VAT IN NORWAY
A company that becomes a VAT payer shall on its invoices:
- adds the abbreviation MVA after its organisational number,
- adds the corresponding VAT to each good/service.
Thus, the invoice contains the amount: net, VAT and gross.
The VAT return is a form of VAT accounting – it should include the sum of VAT on costs, the sum of the company’s net revenue and the sum of VAT on revenue.
The return is submitted by the prescribed deadlines – usually every two months, electronically via www.altinn.no.
In order to prepare the VAT report, you need to book the bank statements for a given period of time (accountskrifter), the invoices issued by the company (revenue invoices) and the costs incurred during the period (invoices and receipts).
It is possible to recover VAT paid in the period before the company was registered for VAT. An additional declaration must be filed showing the tax from costs from the time before the MVA registration.
REGISTRATION FOR VAT
Link to the form here.
Registration in the VAT register means that the entrepreneur is obliged to keep accounts in accordance with Norwegian regulations (Accounting Act of 19 November 2004 No. 73, the VAT Act). The business is obliged to charge and pay a levy on the sale of goods and services.
RULES FOR SUBMITTING MVA DECLARATIONS
Declarations are submitted by the set deadlines:
- by 10 April (for January, February),
- by 10 June (for March, April),
- by 31 August (for May, June),
- by 10 October (for July, August),
- by 10 December (for September, October),
- by 10 February (for November, December).
To prepare the VAT report, you need to post the transactions from the bank statement for the period (accountsskrifter), the invoices issued by the company (revenue invoices) and the costs incurred during the period (invoices and receipts).
Since January 2017, there have been changes to the rules for filing VAT returns in Norway. VAT-registered individuals and companies settle import charges by declaration – shipping documents and customs duties remain unchanged. VAT is not paid at the border, as it was in previous years. The value of the goods is shown in the import column for statistical purposes, but this does not affect the settlement with the authorities.
IMPORT / EXPORT
The SAD must be accompanied by an invoice for the purchase of goods, which the supplier has issued either with zero VAT or with the VAT rate applicable in his country. Once the vendor has entered VAT on the invoice, the buyer must send confirmation of the export of the goods and request a correction of the invoice, so that the VAT charged is corrected and refunded.
Businesses registered for VAT in Norway do not pay tax at the border, but show foreign purchases on the VAT return.
The MVA tax on imports is 25% and 15%. Electric cars, ships and their parts, electric windmills and other energy sources are not taxed.
Exporting goods means exporting goods produced in a country. In order to treat the sale of goods as an export, the export outside the European Union must be confirmed at customs.
Sometimes the export of goods requires special permits. This applies to:
- medicines (www.legemiddelverket.no),
- arms (www.politi.no),
- food / food supplements (www.mattilsynet.no),
- seedlings and animals (www.mattilsynet.no).
Payment of VAT for exported goods is the responsibility of the recipient.
BUSINESS TAX LIABILITY
If the company’s turnover exceeds NOK 50 000 during the year, it must be entered in the VAT register. VAT in Norway is divided into three rates:
- 25% (basic),
- 15% (reduced),
- 12% (low).
Tax in Norway is settled electronically (www.altinn.no) via a return.
If a Norwegian company has employees, it is obliged to pay the corresponding fees. The costs associated with hiring employees are divided into variable and fixed costs.
INCOME TAX IN A SOLE PROPRIETORSHIP AND COMPANY AS
A Sole Proprietorship (Enkeltpersonforetak)
The amount of tax in Norway increases with income. In addition, tax thresholds have been established beyond which a company must pay a higher percentage of tax.
At the beginning of the calendar year or as soon as the business starts, the business owner should declare how much profit (overskudd) his or her company will make for the whole of the following year. This can be done on paper on the Bestille skattekort form RF-1102B (if doing it for the first time) or electronically via Altinn.no. (in subsequent years of operation). In subsequent periods, the office will most likely send a calculation of the advance payments itself based on the previous years’ profit.
If the entrepreneur does not agree with the authority’s calculation, he/she should fill in the form Søknad om endring av skattekort on Altinn.no, in which he/she states the income he/she anticipates for the year. On the basis of the entrepreneur’s declaration, the tax office calculates the amount of advance tax, which is divided into four equal instalments. These must be paid on the prescribed dates:
|Payment deadline||15 march||15 june||15 september||15 december|
If the company was established on e.g. 20 May, the entrepreneur’s advance payment will be divided into 2 instalments payable in September and November.
