Taxation and licences
VAT – who and when
The Tax Office maintains records of businesses that are obliged to pay VAT (the VAT Register), and has the responsibility for administration and control of VAT.
The part 2 of the Combined Register Return is dedicated to companies that are affected by the VAT regulations, and it is your duty to register. If the business, after the initial registration, is changed so that goods and services that are VAT eligible are included, the mentioned part 2 is submitted separately.
All people running businesses that sell goods or VAT eligible services are obliged to register in the VAT register when the turnover exceeds NOK 50 000 over a period of 12 months.
If you are registered in the VAT register, you are allowed to deduct VAT from the cost of the goods and services used in your own VAT eligible business.
For charity and public institutions and organizations, the registration limit is
NOK 140 000.
General rule
A complete presentation of the rules governing VAT is found in the Act no. 66, ”VAT Act”. The general rule is that VAT (output tax) is calculated on all sales of goods and services, except health services and educational services. VAT on goods and service bought (input VAT) is deducted from the calculation.
Certain expenses do not qualify for deduction of input VAT. Among these are food expenses, payment in natural goods and representation expenses.
All input VAT deductibles must be qualified by genuine documentation, e.g. invoices, sales documents etc.
When goods are imported, the customs declaration8, together with an account statement from the customs treasurer, serve as documentation of deductible input VAT.
Provided cash payment of the imported goods, the import declaration, stamped by the customs treasurer/office will serve as documentation of deductible input VAT.
Foreign businesses engaging in activities which are liable to VAT registration shall calculate and pay VAT according to the same rules as Norwegian businesses.
VAT shall be paid on the sales of all goods and services, unless they are specifically exempted from VAT liability. VAT is also charged on the withdrawal by the owner of goods and services from his own business when such goods and services are for private use or for other purposes falling outside the scope of the VAT Act.
The supply of certain goods and services are exempted from VAT, for example sales and letting of real property and rights to real property, financial services, health services, social services and educational services. A wide range of services in the cultural area are exempted. The same applies to certain services in the tourist business, like guide services. Taxable entities with only exempted sales shall not register for VAT and do not get credit for input tax on purchases.
Some sales of goods and services are exempted from output VAT, but qualify for deduction of input VAT under certain conditions. Such conditions include for instance sales of goods and services abroad, sales and services to foreign ships or Norwegian ships engaged in foreign trade, to aircrafts in international routes and sales and services for use in the offshore petroleum industries. Note that companies engaged in such sales still are obliged to register for VAT.
VAT shall be calculated and paid on the importation of goods. For the purpose of VAT liability, it is irrelevant whether a consumer or a taxable entity imports the goods. VAT must also be paid on the purchase of services from abroad. Liability for VAT exists if the purchaser is a taxable entity or a public institution and the service would be liable to VAT if supplied in Norway. Apart from electronic communications services, this does not apply to private consumer purchases.VAT rates
The standard rate of VAT is 25 per cent. The rate of VAT on the sales of foodstuff is 14 per cent. The rate on public transport, on letting of rooms in hotels, motels and tourist cabins etc., and the hiring out of camping areas, cabins, and holiday flats is 8 per cent.
Registration in the VAT Register
Both foreign and Norwegian businesses supplying goods and services in Norway, shall register in the VAT register when their sales or withdrawals of such goods and services exceed NOK 50 000 over a period of 12 months. A written notice of the business activities shall be sent to The Central Coordinating Register for Legal Entities (CCRLE) or to the Tax Office where the foreigner (or his representative) has his place of business/residence. The written notice shall be given by filling in the registration form «Combined Register Return» part 1 and 2. If the business is already registered in CCRLE and has given all the necessary information to this register, only part 2 of the registration form shall be filled in.
Registration by the use of a representative
A foreign
The only requirement the representative must satisfy is that he or his business is resident in Norway. For instance, it is not required that the representative is a qualified auditor or accountant etc.
Both the foreign business and the representative shall sign the registration form.
The foreign business must keep a complete account for its taxable activity in Norway. The representative shall keep a separate complete account for the supplies in Norway (purchases and supplies) by the foreign business.
The invoices for the foreign business’ supplies in Norway shall be sent through his representative. The representative shall mark the invoice with his own name and address, the foreign business’ registration number (organization number) followed by the letters MVA and the VAT (output tax) for the total supplies. The invoices shall be issued in at least 3 copies, and at least one of them shall be kept by the representative.
Both the foreign business and the representative are responsible for the calculation and the payment of the VAT.
