Foreign enterprises that direct their business towards the Norwegian market will at some point face Norwegian VAT regulations and must know how to deal with these. Learning the basics of Norwegian VAT regulations enables you to get the VAT deductions the enterprise is entitled to and can also help you to dodge expensive mistakes.
Learn from others who have been in the same situation. These are some of the most frequently asked questions foreign businesses raise:
1. Should the enterprise register for VAT?
A foreign enterprise is liable to register for VAT once domestic VAT-able 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. Export sales of goods and service to Norway will not trigger a liability to register for VAT. However, if the enterprise is directed to the Norwegian market, such as websites tailored in Norwegian and targeting Norwegian customers, there are certain delivery terms, payments are made to a Norwegian bank account etc, there is a risk that the enterprise will be deemed VAT liable in Norway.
Find out more: Should your business register for VAT in Norway?
2. How do we register?
Registering for VAT is a two-step process. First regist the register is required. From this registration a business registration number will be assigned, which is necessary for all communication and reporting with the various authorities, such as the tax office, the Labour Inspection Authority and the Labour and Welfare Administration.
Read more: Register a company in Norway
Once the business registration number is obtained, supplies of goods and services in Norway may start.
Once - turnover exceeds NOK 50 000,
Advance registration is both possible and very practical. With this option, VAT registration can be in place before customs clearance of the first shipment of goods, which eases the import process. For advance registration, there are certain documentation requirements. The Tax Authorities will need contract copies or other documents substantiating that the enterprise will have VAT liable business activities in Norway.
3. What are the VAT rates in Norway?
The standard VAT rate is 25 %. A reduced VAT rate of 15 % is levied on the sale of food.
The rate is 12 % for passenger transport, letting of rooms by hotels or camping businesses etc., and commercial letting of holiday homes.
There are also several zero-rated goods and services, such as export sales, certain sales related to the oil and gas industry, vessels and aircraft etc.
4. Is this invoice ok?
Invoices issued by a business registered in Norway, must be in accordance with the Norwegian Bookkeeping regulations. This means among other things that the invoice must …
…. be in one of the Scandinavian languages or in English
…. contain an invoice number and date
…. name both parties
…. describe the delivered goods/services
…. specify the time and place for delivery
…. state the compensation and due date
…. specify VAT in NOK
5. How is VAT paid and reported?
VAT is as a starting point reported bi-monthly. The deadline for each report is on the 10th,- one month after each period (10th of March for the period of January to February etc.), except for VAT term 3 which is due August 30) A fine will accrue for each late day until the report is submitted. VAT is due for payment the same day.”-
If an enterprise has accrued input VAT that exceeds the output VAT, the due amount is normally transferred from the tax office within three weeks after the VAT report is filed.
VAT reports can only be filed online, and reporting must be SAF-T compliant (support a standard format for exchange of accounting data).-
6. What kind of deductions are possible?
Input VAT accrued for use in the VAT liable business is deductible. If the enterprise provides both VAT liable and VAT exempt services, only the input VAT for use in the vatable business can be deducted. If input VAT is for use in both vatable and exempt services, input VAT must be deducted proportionately.
Some VAT costs cannot be deducted at all, even if they are used in the VAT liable business. This includes for example:
- hiring of function rooms in connection with catering
- food, boarding and similar kinds of remunerations to an enterprise’s owner, management, or employees
- property rental to cover a housing or welfare need
- procurement, operation, or maintenance of passenger vehicles
7. If an enterprise should not be and is not VAT registered, is it possible to get a refund of Norwegian VAT?
If an enterprise has incurred costs in Norway but does not meet the criteria for registering for VAT, the enterprise may apply for aVAT refund.
The following general conditions must be met to be entitled to receive VAT refund through the refund scheme:
- No taxable turnover in Norway during the past 12 months
- The goods/services must be for use within the business
- Turnover outside Norway would have entailed a registration obligation if the turnover had occurred in Norway
- The VAT would have been deductible had the business been registered in Norway
The application deadline for the previous calendar year is September 30th.
These are some of the questions we regularly face from foreign enterprises. Seeking assistance about VAT regulations in Norway can save both time and money for business and can help avoiding unpleasant discussions with the tax authorities.
Find out more about our services: VAT in Norway
We regularly assist foreign businesses with VAT and other compliance issues. Please get in touch if you are wondering if your business should VAT register or can apply for a VAT refund, or if you have other questions regarding Norwegian VAT.
You are welcome to contact us if you have any questions.
Article first published 11 June 2019. Updated 6 december 2022.