By 31 May of the following year, the entrepreneur must submit a tax return (Skattemelding) showing the company’s profit and assets for the previous accounting period. The office itself sends out an initial version of the Skattemelding around March-April with the information it is aware of (e.g. interest, loans or income from employment). The entrepreneur has until 31 May to complete the annual return with additional information, i.e. the company’s income and the allowances it wishes to use. The office sends the entrepreneur (in the period up to October) a Skatteoppgjør, which contains information with the amount of surcharge or tax refund. If the amount to be paid is more than NOK 1,000, the Authority divides the tax into two instalments so that it is easier for the taxpayer to pay.
Read more about the one-man company.
AS company (Aksjeselskap)
Companies receive advance payments for the previous year in January. The Authority calculates these advance payments on the basis of the previous years’ income. The advance tax payment is payable in two equal instalments in the year following the tax year (e.g. for 2017 it is payable in 2018).
|Payment deadline||15 February||15 April|
If the company’s shareholders do not agree with the authority’s calculation, a request to change the advance payment can be submitted by the end of January on form Søknad om endring av/krav om forskuddsskatt for upersonlige skattytere.
AS companies for the previous tax year submit the following documents:
- Aksjonærregisteroppgaven by 31 January.
- Skattemelding for aksjeselskap by 31 May.
- Årsregnskap by 30 June.
Read more about AS.
Standardfradrag is a standard deduction – it amounts to 10 per cent of employment income (less than NOK 40 000). Employment income means gross salary and allowances that are taxable – benefits in kind, cash bonuses and excess expense reimbursement.
With the Standardfradrag, deductions are made for:
- deductible costs (Minstefradrag),
- the tax-free amount (Personfradrag).
When a person uses the standard deduction (10%), he/she is no longer entitled to other deductions.
Please note that from 2019 the 10% allowance is abolished. From January 2019, this deduction is only available to foreign seafarers and workers on oil extraction platforms.
If a person does not use the Standardfradrag but files an ordinary return or as a Pendler, he or she can deduct:
- travel to the place of permanent residence,
- costs of ferry tickets and gates,
- accommodation costs,
- food costs,
- interest on loans in Norway and abroad,
- parental allowance,
- contribution to IPA (individual pension fund),
- donations to charitable organisations,
- deductible expenses (minstefradrag) – granted to employees
- tax-free amount (personfradrag) – granted automatically.
TAXES FOR EMPLOYEES
Fixed costs are:
- Arbeidsgiveravgift employment levy – rates range from 14.1 per cent to 0 per cent of gross salary (depending on the tax zone),
- OTP pension insurance (Obligatorisk tjenestepensjon) – at least 2% of gross salary,
- Feriepenger (10.2% on gross salary).
Fixed costs total 26.3% on gross salary. Variable costs are on average 5% on the employee’s gross salary. They are related to sickness benefits, NWW insurance and any training.
1. What taxes should a Norwegian entrepreneur pay?
Entrepreneurs operating in Norway must pay income tax of 22% on the profit made, insurance premium of 11.4% on the profit and VAT (if the company is a VAT payer). When a company has employees, it additionally has to pay employment tax of 14.1% on the gross wage amount.
2. What is output tax?
Output tax is a value added tax that is paid to the tax office. It is charged on the value of goods and services sold. For example, if a company has issued in January and February 2018. invoices for a total of NOK 20,000 net and VAT 5,000, it shows these values on its VAT return for the 1st term of 2018. If it did not have any costs in this period on which it can deduct VAT, it has to pay NOK 5 000 of VAT to the office.
3. What is input tax?
Input tax is a value added tax added to the value of taxable goods and services. It can be deducted in the VAT return. E.g. if a company did not issue any revenue invoices in January-February 2018, but only bought material for NOK 5 000 gross (that’s NOK 4 000 net and NOK 1 000 VAT), it shows deductible tax of NOK 1 000 in its VAT return for 1 term 2018. shows NOK 1 000 of deductible tax. That is, the office will reimburse the company NOK 1 000 in VAT.
4. What services are not subject to VAT in Norway?
Certain industries are not subject to VAT in Norway. This includes financial, insurance, health and cultural services. Thus, a doctor who is active in health services is exempt from VAT. This means that he or she does not have to register in the MVA register and issue invoices with VAT.
5. Who should have a Norwegian tax identification number?
Every company in Norway should have a tax identification number (Organisasjonsnummer).
6. What is a tax identification number used for?
A tax identification number (Organisasjonsnummer) is necessary for the identification of legal entities, payment of insurance premiums, advance tax payments and VAT. You also need the number to deal with financial matters, e.g. to obtain a company loan.
