Sellers and online marketplaces will be liable for VAT on cross-border sales of low value goods to final consumers in Norway from 2020.
Current VAT rules in Norway
All businesses with activities in Norway must register for VAT when VAT liable turnover exceeds NOK 50 000 during a 12-month period.
The VAT handling of cross-border sales of goods and services follow the destination principle, and imports to Norway are in principle VAT liable through border collection or the reverse charge mechanism.
This does however not apply for low value goods, which are goods with a value of up to NOK 350, all costs included. Cross-border sales of goods with a value below this amount are exempted from VAT.
Also read: Import to Norway – VAT and customs
Removal of the low value threshold
Norway has already implemented the VOES-scheme (VAT on Electronic Services), where a simplified registration and reporting system is made available for foreign businesses supplying electronic services to consumers. VOES shares similarities to the EU MOSS scheme.
With the new proposal, foreign sellers and – more importantly – electronic interfaces will be liable to pay Norwegian VAT for B2C small consignments sales. The new scheme is abbreviated VOSC: VAT on Small Consignments. The seller will collect Norwegian VAT at the point of sale instead of the consumer paying VAT at the point of importation.
Small consignments are according to the proposal goods with a value up to NOK 3 000, exclusive of shipping and insurance costs. Sales of foodstuffs, alcohol and tobacco cannot be reported through the VOSC-scheme. All goods except the abovementioned will be VAT liable from the first transaction, but customs duties will not apply up to a value of NOK 3 000 per shipment. Note that the above-mentioned NOK 50 000 threshold for VAT registration applies for this scheme as well, but suppliers may opt to register before.
All suppliers who register under the VOSC scheme will benefit from the simplified customs handling of the flow of goods.
Intermediaries may be liable to register
The proposal states that the intermediary is the “deemed supplier” if the supply of goods is facilitated through an intermediary.
This means that online marketplaces will be liable to register through the VOSC scheme when facilitating the distance sales of imported goods with an electronic interface. The deemed supplier provision will be mandatory, meaning the supplier and intermediary cannot choose who shall be VAT liable.
The VOSC Reporting System
Registration, reporting and payment is done online through a site operated by the tax office. VAT is declared and paid quarterly, following the same deadlines at the VOES system. The documentation requirements are kept at a minimum, where the supplier must keep a list of transactions that concerns the B2C sale of low value goods. The list of transactions must be retained for five years.
Refund of incurred VAT costs
Suppliers registered through the VOSC scheme are not entitled to direct VAT deductions. However, should the supplier have incurred VAT costs from Norwegian suppliers a general refund scheme is available.
How we can assist
The full details on how the new scheme will be implemented are at the time of writing not clear. Based on the proposal it is likely the above mentioned VOES scheme (electronic services) will be extended to low value goods as well. In this case, registering for and reporting VAT is fairly simple.
The supplier must submit a VAT return stating its identification number, the calculation basis and the calculated VAT translated into NOK quarterly. In order to register you will need access to the online portal Altinn.no.
We can offer assistance every step on the way in the registration and reporting process.
Also, se our website: VAT in Norway