Norway VAT, GST, and Sales Tax Guide

Norway

Oslo GMT

EY Street address: Mail address: Dronning Eufemias gate 6 Oslo Atrium N-0151 Oslo P.O. Box 1156 Sentrum Norway N-0107 Oslo Norway

Indirect tax contacts

Per Oskar Tobiassen

+47 982-06-269 per.oskar.tobiassen@no.ey.com

Øystein Arff Gulseth +47 982-06-387 oystein.arff.gulseth@no.ey.com

Agnete Haugerud +47 982-06-318 agnete.haugerud@no.ey.com

Cecilie Dyrnes +47 982 94 516 cecilie.dyrnes@no.ey.com

A. At a glance

Name of the tax

Value-added tax (VAT)

Local name Merverdiavgift (MVA)

Date introduced 1 January 1970

Trading bloc membership European Free Trade Association (EFTA)

Administered by Ministry of Finance (http://www.skatteetaten.no)

VAT rates

Standard

25%

Reduced 6%, 12%

Other

Zero-rated (0%) and exempt without credit

VAT number format 123 456 789 MVA

VAT return periods

Thresholds

Registration

Established

Bimonthly (with the possibility for shorter periods)

Annual (for farmers and fishermen; optional for other businesses if taxable turnover does not exceed NOK1 million)

NOK50,000 (approx. EUR4,500) for all taxable persons, aside from charitable and nonprofit organizations (which is NOK140,000 (approx. EUR12,800))

NOK 50,000 (approx. EUR4,500)

Non-established NOK 50,000 (approx. EUR4,500)

Distance selling NOK 50,000 (approx. EUR4,500)

Intra-Community acquisitions

N/A

Electronically supplied services NOK5,000 (EUR4,500)

Recovery of VAT by non-established businesses Yes

B. Scope of the tax

VAT applies to the following transactions:

• The supply of goods or services made in Norway by a taxable person

• Withdrawals of goods from a registered enterprise or an enterprise with a registration obligation for use outside the scope of the VAT Act and withdrawals of services from a registered enter prise or an enterprise with a registration obligation for private use or for purposes not regarding the enterprise

• Purchase of intangible or remote supply services from abroad by a Norwegian taxable person or public body

• The importation of goods, regardless of the status of the importer

The application of delivery terms affects the deemed place of supply of goods. The supply of services in Norway related to goods or real property is deemed to be liable to VAT in Norway.

Effective use and enjoyment. In Norway, no services are subject to the “use and enjoyment” provisions.

Transfer of a going concern. According to the Norwegian VAT Act § 6-14, the supply of goods and services as part of a transfer of an ongoing business is exempt from VAT (zero-rated). It is an absolute requirement that the ongoing business is continued by the new owner. In addition, the following elements are relevant: the transfer of employees, inventory and fixed assets, etc. Normally, the transfer of one single asset does not qualify for an exemption. The exemption applies only if the new owner continues the business for a certain period subsequent to the trans fer. It is not a requirement that the business has its own personnel, HR department, etc.; it is sufficient that the business is capable of operating in a market regardless of whether the business is operated by its own personnel or by outsourcing of operational tasks.

C. Who is liable

A taxable person is any business entity or individual that makes taxable supplies of goods or services in Norway, in the course of a business.

The VAT registration threshold is NOK50,000 (approx. EUR4,500) during a 12-month period. However, for charitable bodies and some nonprofit organizations, the 12-month threshold is NOK140,000 (approx. EUR12,800). Special rules also apply to certain partnerships, trading com panies and corporations.

The one that is acting as the importer of records (recipient of goods) in the customs declaration is liable to pay import VAT.

Exemption from registration. Nonresident foreign transporters that supply only international, zero-rated transportation services may choose between registering for VAT and thereafter applying for deduction of input tax through their VAT returns or remaining not registered and applying for VAT refunds through the refund regime.

Voluntary registration and small businesses. Norwegian VAT legislation provides an option for voluntary registration for VAT purposes for certain activities. For example, voluntary registration is available for leasing property for use by a taxable business.

There are no special VAT registration rules for small businesses in Norway. Normal VAT registration rules apply.

Group registration. The Norwegian VAT Act provides that “collaborating companies” may form a VAT group. Group registration may apply if one or more companies own at least 85% of the capital in each company and if the companies are collaborating. Special issues arise for groups of companies with foreign presence.

To form a VAT group, an application should be made to the tax authorities.

Members of a VAT group are regarded as one taxable person liable to payment of VAT. All the participating companies are jointly and severally liable for the correct payment of VAT.