7. How do I obtain a tax identification number?
You get a tax identification number (Organisasjonsnummer) when you register your business with the Enhetsregisteret.
8. What does the double taxation agreement refer to?
A Convention for the avoidance of double taxation was signed between the Republic of Poland and the Kingdom of Norway on 9.09.2009. This convention aims to establish rules of cooperation between Norwegian and Polish entities so that taxes are paid in only one of the countries. It is also intended to prevent income tax evasion.
9. Who is a person with limited tax liability?
The term is closely related to residence in Norway – if a Pole stays in Norway for no more than 183 days in a year or less than 270 days in three years, only his or her income from a Norwegian employer is taxed in Norway. He reports all his income (including that from Norway) in his annual return in Poland.
10. Who is a tax resident?
A tax resident is a person who stays in Norway for more than 183 days in a year or more than 270 days in three years, in which case the entire income is taxed. You can also become a tax resident by showing that you are connected to Norway, e.g. that you have a flat, bank account or business. You report all your income (including foreign income) in your annual return in Norway.
11. What can be deducted in the annual tax return?
The following are deductible in the annual tax return depending on the tax allowances applied: travel expenses (e.g. airline tickets), housing rental costs, kindergarten costs, loan interest, etc.
12. Can the deadline for filing the tax return be postponed?
The deadline for submitting your tax return can be extended. You must apply through Altinn.no stating the reason for the delay.
13. Is the basis on which tax is calculated net or gross turnover?
Income tax should always be calculated on net income.
14. Can an entrepreneur deduct the tax-free amount in Norway?
An entrepreneur cannot count on a deduction for Minstefradrag, as this amount only applies to employees (NOK 106 750 for a full year of work in 2021, and NOK 104 450 in 2020). However, there is a Personfradrag, which is an amount of income (from a whole year in Norway) below which no income tax comes out. That is, if an entrepreneur’s income during 2021 was less than NOK 52,450 he or she will not pay tax on it, and in 2020 for an income of less than NOK 51,300.
15. How much is income tax?
Income tax in Norway from 2019 is 22% on the profit made. In addition, tax thresholds have been established beyond which the entrepreneur pays a higher percentage of tax.
The tax thresholds for 2021 for income:
- up to NOK 184 800 – 22%,
- from NOK 184 800 to NOK 260 100 the excess is multiplied by an additional 1.7 per cent,
- from NOK 260 100 to NOK 651 250 the excess is multiplied additionally by 4%,
- from NOK 651 250 to NOK 1 021 550 the excess is multiplied by an additional 13.2%,
- from 1 021 550 NOK the surplus is multiplied by an additional 16.2%.
Read more about 'income tax in Norway’.
16. How is tax and advances calculated?
When you start your business or at the beginning of the year, you are required to declare your income for the coming year. From this amount, the office calculates advance payments of 22% income tax + 11.4% social security. These advances must be paid to the office on the specified dates.
17. Is the amount of income tax in Norway the same for each entrepreneur?
The amount of tax depends on the income and how long the entrepreneur has worked in Norway. For example, a person who came to Norway in May and set up a business will have more tax to pay than someone who has worked all year, even though their income was the same. This is because the former entrepreneur only worked for eight months and the latter for 12 months. In addition, the amount of tax is affected by allowances. If someone is a Pendler, he will pay less tax than one who lives permanently in Norway with his family.
18. What are the deadlines for paying advance income tax in Norway?
Advance income tax payments are paid in four instalments on the dates specified by the authority:
– 15 March,
– 15 June,
– 15 September,
– 15 December.
19. By when does an entrepreneur submit tax returns?
Entrepreneurs must submit their tax returns by 31 May. The return (Skattemelding) must show income and any tax allowances. On the basis of this data, the office sends the Skatteoppgjøret, in which it determines the amount of tax to be paid or refunded.
20. What happens if a business fails to submit a tax return?
If the entrepreneur fails to comply with his/her obligation and does not submit the tax return by the specified deadline, the tax office will calculate the tax due itself. In addition, the entrepreneur will receive a financial penalty for failing to meet the required deadline.
21. What amounts do entrepreneurs with employees have to pay?
According to Norwegian regulations, companies with employees pay tax (Arbeidsgiveravgift) of between 14.1% and 0% depending on the zone. In addition, Feriepenger receives 10.2% of gross salary and compulsory pension insurance (Obligatorisk tjenestepensjon) of 2% of gross salary.
