote services. Recipients of remote services who are not registered for VAT in Norway are obliged to report reverse-charge VAT through the government web portal (www.altinn.no) on a separate VAT return for non-registered entities (Form RF-0005). The return is submitted quarterly, and payments are done 1 month and 10 days after the end of the VAT period. The threshold is for purchases exceeding NOK2,000 (approx. EUR170) excluding VAT, per quarter year. The buyer must be a public sector enterprise or business that operates in or is affiliated to Norway. This also applies to foreign enterprises or businesses.
Secondhand goods. Where secondhand goods, works of art, collectors’ items or antiques are purchased for resale, including supplies on commission or at auction, the basis of calculation for the resale may be set as the difference between the purchase price and the sales price for the individual items. The goods must be purchased from a seller who does not charge VAT on the sale or who does not specify VAT in the sales document.
If purchases or resales are combined and the prices of the individual items are not known, the basis of calculation of the resale shall be the difference between the purchase price and the combined sales price of the items for the whole VAT period. If such purchases or sales amount to more than 80% of the purchases or sales made during the VAT period, the gross profit on other secondhand goods, etc., for which the sales price exceeds the purchase price may also be calculated as a whole and per VAT period. If, in each VAT period, the value of the purchases exceeds that of the sales, the difference may be included in the total value of the purchases in subsequent VAT periods.
Annual returns. Annual returns are not required in Norway.
Supplementary filings. No supplementary filings are required in Norway. It has been proposed to implement a VAT listings filing (sales and purchase notification) from 2024. In the National Budget for 2023, the Ministry of Finance expressed that no VAT listings will be introduced in the near future. At the time of preparing this chapter, no further developments have been announced. For more details, see the subsection Digital tax administration below.
Correcting errors in previous returns. In general, amounts reported incorrectly should be corrected by filing either a corrected (replaces the previous return) or supplementary return for the same period the mistake was made. Errors and omissions in former VAT returns may be corrected by the taxable person on its own initiative within three years without risk of penalty tax being imposed.
Digital tax administration. Standard Audit File for Tax (SAF-T). SAF-T is mandatory in Norway. All entities with a bookkeeping obligation in Norway are required to submit accounting data