Transactions between companies within a VAT group are generally not subject to VAT. However, the withdrawal of taxable goods or services from a taxable part of the group’s business may be subject to VAT. There is no minimum time period required for the duration of a VAT group.

Holding companies. Holding companies can be included in a VAT group in Norway, provided that the 85% ownership requirement is met.

Cost-sharing exemption. The VAT cost-sharing exemption has not been implemented in Norway.

Fixed establishment. To have a fixed establishment in Norway, there must be a permanent estab lishment of a certain size, consisting of people and technical resources who together have the ability to deliver and receive services. The requirement for duration means that the temporary presence of persons and/or resources will not be sufficient. The presence of consultants, repair ers, installers, etc., who come on “visits” to Norway to carry out their assignments in the country is not enough to create a permanent establishment. As a starting point, it must be required that both the necessary persons and the resources are present as an independent collaboration (“together”). The presence of only the “resources” is not normally sufficient. For example, the rental of goods, where all storage, delivery, service, etc., is handled by third parties, is not enough for there to be a permanent place of business. On the other hand, the criterion relates only to the persons and resources necessary to carry out and receive deliveries. The fact that administrative support functions are “outsourced” to third parties will not, for example, affect the status of a permanent establishment.

The criterion for “permanent establishment” must not be taken too literally, and the question of whether there is a permanent establishment will, after all, depend on a specific overall assess ment on a case-by-case basis. The key question is whether it appears to be rational and natural to define the establishment in question as a supplier or recipient place for taxable deliveries. In the Directorate’s view, the criteria cannot normally be interpreted to mean that all the necessary resources and persons must be permanently present. For example, it may be acceptable that some of the overseas personnel “commute” to and from abroad without this depriving the establish ment in Norway of the character of a permanent establishment if there are other key people permanently present and the company otherwise has the necessary technical resources to be a fixed establishment.

Non-established businesses. A “non-established business” is a business that has no fixed estab lishment in Norway. A non-established business must register for VAT if it makes taxable sup plies of goods or services in Norway in excess of the registration threshold. Nonresident foreign transporters that supply only international, zero-rated transportation services may choose between registering for VAT and apply for refunds of input tax on VAT returns or remain unregistered and apply for VAT refunds through the refund scheme.

Tax representatives. If a non-established business is required to register for VAT in Norway, it must appoint a resident tax representative, unless it maintains a place of business or a registered office in Norway. The requirement to have a local representative has been abolished for Norwegian-registered foreign enterprises (NUF) domiciled in a European Economic Area (EEA) country that has an assistance agreement with Norway for the collection of VAT. This applies to enterprises domiciled in Austria, Belgium, Bulgaria, Czech Republic, Croatia, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom, Faroe Islands and Greenland.

Reverse charge. The reverse-charge mechanism in Norway applies when an entity purchases services that are capable of delivery in Norway from a remote location. Examples include elec tronically provided services, consultancy, etc. The entity that purchases the service has an obliga tion to calculate and pay the VAT in Norway.

Domestic reverse charge. Climate credits. The domestic reverse charge must be calculated by the buyer of climate credits. Examples of climate credits can be carbon credits. Businesses or public companies that are not subject to the VAT regulations must also calculate VAT on the purchase of climate credits. However, this obligation only arises if the total purchase in a term exceeds NOK2,000 (EUR182) excluding VAT.

Gold. The domestic reverse charge must be calculated by the buyer of gold with a purity of at least 325 thousandths (of gold in an alloy). Examples of gold can be gold bars, gold dust, etc. The reverse-charge duty does not apply to the sale of gold where the price is based on function, design, etc., and not fineness and weight. Examples can be watches, etc.

Digital economy. VAT on e-commerce and electronic services. There is a special scheme in Norway for e-commerce and electronic services (known as the VAT on E-Commerce and Electronic Services (VOEC)). Nonresidents who supply electronic services to final consumers in Norway (B2C supplies) are required to register for VAT and charge VAT on services supplied to Norwegian consumers. For these purposes, electronic services include the supply of, for exam ple, e-books, films, music and software. A form of foreign VAT registration, which is intended to be less burdensome in terms of administration, is available for overseas companies, which are required to register for VAT. As an alternative to the use of a fiscal representative, simplified registration and reporting arrangements based on the EU system (One-Stop-Scheme) have been established (i.e., the VOEC).

Registration under the simplified scheme is also allowed before the threshold of NOK50,000 is met. For companies that are registered for the simplified VAT scheme, an obligatory quarterly declaration must be submitted stating the company’s identification number, total revenue and 25% VAT (currency NOK).

The government announced that from 1 July 2021 the limited VAT accountability for nonresident suppliers was abolished under the VOEC scheme.

