The first question that foreign enterprises must consider, is whether their business is performed to Norway, or in fact in Norway. Only the latter trigger registration and reporting responsibilities. All entities must register with the Central Coordinating Register for Legal Entities in order to obtain a Norwegian organization number. If the activities are VAT liable, the entity must also register with the VAT Register.
VAT is an indirect tax on the consumption of goods and services. As a rule, VAT is calculated at all stages of the supply chain and on the import of goods and services from abroad. The final consumer, who is not registered for VAT, absorbs VAT as part of the purchase price. For businesses and organisations that are required to pay VAT in Norway, VAT is generally not an expense. As a business, you must pay VAT on your purchases, but you will usually be entitled to a deduction for the VAT.
The rules in Norway are different from the rules of the EU and other regions. The VAT regulation is detailed and quite complex. In the event of contravention of the VAT Act, a surtax may be imposed. In serious cases the surtax may be up to 40 %.
Magnus Legal’s core team comprises experienced lawyers within VAT. We are prepared to give you first class advice. Our lawyers focus on the practical implications for our clients of VAT legislation.
In many cases it is difficult to establish whether a foreign company must register for VAT in Norway. There are many important elements that could trigger registration obligations.
Your business is liable to register for VAT once domestic vatable sales of goods or services exceed NOK 50 000 within a 12-month period. Note that there is a difference between sales to Norway and sales in Norway.
In this article we have highlighted the most important issues you should consider:
VAT is payable on all sales of goods and services, except those that have been specifically exempted. Foreign businesses that start up business activities, liable to VAT in Norway, must calculate and pay VAT in the same way as Norwegian businesses.
Enterprises selling goods or services exceeding NOK 50,000 over a twelve-month period, are obliged to register for VAT in Norway and add VAT onto the invoices. On the other hand, a VAT registered entity is entitled to a refund of the input VAT on its own purchases of goods and services used in the business. The VAT is reported on VAT returns. These VAT returns are normally filed bi-monthly.
The VAT rates in Norway are set once a year. For 2022, the rates are as follows:
Foreign businesses selling goods and services in Norway without having a place of business or a place of residence in Norway must, as a main rule, be registered through a VAT representative.
However, this does not apply to businesses established in countries who have entered into an agreement with Norway on mutual recovery of VAT and tax claims. This applies to businesses in Belgium, Bulgaria, Denmark, Estonia, Finland, France, Greece, Ireland, Iceland, Italy, Croatia, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Czech Republic, Germany, Hungary and Austria.
The business will have the rights and obligations that follow from ordinary registration in the VAT Register. For businesses that need to register through a VAT representative, the representative must have a place of residence or a place of business in Norway. Both, the foreign business and the representative, must sign the Coordinated Registration Notification in order to have the business registered. The VAT representative is obliged to ensure that the VAT handling is correct and is responsible for filing the VAT return.
Magnus Legal acts as a VAT representative for foreign companies with VAT liable activity in Norway.
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Arrival of goods to the border must be notified the Norwegian Customs and declared on the customs declaration. Normally a forwarding agent will obtain customs clearance on your company’s behalf electronically and does not need to meet physically with the Customs office. If you choose to clear the goods yourself, you will need to submit the Single Administrative Document and meet physically.
It is possible to import goods on a temporary basis, in which separate handling of the declaration apply.
Note that some goods may be restricted or prohibited, and the exporting country may require an export permit for some types of goods.
VAT is levied on all goods and services unless exempt. The VAT rate is currently at 25% for all goods except foodstuffs which is 15%.
VAT is due and paid at the border for businesses that are not VAT registered in Norway. For VAT registered businesses, the VAT is deferred to the VAT return. In general, most goods are free of customs duties but apply to textiles and foodstuffs. Duties, taxes, charges or restrictions are based on the commodity code in the Customs Tariff.
Note that any duties and charges that may apply must be included in the transaction value in the VAT calculation.
From 1 April 2020 Norway implements the VAT on E-Commerce (VOEC) scheme. Foreign sellers and online marketplace will need to calculate and collect VAT on sales of goods with a value less than NOK 3 000.
The new scheme does not apply for suppliers with a registered business address or residence in Norway, if sales take place through an intermediary or for B2B-sales.
Small consignments are goods with a value below NOK 3000, exclusive of shipping and insurance costs. The threshold applies per item and not per invoice. All suppliers who register under the VOEC scheme will benefit from a simplified customs handling of the flow of goods.
Doing business in Norway triggers many obligations. VAT is one of them.
Here is a quick step by step look at how the VAT system in Norway works.