In addition to the fixed costs that the entrepreneur incurs, there are also so-called variable costs related to sick leave (Sykepenger), HMS training or training required for specific jobs and additional expenses (work clothes, equipment) – an average of 5% on the gross salary amount.
1. What is MVA?
Merverdiavgift, or MVA, is the Norwegian tax on goods and services. The abbreviation MVA is placed behind a company’s organisational number on invoices issued by that company when it is a VAT payer.
2. Should the abbreviation MVA be on the invoice?
Yes, on the sales invoice of a company that is a VAT payer. The abbreviation MVA is placed after the company’s organisational number.
3. Who has to pay VAT in Norway?
The obligation to pay VAT in Norway is incumbent on any entrepreneur whose company has an annual turnover in excess of NOK 50,000. Once this amount is exceeded, the company must be notified in the VAT register. Read also when does a business become a VAT payer.
4. Should every business pay VAT in Norway?
Certain industries are exempt from paying VAT, e.g. financial institutions, insurance companies. Other than that, only companies with a turnover of more than NOK 50 000 during the year should pay VAT.
5. How do I register my company for VAT in Norway?
In order to register your company in the Norwegian VAT register, you must complete the Samordnet registermelding DEL 2 form and send it to the office either on paper or via Altinn.no together with invoices issued by the company for NOK 50,000 in sales (inclusive).
6. How long does it take to register for VAT?
It takes approximately one month to register your business as a VAT payer.
7. How high is the VAT rate in Norway?
The VAT rate in Norway is divided into three types:
- standard (25% – for goods and services),
- reduced (15% – for food and beverages),
- low (12% – for personal transport and culture).
Find out more about this here.
8. When should VAT be paid?
VAT in Norway is paid once every two months. The payment deadlines are:
– 10 April (January, February),
– 10 June (March, April),
– 30 August (May, June),
– 10 October (July, August),
– 10 December (September, October),
– 10 February (November, December).
9. How do I file my VAT return?
You can submit your VAT return in Norway electronically via www.altinn.no. This must be done within the deadlines set by the authorities.
10. How is VAT charged on imported goods?
In the case of imported goods, the amount of VAT in Norway is calculated on the amount of the purchase of those goods from abroad.
11. How often should entrepreneurs settle the VAT?
Most businesses settle bimonthly on the dates set by the authorities – 10 April, 10 June, 30 August, 10 October, 10 December, 10 February. Businesses with revenues of less than NOK 1 000 000 can apply and settle once a year.
12. Is it possible to settle the tax once a year?
It is possible, but an application must be submitted by the end of January. This form of settlement is only possible for companies whose income is less than NOK 1 000 000 and the company has no tax arrears. Otherwise, the office may issue a negative decision on the annual VAT settlement.
13. Does an AS company have to settle VAT once every two months?
An AS company whose income does not exceed NOK 1,000,000 has the option to pay tax once a year – upon application.
14. Who is a VAT Commissioner?
A representative can be a company or an individual who has a permanent personal number in Norway. This representative represents the company in tax matters and is responsible for calculating and paying VAT on behalf of the foreign company that works with the Norwegian contractor.
15. Is it possible to recover VAT on goods bought before the company was registered for VAT?
It is possible.
16. How can I recover VAT on goods bought before registering my company in the VAT register?
In order to recover VAT for goods bought before the registration of the company in the VAT register, it is necessary to submit, together with the first VAT return, an additional return for the period before the registration of the business as a VAT payer. E.g. a company after 6 months has reached a revenue of NOK 50 000 and has been registered in the MVA register. The office sent confirmation of registration and set the first return for the 4th deadline (i.e. for the months of July-August). However, the company had been buying tools and materials since the beginning of the business, i.e. since February. Therefore, in addition to the VAT return for the 4th deadline, it will file an additional return showing the total VAT on costs for the period from February to June.
17. How do I recover VAT for goods imported from Poland?
Often, sellers from Poland issue invoices with the VAT applicable to them, even though they have information that the goods will go to Norway. Only when they receive confirmation of the IE-599 do they issue a VAT adjustment so that the sale is ultimately made at a rate of 0, and they refund the overpaid VAT to the customer. In some cases, the customer may have to ask the seller to refund the VAT. It is important that the customs documents are completed correctly.
18. What should I do if the office charges too much VAT?
If the VAT charged by the office is too high, the declaration must be re-checked. If you believe that the authorities have made a mistake, you must appeal this decision, together with evidence of your position on the matter.
19. How do I check if a company is liable for VAT in Norway?
To check whether a company is a Norwegian VAT payer, you can go to www.brreg.no and enter the name of the company you are searching for in the Finn foretak/selskap field. A company is a VAT payer if the following is displayed in the field Særlige opplysninger: Registrert i Merverdiavgiftsregisteret.