From 1 April 2020, foreign suppliers (businesses and marketplaces) of low-value goods, goods with value below NOK3,000, to consumers in Norway must calculate and collect VAT on their business-to-consumer (B2C) sales to Norway.

The suppliers may either register for VAT in Norway through the VAT register or through the simplified scheme. The simplified scheme has fewer administrative burdens than the VAT regis ter does.

For goods with value at or above NOK3,000, foodstuffs, restricted goods and goods subject to excise duties, the simplified scheme (VOEC) is not available. These goods are subject to border collection of VAT (import VAT), excise duties and customs duties. Carriers might also charge the consumer an additional fee for calculating and paying the duties.

The NOK3,000 threshold of the VOEC scheme applies per item – not per invoice or transaction. The value of the item at “point of sale” is decisive. Additional costs and fees – e.g., shipping and insurance costs – are excluded when determining if the sale is within the NOK3,000 threshold (but to be included when calculating the VAT).

The consignments to Norwegian consumers should be marked with a VOEC identification num ber and relevant information to ensure correct customs clearance.

There are no other special rules in Norway for e-commerce supplies.

Online marketplaces and platforms. If electronic services are supplied through a mediator (i.e., an online marketplace or platform), the supplier is considered to sell services to the intermediary and the intermediary, in turn, is considered to transfer services to the buyer (two transactions).

The difference between the supplier and the intermediary is based on an overall assessment of whether “the delivery takes place through the use of an intermediary.” It is not decisive whether underlying agreements between the parties classify the relationship as involving a subcontractor, intermediary, agent or commissioner, etc. Who is contractually responsible for the content of the service is not necessarily decisive when assessing who must be registered. When deciding who the supplier is pursuant to the VAT Act, the most important factor is who is responsible for the actual delivery, i.e., who is responsible for transferring the files to the end user or gives the end user access to the digital content. Who collects payment from the recipient must also be taken into consideration. This provision means that those who sell electronic services through an inter mediary cannot themselves be registered, pursuant to section 2-1 third paragraph.

Vouchers. In Norway, a distinction is made between “single-purpose voucher” (SPV) and “mul tipurpose voucher” (MPV). SPV is a coupon where the place of delivery and tax amount for the underlying goods or services are known at the time of issue. In such cases, the goods or services in question shall be considered delivered when the coupon is issued, and VAT will be calculated on the goods or services. If the coupon does not turn out to be redeemed, it will not affect the tax treatment. MPV includes coupons that are not SPVs. For such vouchers, the underlying goods or services are not considered to have been delivered at the time of issue, and no value-added tax shall be calculated on the underlying product.

Registration procedures. The taxable person must be registered in the Central Coordinating Register for Legal Entities before moving forward with the VAT registration. The Coordinated Register Notification Part 1 is a common form for registration in the Central Coordinating Register of Norway.

The tax authorities have launched a new service that will simplify the registration process in the VAT register, replacing the previous form Coordinated Register Notification Part 2.

Every enterprise registered in the Central Coordinating Register will be given a unique nine-digit organization number. This number is used as a means of identification for the entities by most official registers containing business related information, such as the Register of Employers, the VAT register, etc. The taxable person, its accountant, auditor or advisor are entitled to apply for registration. It is preferable to register the business online.

Enterprises that do not have a place of business or domicile in Norway and are not obliged to be registered with a representative will normally not have any administrative employees with the Norwegian National Identity Number that gives them access to the existing administrative digital portal Altinn. If that is the case, the registration form (Coordinated Register Notification Part 1) could be submitted on paper.

As of 1 January 2021 the new digital portal for VAT registration has been implemented. The new portal provides an online digital process for businesses to apply for an ordinary VAT registration, VAT group registration, voluntary VAT registration for the letting of real property, pre-registra tion and registration via fiscal representative.

The VAT registration will normally be completed the same day as the application is submitted via the portal.

To register the business in the Central Coordinating Register for Legal the company will nor mally have to send in/register the following documents/information together with the application: • Certificate from the company register in the business’s country of origin in original or a copy certified by public authority, attorney at law, associate attorney at law or auditor. The certificate

must be in English or a Scandinavian language or translated to Norwegian or English by a legal authorized translator.

• For the person(s) who can sign on behalf of the company, according to the company certificate, the following details are needed: copy of passport or other identification document issued by public authority, which also must be certified; address and telephone number of the business.

• What kind of goods and/or services will be sold, and which date the sale will start in Norway.

Deregistration. Different rules apply to deregistration and closures of different types of entities and enterprises, but all deregistrations and closures must be notified using the Coordinated Register Notification Part 1 form. If VAT liable turnover falls under NOK50,000, without the business being deleted, the taxable person remains registered in the Norwegian VAT register for two years.

