How do you navigate the rules and regulations of VAT on e-commerce in Norway? Fact is that sellers and online marketplaces are liable for VAT on cross-border sales of low value goods to consumers (B2C) in Norway. Let's take a look at what this means.
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 (buyer pays the VAT to the tax office).
This means that up until 1 April 2020, the obligation to pay VAT on all export sales of goods to Norway were placed with the Norwegian buyer. As of 1 April 2020, sellers and online marketplaces must calculate and collect VAT on sale of goods with a value below NOK 3 000.
Also read: Import to Norway – VAT and customs
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.
From 1 April 2020, foreign sellers and online marketplaces are liable to pay Norwegian VAT for B2C small consignments sales. The seller will collect Norwegian VAT at the point of sale instead of the consumer paying VAT at the point of importation.
The VOEC scheme does not apply for suppliers with a registered business address or residence in Norway or if sales take place through an intermediary. Suppliers with both B2B and B2C sales can be registered under the VOEC scheme, but only for the B2C-sales.
Small consignments are goods with a value below NOK 3 000, exclusive of shipping and insurance costs. The threshold applies per item and not per invoice. Sales of foodstuffs, alcohol and tobacco cannot be reported through VOEC. These goods will be subject to border collection of VAT, excise duties and customs duties.
All goods except the above mentioned will be VAT liable from the first transaction, but the obligation to register for VAT is not triggered before total sales exceed NOK 50 000. However, sellers may opt to register before.
All suppliers who register under the VOEC scheme will benefit from the simplified customs handling of the flow of goods.
Also read: Should your business register for VAT in Norway?
In the VOEC scheme, 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 VOEC 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 intermediary will be deemed as the supplier for VAT purposes, not the supplier.
Also read: VAT for foreign businesses operating in Norway: 7 frequently asked questions
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.
Once registered, the supplier must follow these steps:
Provided the items sold each has a value below NOK 3 000, you will need to charge the applicable VAT rate. Note that shipping and insurance costs – if applicable – are to be included in the VAT calculation, but not when determining whether the sale is within the threshold.
Sales made in another currency than NOK must be converted at the point of sale to determine whether the value is within the threshold.
The consignment must be marked with the VOEC identification number assigned to your business when registering. Further, the contents, including value, description and quantity of goods must accompany the shipment.
Take steps to ensure proper identification. If the shipment cannot be clearly identified under the VOECC scheme, there is a risk of delayed clearing and double taxation. Make sure the transporter or forwarder are aware of the requirements.
VAT is reported and paid quarterly for each quarter beginning on 1 January, 1 April, 1 July and 1 October. The VAT reports and payment must be made 20 days after end of each quarter.
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.
Also read: 6 tips for businesses: How to get a VAT refund in Norway
The supplier must submit a VAT return stating its identification number, the calculation basis and the calculated VAT converted 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 for more information about: VAT in Norway
Article first published October 2019, latest update October 2021.