20. What is an invoice without VAT?
An invoice without VAT is a so-called zero invoice – issued for the export of goods abroad in Norway or an invoice received from a foreign seller (for imported goods).
21. How do I submit my return online?
You can submit your VAT return online using www.altinn.no. You will need form RF-0002, which must be completed correctly. When completing the document, you must select hovedoppgave and then select the accounting period. Revenue is entered without VAT, which is calculated automatically, and costs should include the sum of VAT for goods and services at the appropriate rate (25%, 15%, 10%). Once the data is complete, the system will calculate the amount of tax to be paid (field avgift å betale) or to be refunded (field til gode).
1. What tax deductions apply in Norway?
Tax allowances allow deductions from income or tax. There are a number of reliefs available in Norway, including:
- childcare costs,
- commuting expenses,
- interest on loans in Norway and abroad,
- deduction for donations to charitable organisations,
- deduction for single parents,
Even more relief is available to a person with Pendler status:
- travel expenses,
- costs of renting accommodation in Norway,
- electricity bills,
- daily allowance.
For newcomers to Norway, there is the Standardfradrag relief, which excludes all other reliefs. As of 2018, the second tax class has been abolished, due to low spouse income.
Please note that as of 2019, the 10% relief is being abolished. From January 2019, this relief is only available to foreign seafarers and workers on oil production platforms.
2. What is the Standardfradrag?
Standardfradrag is a tax deduction of 10 per cent, which can be deducted by filing a tax return. Standardfradrag cannot be greater than NOK 40 000.
Please note that from 2019 the 10% allowance is abolished. From January 2019, this allowance is only available to foreign seafarers and workers on oil production platforms.
3. Who can benefit from Standardfradrag?
All persons who have worked in Norway for less than two years are entitled to the relief. The length of stay in Norway is documented by, among other things, a certificate of residence. The relief applies to persons working as employees.
Please note that from 2019, the 10% allowance is abolished. From January 2019, this relief only applies to foreign seafarers and workers on oil production platforms.
4. What documents are needed to be able to account for the 10% relief?
In order to deduct the Standardfradrag, you need to fill in a pre-assessment return (Skattemelding, which is sent out by the Norwegian office) and enter a request for this relief, while stating the amount of the deduction. The office will itself verify whether the person is entitled to this deduction and send the final tax result in the Skatteoppgjøret.
5. What does Pendler status mean?
Pendler status is a status enjoyed by people who regularly visit family at their place of permanent residence, e.g. in Poland. This allows you to deduct expenses such as travel to visit family or rent in Norway.
6. Who can benefit from Pendler status?
To benefit from Pendler status, you must have family (spouse and/or children) abroad in Norway. A marriage certificate and proof of co-registration with the family is required. Regular visits to your home country are proven by, for example, airline tickets, bus tickets, boat trips, etc.
7. What can a person with Pendler status deduct?
As a Pendler, you are entitled to tax deductions for rent in Norway, travel to your home country or electricity bills (in rented accommodation). In order to benefit from these deductions, you will need to provide copies of rent or electricity bills, your tenancy agreement, or receipts for travel to Poland.
8. What documents are needed to settle as a Pendler?
In order to settle as a Pendler, you need to provide a set of documents:
- A statement of annual wages and taxes paid (Sammenstilling),
- Årsoppgave (account statement – sent by the bank),
- certificate of domicile with your family (e.g. in Poland),
- marriage certificate (married persons),
- birth certificates of children (persons having children),
- proof of travel (tickets, toll fees, etc.),
- rent contract in Norway and receipts for payments (if you want to deduct rent),
- electricity bills and receipts (if you want to deduct this expense).
9. What does the settlement of accounts involve for persons who do not have Pendler status and cannot make use of Standardfradrag?
They will settle the account as normal.
10. What is the form of regular settlement?
The normal settlement applies to persons who are not able to make use of other tax allowances. In the normal tax settlement you can deduct childcare costs (kindergarten, day care centre), commuting expenses or interest on loans.
11. What documents do I need to submit an ordinary settlement?
To submit an ordinary account, you must have:
- a statement of annual wages and expenses paid (Sammenstilling),
- a pre-settlement statement (Skattemelding, which is sent by the Norwegian authorities),
- account statement (sent by your bank),
- confirmation from the school/ kindergarten
- confirmation from the bank/institution from which you have taken out loans,
- confirmation from an institution where you hold securities, deposit.