Changes to VAT registration details. Changes to a taxable person’s VAT registration details may be submitted through the ordinary Coordinated Register Notification form. The taxable person is obliged to ensure that the registration details are always correct. Failure to submit correct information to the tax authorities may be penalized.

D. Rates

The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT, including the zero-rate.

The VAT rates are:

• Standard rate: 25%

• Reduced rates: 6%, 12%

• Zero-rate: 0%

The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for a reduced rate, the zero-rate or an exemption.

Due to COVID-19, the reduced rate of VAT was reduced from 12% to 6% for the payment period 1 April to and including 30 September 2021. The reduced VAT rate of 6% went back to the stan dard VAT rate of 12% from 1 October 2021.

In Norway, the term “exempt with credit” is also used for zero-rated supplies. This means that no VAT is chargeable, but the supplier may recover input tax related to the supplies.

Examples of goods and services taxable at 0% (i.e., exempt-with-credit)

• Exports

• Supplies to foreign ships, and aircraft and ships involved in foreign trade

• Books and newspapers (including e-newspapers and e-journals)

• Transfer of a business as a going concern

• International transportation services (goods and passengers)

Examples of goods and services taxable at 6%

• Food (excluding alcohol and tobacco, and supplies in restaurants)

Examples of services taxable at 12%

• Domestic passenger transportation services (excluding the leasing of vehicles as such)

• Television licenses

• Hotel accommodation

• Museums

• Amusement parks

• Galleries

• Bigger sport events

The terms “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.

Examples of exempt supplies of goods and services

• Financial services

• Insurance

• Lease of residential property

• Medical services (but not including alternative medical treatment, cosmetic surgery and cos metic treatment)

• Educational services

• Real estate transactions

• Specified cultural and sporting events

Option to tax for exempt supplies. Norway operates an option to tax in respect of the following types of supplies:

• Letting out buildings or hiring out plants for use in taxable activity by an enterprise or in municipal or county municipal activity

• Letting out agricultural properties of at least five dekar (1 dekar is 1,000 m2) and agricultural land without buildings

• Associations of which the object is to build and maintain forest roads

• Developers who, for nonbusiness purposes, build water or sewage plants under private auspices

• Businesses and public enterprises that make railway installations available against consideration for an enterprise that is VAT registered

E. Time of supply

The time when VAT becomes due is called the “time of supply” or “tax point.” The basic time of supply for goods is when they are delivered. The basic time of supply for services is when they are performed. The time of payment does not generally affect the time of supply. If a customer makes an advance payment, the general rule is that the tax point remains the date of delivery of the goods or the date of performance of the services.

The supplier may defer the time of supply by issuing an invoice. In general, an invoice may be issued up to one month after the date of delivery of goods or performance of services. The invoice date then becomes the tax point.

Sales documents issued within the first 15 working days of the month, can state the last day of the preceding month as the document date, provided that the goods or services are delivered at this time.

Deliveries that are invoiced monthly may be invoiced within the first 15 working days of the month following the month of delivery.

Services that are supplied on a continuous basis must be invoiced within one month after the end of the ordinary VAT period in which the delivery takes place.

For services that are delivered on the basis of metered consumption (for example, electricity and telecommunications), sales documentation may be issued for longer periods, up to a maximum period of one year.

For services that are delivered on the basis of a tender or an equivalent pre-agreed price, the parties may agree on the sales documentation, unless the agreed invoicing deviates materially from the actual progress of the service delivery.

Sales documentation for certain services, such as passenger transportation or leases, may be issued in advance.

Deposits and prepayments. Sales documents are to be issued within one month after delivery of both goods and services. VAT is generally not charged on deposits and prepayments.

Continuous supplies of services. Deliveries, regardless of whether they are goods or services, invoiced monthly may be invoiced up to the 15th working day of the month following the month of delivery. Services delivered on a recurring basis, and goods delivered in connection therewith, must be invoiced no later than one month after the end of the ordinary VAT period.

Goods sent on approval for sale or return. The VAT must be charged when the goods are delivered. If the goods are returned to the seller, a credit-note should be issued by the seller.

Reverse-charge services. VAT payable through the reverse-charge mechanism is due on the date of the invoice if the invoice is issued in accordance with the generally accepted accounting prin ciples in the country of the service provider.

Leased assets. Leased assets, regardless of the type of lease, are to be invoiced on a regular basis, at the latest one month exceeding the VAT period. The tax point for supplies of leased assets is usually the invoice date.

Imported goods. The time of supply for imported goods is the official date of importation.

