Foreign enterprises that direct their business towards the Norwegian market will at some point face Norwegian VAT regulations and must know how to act. Learning the basics of Norwegian VAT regulations enables you to get the VAT deductions you are entitled to and can also help you to avoid 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 our business register for VAT?
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. Export sales of goods and service to Norway will not trigger a liability to register for VAT. However, if your business is directed to the Norwegian market, such as websites tailored in Norwegian and targeting Norwegian customers, payments are made to a Norwegian bank account etc, there is a risk your business will be deemed VAT liable in Norway.
Services such as health services, teaching services and cultural services are exempt from VAT. If your business provides these services, you are not liable to register for and calculate VAT. On the other hand, you will not be entitled to deductions for input VAT.
Find out more: Should your business register for VAT in Norway?
2. How do we register?
Registering for VAT is a two-step process. Firstly, you will need to register your business with the Central Coordinating Register of Legal Entities (CCRLE). From this registration you will obtain an business registration number 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 you have obtained the business registration number, you may start to sell and goods and services in Norway. From this point forward, you must remember to issue invoices using the Norwegian organization number.
Secondly, when your turnover exceeds NOK 50 000, you will need to register for VAT. The VAT registration can be done online or by paper by filling out the Coordinated Register Notification – Part 2. You will need to attach copies of invoices documenting that the NOK 50 000 threshold is exceeded.
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 reduced from 12 % to 6 % for passenger transport, letting of rooms by hotels or camping businesses etc., and commercial letting of holiday homes in the period from 01.04.2020 to 30.06.2021 due to covid 19.
There are some zero-rated goods and services as well, 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 do we report and pay VAT?
VAT is 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 you have accrued input VAT higher than output VAT, this is normally transferred from the tax office within three weeks after the VAT report is filed.
VAT reports can only be filed online.
6. What kind of deductions can we get?
Input VAT accrued for use in the VAT liable business is deductible. If your business provides both vatable and exempt services, only 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 we are not VAT registered, how do we get Norwegian VAT back?
If your business has incurred costs in Norway but does not meet the criteria for registering for VAT, you may apply for a VAT 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 your 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.
Article first published 11 June 2019. Updated 13 january 2021.