From 1 July 2011, private persons in Norway who buy electronic services from abroad must pay VAT. It is the foreign supplier of electronic services who must calculate and collect the VAT in these cases.
The Norwegian tax authorities have established a simplified system for registration and reporting.
The new rules and the simplified registration system are very similar to the rules that have been in force in the EU's member states since 2003. Several suppliers now included in the Norwegian system will therefore already be familiar with its content.
Information about VAT on electronic services follows below.
Electronic services sold by Norwegian suppliers to Norwegian consumers have been liable to VAT since 2001, but not sales to Norwegian consumers by foreign suppliers. From 1 July 2011, VAT must be charged when private individuals living in Norway purchase electronic services from foreign suppliers.
The Norwegian system is based on the rules that have applied in the EU since 2003 and guidelines from the OECD. The rules state that the jurisdiction where the service is consumed has the right to levy general consumption taxes – including VAT.>
As an alternative to normal registration in the Norwegian VAT system, foreign suppliers can use a simplified registration and reporting system when selling services to private individuals.
Sales to businesses and public enterprises (B2B) shall still be dealt with pursuant to the normal reverse charge rules.
The supplier can use the simplified system if it delivers electronic services or electronic communication services from abroad to Norwegian private individuals (B2C).
The supplier can also use the system if it also delivers electronic services to businesses and public enterprises (B2B).
The supplier cannot use the system if it is established in Norway or chooses to set up business in Norway. In such cases, the supplier has an obligation to register in the Norwegian VAT register, for example when the supplier has other turnover that triggers a duty to pay VAT.
If a supplier of electronic services delivers the services through the use of an intermediary, the intermediary shall be deemed to be the supplier. This means it is necessary to explain the distinction between the supplier and the intermediary:
The difference will be 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. The definition of electronic services is mainly based on the delivery of the services. 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 Value Added Tax 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 intermediary cannot themselves be registered pursuant to section 2-1 third paragraph.
Electronic services are defined in the Norwegian Value Added Tax Act section 1-3 first paragraph letter j. The definition is based on the EU VAT Directive (2206/112/EU) and the EU VAT Regulation (Council Implementing Regulation NO 282/2011 of 15 March 2011). They can be used as guidelines when deciding what is included in the term electronic services.
Examples include the downloading of software, music, films, digital books and other electronic publications.
A foreign supplier of electronic communication services to Norwegian private individuals can also use the simplified system. This goes further than the current system in the EU. By electronic communication services is meant broadband telephony and internet access, among other things. Broadcasting services are also included, regardless of whether the broadcasting takes place via traditional radio or TV networks, the internet or other networks.
If the content of the service would be exempt from the duty to pay VAT in connection with domestic sales in Norway, VAT will not be charged in connection with the sale of such services from a foreign supplier to Norwegian private customers. For example, this means that VAT shall not be charged on the sale of services in the form of lotteries and games of chance delivered via the internet (online poker etc.) to Norwegian customers.
No. Suppliers included in the simplified system must use the system for reimbursement of VAT.
See here for more information.
Registration, reporting and payment take place by following the instructions at www.voesnorway.com.
The supplier is assigned an identification number and password.
The duty to register arises when the total value of deliveries to recipients in Norway exceeds NOK 50,000 during a period of 12 months. Suppliers who otherwise meet the requirements can nonetheless be registered in the simplified registration system before this amount limit is exceeded.
A supplier who falls below the amount limit of NOK 50,000 and who has not been deleted (see below), must nonetheless register in the system for two calendar years and calculate and pay VAT and submit VAT returns during this period.
The simplified system enters into force on 1 July 2011. Registration can take place from 20 June 2011. However, a confirmation e-mail will not be sent until 30 June 2011.
VAT must be declared and paid by the same deadlines as apply to the EU system, i.e. quarterly, with a deadline for the submission of returns and payment 20 days after the end of the period:
|Reporting period ||VAT declaration and payment due by
|1 July to 30 September
|1 October to 31 December
|1 January to 31 March
|1 April to 30 June
In the simplified registration system, the supplier must submit a VAT return stating its identification number, the calculation basis and the calculated VAT translated into Norwegian kroner. The amounts must be rounded off to the nearest whole krone.
Bank details for making payments
Skatte- og avgiftsregnskap
DNB Bank ASA
IMPORTANT: It is essential that you use your 7 character scheme identification number (issued at registration) as the payment reference.
In the simplified registration system, the supplier must keep a list of transactions that concern the sale of electronic services to Norwegian private individuals. The list of transactions must be sufficiently detailed for it to be compared with the VAT return and thereby function as a means of control.
According to the Regulation to the VAT Act Section 15-10-1, the transaction record shall at least contain the following information
a) documentation reference
b) delivery date
c) name and residential address of customer
e) fee, inclusive of value added tax, where the amount is given in Norwegian kroner, and
f) value added tax.
The list of transactions must be stored for 5 years and, at the Norwegian tax authorities' request, it must be made available electronically within three weeks.
As regards compliance with the regulations, suppliers in the simplified registration system will be subject to most of the Value Added Tax Act’s general administrative provisions. Among other things, this means that the suppliers will have a general duty to disclose information that has a bearing on VAT control and that the VAT authorities can obtain information about the suppliers from third parties. It also means that the VAT authorities can stipulate VAT by discretionary judgement and otherwise impose sanctions such as additional tax or penal sanctions if a supplier provides incorrect or incomplete information or fails to submit a VAT return.
A supplier will be deleted from the simplified registration system when the enterprise ceases trading or when the conditions for using the simplified registration system are no longer met. A supplier will also be deleted if it repeatedly fails to fulfil its obligations pursuant to the Value Added Tax Act.
Deleted suppliers who still engage in activities that are liable for VAT are obliged to register in the Norwegian VAT register through a representative.