F. Recovery of VAT by taxable persons

A taxable person may recover VAT, which is charged on goods and services supplied to it for taxable business purposes. A taxable person generally recovers input tax by deducting it from output tax, which is VAT charged on supplies made.

Input tax includes VAT charged on goods and services supplied in Norway, VAT paid on imports of goods and VAT self-assessed for reverse-charge services received from outside Norway.

The amount of the VAT reclaimed must be detailed on a valid VAT invoice. Consequently, VAT may not be deducted as input tax before a VAT invoice is received. Input tax that is not properly documented may not be deducted. The input tax deduction must be reported in the VAT period in which the invoice is dated.

A deduction of input tax may be granted only if the payment is made through a bank or similar financial institution, unless the total payment is less than NOK10,000 (approx. EUR900).

The time limit for a taxable person to reclaim input tax in Norway is three years.

Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not for use in a business that is subject to VAT (for example, goods acquired for private use). In addition, input tax may not be recovered for some items of business expenditure.

Examples of items for which input tax is nondeductible

• Tobacco and alcohol

• Personal expenses

• Business entertainment

• Restaurant meals

• Purchase and maintenance of passenger vehicles, with certain exemptions for taxi and car-lease companies

• Gifts and handouts for advertising purposes if the value is at least NOK100 (approx. EUR9) inclusive of VAT

Examples of items for which input tax is deductible (if related to a taxable business use)

• Advertising

• Purchase, lease and hire of vans and trucks not for private use

• Fuel for vans and trucks not for private use

• Conferences

• Business use of home telephones and mobile telephones

• Passenger transportation services that are not for private use

Partial exemption. Input tax directly related to making exempt supplies is generally not recoverable. If a Norwegian taxable person makes both exempt supplies and taxable supplies, it may not deduct input tax in full. This situation is referred to as “partial exemption.” Exempt with credit supplies are treated as taxable supplies for these purposes.

Input tax incurred on purchases that are used for both taxable and exempt supplies must be apportioned to reflect the supplies that carry the right to deduction and those that do not carry such right. The apportionment may also be calculated based on the ratio of taxable supplies to exempt supplies in the preceding financial year if the preceding financial year is representative of the normal pattern of trading.

Approval from the tax authorities is not required to use the partial exemption standard method or special methods in Norway. Special methods are allowed in Norway. However, taxable persons must document the applied calculation method and present it in case of an audit by the tax authorities.

Capital goods. Capital goods are those assets that are procured with a certain value and duration in a business. In Norway capital goods are the following:

• Machinery, inventory and other fixed assets where the value of input tax of the capital good is higher than NOK50,000 (approx. EUR4,500)

Or

• Real estate that has been subject of new, extension or redevelopment where input tax amounts to NOK100,000 (approx. EUR9,000) or higher

Input tax incurred on the capital goods is deducted when the capital goods are acquired. However, the amount of input tax on capital goods depends on the use of the capital good in a 10-year period for real estate and 5-year period for other capital goods. The use of the capital good must therefore be assessed each year in the adjustment period. The initial deducted input tax is adjusted if the use of the capital good changes from VAT deductible to nondeductible pur poses (or vice versa).

In Norway, the capital goods adjustment does not apply to any services.

Refunds. If the amount of VAT recoverable in a bimonthly period exceeds the amount of output tax payable in that period, the taxable person has an input tax credit. A refund claim is triggered automatically if the VAT return shows a VAT credit. Refunds are generally processed within three weeks after the date on which the VAT authorities receive the VAT return. The VAT authorities pay interest on refunds that are paid late. The annual interest rate is 8% as of 1 July 2021. Note that the annual interest rate for late payment was reduced to 6% for the period from 10 July to 31 December 2020 as a COVID-19 measure.

Pre-registration costs. A VAT-registered entity is entitled to deduct input tax on goods and ser vices that were procured up to three years prior to registration in the VAT register (retrospective tax settlement), provided that the procurements are directly related to the taxable activity. The retrospective tax settlement must be claimed no later than three years after registration. Special limitation rules apply for retrospective tax settlement related to “capital goods.”

Bad debts. A taxable person can reverse the calculated output tax if it must be regarded as indefinitely unrecoverable from the recipient of the supply. The debtor (i.e., the recipient of the supply) must not have the ability to pay off the supplier’s receivable and the claim must be regarded as indefinitely unrecoverable. It is not enough that the debtor lacks the willingness to

settle the receivable. There are strict conditions that need to be met for the VAT to be defined as indefinitely unrecoverable and therefore reimbursed by the tax authorities as a “bad debt.”

Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Norway.

G. Recovery of VAT by non-established businesses

The Norwegian VAT authorities refund VAT incurred by businesses that are neither established nor registered for VAT in Norway. A non-established business may claim Norwegian VAT to the same extent as VAT-registered businesses.

Norway does not apply the reciprocity principle to refunds. Consequently, it does not exclude claimants based on the country where they are established. For example, foreign entrepreneurs providing transport services directly to and from Norway are not obliged to register for VAT, but they are entitled to receive a refund of VAT paid on purchases of goods and services in Norway.

A claimant must submit the following documentation to obtain a VAT refund:

• Application Form RF 1032

• Under the general rule, the original VAT invoices and import documents. If the applicant only has an electronic accounting system, this must be stated in the application. In such case, print outs will be accepted. Original invoices will be returned once the application has been pro cessed

• A power of attorney if the claimant uses the services of a third party to recover the VAT

• A certificate of taxable status obtained from the competent tax authorities in the country in which the claimant is established. The certificate, which is valid for 12 months from the date of issu ance, must be completed, signed and stamped by the local tax authorities

• If the claim relates to goods that are located in Norway at the time of submission of the claim form, an explanation of the basis on which the refund is requested

• The deadline for submitting applications is 30 September following the claim year. This deadline is strictly enforced. The forms must be completed in Norwegian, Danish, English or Swedish

• The minimum claim period is a calendar quarter, and the maximum claim period is one calen dar year. The minimum claim amounts are NOK5,000 (approx. EUR450) for a quarter and NOK500 (approx. EUR45) for an annual claim

• Applications for refunds of Norwegian VAT may be sent to the following address: Skatteetaten Postboks 103 N-1501 Moss Norway

• Claims for VAT refunds are generally paid within six months

Late payment interest. In Norway, interest is not paid on late refunds to non-established busi nesses.

H. Invoicing

VAT invoices. Under the general rule, invoices and credit notes must be issued by the supplier for all sales and exports. A Norwegian taxable person must generally provide an invoice including VAT for all taxable supplies made. Invoices must support claims for input tax made by Norwegian taxable persons and VAT refunds claimed by non-established businesses.

Credit notes. A credit note may be used to reduce the VAT charged and reclaimed on a supply. The document should be marked “credit note” and it must refer to the original invoice.

Electronic invoicing. Electronic invoicing is allowed in Norway, but not mandatory. Electronic invoicing is permitted, provided that the electronic invoice is in a non-editable format. The term “electronic invoicing” here means a noneditable file, f.eks.pdf., generated by the ERP system and sent to the client as an attachment to an email.

However, note that the term “electronic invoicing” in Norway differs from the term described above. According to the Norwegian Bookkeeping Standard 4 (NBS4), electronic invoices are data files sent by the invoice issuer (ERP system) directly into the invoice recipient’s ERP sys tem. The file is processed automatically. The pdf document is considered an electronic copy of the paper invoice.

Simplified VAT invoices. Simplified VAT invoicing can be used by retailers in Norway, for supplies made cash sale to private consumers (for private use). Such supplies can be documented with out specification of the buyer and rather by cash register receipt. The purchase amount must not exceed NOK40,000 (approx. EUR3,500) including VAT, and the payment must not be in cash. When the payment exceeds the above amount or is paid in cash, the vendor’s name and address must appear on the invoice.

Self-billing. Self-billing is allowed in Norway, for certain supplies. For example, an entity that has a bookkeeping obligation in Norway can issue an invoice for the purchase of goods or services from a seller that does not have a bookkeeping obligation.

Further, when a sale is completed with a part exchange, the invoice can be issued by one of the parties. A joint-number series can be used for such sale documents.

Additionally, there are specific regular invoicing exemptions for the agriculture industry, handi crafts and for purchase where the buyers themselves dispose of information only on the scale, volume, weight, quality, etc.

Proof of exports. Goods and services exported from Norway or supplied from the mainland (Norway) to the Norwegian areas of Jan Mayen and Svalbard are exempt from VAT with input tax credit. To qualify exported goods as VAT-free, suppliers must prove the goods have been exported. The documentation requirement for goods is a printed copy of the Customs Single Administrative Document where an attestation from the transporter or the Customs has been inserted

Foreign currency invoices. If an invoice is issued in a foreign currency, the VAT must be stated in the domestic currency, which is the Norwegian kroner (NOK), using the official exchange rate for the date of the invoice. No other exchange rate may be used for VAT purposes. Other amounts shown on the invoice may be stated in other currencies.

Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in Norway. As such, full VAT invoices are required.

Transactions between related parties. There is no difference between supplies of goods and ser vices for transactions between related parties. If a commonality of interest exists between the supplier and the recipient of goods or services and it must be assumed that this could result in a different consideration being set than would be the case if such commonality of interest did not exist, the basis of calculation may not be set lower than the market value.

Records. Compulsory record reporting must be kept as long as there is a need to check the report ing material. Storage should be in a format that maintains the ability to read the material. Further, the material must be adequately secured against unjustified change, deletion or loss.

Primary documentation is used as a basis for the actual bookkeeping process, i.e., incoming and outgoing invoices, cash book balances, bank vouchers, salary slips, specification of mandatory

financial reporting, etc. Secondary documentation is often additional documentation with impor tant information, which does not directly lead to any transactions in the accounts. Examples of secondary documentation include sales agreements, order slips and other agreements of impor tance for the enterprise.

Record retention period. The main rule states that primary documentation must be kept for five years after the end of the fiscal year. Secondary documentation must be kept for three years and six months after the fiscal year ending period. There are several exceptions from these rules. One important exception is the expanded documentation rules for capital goods that are subject to VAT adjustments, where specific documentation must be kept up to 15 years from the end of the financial year of procurement. Import documents must be kept for 10 years.

Electronic archiving. Electronic archiving is available in Norway. Documentation that is neces sary for the preparation of compulsory financial reporting and compulsory specifications, which is available electronically, must stay accessible as such for at least three and a half years after the end of the financial year. Entities with less than NOK5 million in turnover (excluding VAT) are excluded. Entities that are in the process of liquidations must keep their documentation for six months after the liquidation is completed.

It is up to the entity itself to decide where the ongoing accounting is carried out, as long as the retention requirements are met. As a main rule, records must be stored in Norway under the whole retention period. However, entities that conduct operations abroad may keep records related to this activity in that country if they are obligated to do so by the law of the country where the operations are conducted. The accounting material must be available for auditing by the tax authorities in Norway without any delay throughout the retention period. It is allowed to store the electronic accounting material in the Nordic countries, provided notification is made to the Directorate of Taxes. No application is required. However, for storage in other countries, an application is required. No specific guidelines have been given for the determination whether the storage in other countries will be permissible in any given case.

I. Returns and payment

Periodic returns. In general, Norwegian taxable persons file bimonthly VAT returns. However, farmers and fishermen must file returns annually. Businesses with taxable turnover of less than NOK1 million may opt to file annual returns.

VAT groups submit a single, joint VAT return bimonthly.

To ease cash flow, businesses that receive regular VAT refunds may request shorter VAT return periods. Taxable persons must contact the appropriate VAT office to register for annual returns or for permission to use shorter VAT return periods.

Import VAT is declared through the VAT return.

Periodic payments. For bimonthly VAT returns, the VAT due for each period must be reported and paid in full within 1 month and 10 days after the end of the VAT period. For bimonthly reported VAT, this means that the first term of the VAT report (January and February) is reported 10 April, etc. Return liabilities must be paid in Norwegian kroner (NOK). The payment must be made to the tax authority’s bank account by the due date of the submitted VAT return. All payments of VAT due must be made by bank transfer.

Electronic filing. Electronic filing is mandatory in Norway for all taxable persons. It is obligatory to report VAT returns electronically. The opportunity to apply for an exemption for VAT returns by paper has been discontinued. The electronic VAT return form is filed via Altinn portal (https://www.altinn.no/en/forms-overview/tax-administration/value-added-tax-vat-return-gener al-industry-/).

Once the VAT return is submitted, the payment information will be provided in the Altinn portal, i.e., account number and KID (client identification number).

Payments on account. Payments on account are not required in Norway.

Special schemes. Recipients of remote services. Recipients of remote services who are not regis tered for VAT in Norway are obliged to report reverse-charge VAT through the government web portal (www.altinn.no) on a separate VAT return for non-registered entities (Form RF-0005). The return is submitted quarterly, and payments are done 1 month and 10 days after the end of the VAT period. The threshold is for purchases exceeding NOK2,000 (approx. EUR180) excluding VAT, per quarter year. The buyer must be a public sector enterprise or business that operates in or is affiliated to Norway. This also applies to foreign enterprises or businesses.

Secondhand goods. Where secondhand goods, works of art, collectors’ items or antiques are purchased for resale, including supplies on commission or at auction, the basis of calculation for the resale may be set as the difference between the purchase price and the sales price for the individual items. The goods must be purchased from a seller who does not charge VAT on the sale or who does not specify VAT in the sales document.

If purchases or resales are combined and the prices of the individual items are not known, the basis of calculation of the resale shall be the difference between the purchase price and the com bined sales price of the items for the whole VAT period. If such purchases or sales amount to more than 80% of the purchases or sales made during the VAT period, the gross profit on other secondhand goods, etc., for which the sales price exceeds the purchase price may also be calcu lated as a whole and per VAT period. If, in a given VAT period, the value of the purchases exceeds that of the sales, the difference may be included in the total value of the purchases in subsequent VAT periods.

Annual returns. Annual returns are not required in Norway.

Supplementary filings. No supplementary filings are required in Norway. It has been proposed to implement “VAT” listings (sales and purchase notification) from 2024. At the time of preparing this chapter, no further details have been published on the proposed listings.

Correcting errors in previous returns. In general, amounts reported incorrectly should be corrected by filing either a corrected (replaces the previous return) or supplementary return for the same period the mistake was made. Errors and omissions in former VAT returns may be corrected by the taxable person on its own initiative within three years without risk of penalty tax being imposed.

Digital tax administration. SAF-T. Standard Audit File for Tax (SAF-T) is mandatory in Norway as of 1 January 2020. All entities with a bookkeeping obligation in Norway are required to submit accounting data electronically using the xml format, when requested by the Norwegian tax authorities. SAF-T is a standard data format for providing accounting data. Companies are required to convert the requested accounting data to a SAF-T xml file and submit this through the government web portal (www.altinn.no). The primary purpose is to make tax audits more effec tive and efficient. SAF-T is mandatory for all entities with a bookkeeping obligation in Norway. However, exceptions are made to entities with a turnover of less than NOK5 million and entities with less than 600 accounting transactions per year. Note that if SAF-T exempt entities have electronically available data, e.g., an ERP system, SAF-T will still be mandatory.

Modernization of the VAT system. Norway is considering the implementation of so-called “VAT listings,” which is a formal requirement to periodically report transaction data to the tax author ity along with the VAT returns.

On 26 August 2021, the tax authorities sent out a consultation and proposal for the introduction of a so-called sales and purchase report. This means ongoing reporting of transaction data to the tax authority in addition to the VAT return based on SAF-T data. The consultation deadline is set for 26 November 2021. According to the proposal, a sales and purchase notification will be introduced from 2024. Key features of the proposal include the following:

• It is proposed to introduce an obligation for companies subject to bookkeeping/public enter prises to continuously provide further information to the tax authorities on sales and purchase transactions with other businesses/public enterprises.

• The disclosure obligation applies to the individual sales and purchase transaction with information on the following: invoice number, documentation date, indication of the parties to the transaction with name and organization number, as well as information on consideration and VAT.

• Exceptions are proposed for businesses with low operating revenues, either NOK200,000 or NOK500,000 per year. No amount limits are proposed for public enterprises.

• It is proposed that the type and purchase notification shall be delivered with the same fre quency as the VAT notification for those who are VAT registered.

• Delivery must be made using a standardized format (based on SAF-T data).

• It must not be reported what the individual transaction applies to.

Digital VAT reporting in 2022/2023. A new VAT return will be introduced as of 1 January 2022. The new VAT return is based on the standard SAF-T (Standard Audit File – Tax) VAT codes. The VAT return can either be submitted digitally (“system-to-system” via API technology) or manu ally in a portal.

J. Penalties

Penalties for late registration. Any entity that willfully or negligently fails to register for VAT could be subject to fines or imprisonment. Penalties and interest will also be assessed if, because of late registration, a taxable person submits a late VAT return or pays VAT late.

Penalties for late payment and filings. Penalty interest is imposed when an entity is late in deliver ing the compulsory VAT report or has conducted obvious mistakes. The interest rate is announced twice a year in a decree issued by the Ministry of Finance. The annual interest rate as of 1 July 2021 is 8%. Please note that the annual interest rate for late payment was reduced to 6% for the period from 10 July to 31 December 2020 as a COVID-19 measure. An additional penalty of up to 60% of the tax due for a period may be imposed on taxable persons that willfully or negli gently contravene the provisions of the VAT Act. However, the normal penalty rate is 20%.

Penalties for errors. The penalties for errors in Norway are the same as those for late payment and filings (see above).

Penalties for fraud. The penalties for fraud in Norway are the same as those for late payment and filings (see above). If criminal charges apply for fraud, fines may apply as well as imprisonment of up to two years.

Personal liability for company officers. VAT representatives are jointly responsible for submitting the VAT return and paying any VAT due (joint and several liability).

In the event of bankruptcy, those in charge in the company may be held liable for outstanding VAT in case the negligence is proved against them in conducting business.

Statute of limitations. Normally, the Norwegian tax authorities can go back up to five years in time to review returns and identify errors and impose penalties. However, for taxable persons who voluntarily correct errors in previous VAT returns, the tax authorities can go back up to 10 years.