Obligations and rights
A business established or resident in Norway must carry out its bookkeeping according to the Norwegian accounting acts. Norwegian and foreign businesses that are registered in the VAT register shall calculate and pay VAT (output tax) on their supplies of goods and services in Norway. A foreign business is entitled to deduct VAT paid on goods and services which are to be used in his Norwegian business (input tax). The right to deduction also includes VAT collected by the Customs Authorities at the importation of goods and VAT paid on the purchase of services from abroad.
The VAT return must be submitted and VAT be paid one month and ten days after the end of each period, see the VAT Act Chapters 8 and 9.More information
For additional information, please refer to the brochure titled Guide to Value Added Tax in Norway. The VAT provisions are laid down in the Act relating to Value Added Tax of 19 June 1969 no. 66. Both are available from the Norwegian Tax Administration website at www.skatteetaten.no/. Note that the guide and translated Act may not reflect the latest amendments to the Act (1 July, 2007).
Further information can be obtained from the tax offices.
Special conditions
Foreign suppliers of electronic communications services are obliged to calculate and pay Norwegian VAT when such services are supplied to private individuals and other persons that are not engaged in business or public institutions, and who are resident in Norway. In these cases VAT shall be calculated and collected by the foreign supplier through a representative who must have his residence or his place of established business in Norway
Some types of businesses require special licences. Some of these licenses are described in this section.
Authorization
Some types of businesses require that the owner or responsible person has the required authorization. Such authorization is required for:
Driving instructors
Doctors
Physiotherapists
Auditors
Accountants
Lawyers
Stock brokers
Bond brokers
Real estate brokers
Travel agencies, Travel Organizers etc.
To run a business arranging travels, you are required to raise guarantees consisting both of individual and collective guarantees. Questions related to travels and travel guarantees are directed to the Reisegarantifondet, in charge of administering the required guarantees.
Catering businesses
In order to run a catering business, such as café or restaurant, you must have authorization from the municipality where the business is located. The local branch of The Norwegian Food Safety Authority (Mattilsynet) must accept the premises and the business, before authorization is given. Also, the manager cannot have a criminal record.
Licence to serve alcohol
Serving alcohol for payment requires a special licence from the municipal authorities. The licence is given to each place individually.
Contact the municipal administration for further information.
Transport business
To start and run certain types of such businesses requires a licence. Application is submitted to the transport board of the county. Licensed businesses include:
Taxi driving
Ambulance driving
Buses and other types of public transport
Currency regulations
Payment abroad
When money is transferred between Norway and a foreign country, a declaration of payment (betalingsmelding) must be filled in. The currency bank fills in the form, but the customer is responsible for the validity of the contents of the declaration. The bank is required to demand proof of identity from the customer when the amount of money transferred abroad exceeds NOK 10 000 and NOK 40 000 to Norway. If the transfer exceeds NOK 60 000, the customer is required to divulge the cause of the payment.
Foreign bank accounts
When an account is established abroad, the Norwegian Bank (Norges bank) must be notified. All transfers to and from the foreign account must be reported to the Norwegian Bank. In addition, you are required to declare, in writing, that the foreign bank may submit information about the account to the Norwegian Bank.
Further information may be requested from the Norwegian Bank.
Concession/licence
Buying or renting a home, a cottage or other property to be used in a business does normally not require a license if you have permanent residence in Norway. You must, however, submit a declaration stating that you fulfil the
The Tax Office will also inform you about the status of the property with respect to license.
The
When you apply for license for buying or renting a large property, you must fill in the application form «Application for license to obtain land» («Søknad om konsesjon på erverv av fast eiendom»). The application form may be obtained from the farming office (landbrukskontoret). The application is sent to the mayor of the municipality where the property is located. In Oslo, the application is sent to the Manager of Property (eiendomssjefen) of Oslo Municipality.
Building licence
In order to raise a new building or do other building jobs, such as altering the facade, erecting a new supporting wall or demolition of a building, an approval is needed from the municipality. Approval is also necessary in order to alter the usage of a building, e.g. converting from living quarters to offices.
If in doubt about the necessity of an approval, you ought to contact the building authorities of the municipality before any building job is commenced. An application for licence will be treated in a period of a few weeks to several months.
Check if the municipality has local schemes for people who want to start their own business
Identity cards in the building and construction industries
The introduction of identity cards is a measure aimed at achieving more efficient control of employees’ health, safety and working environment as well as greater accountability in the construction industry.
All enterprises, whether Norwegian or foreign, performing work on building and construction sites are required to issue ID cards to their employees. The ID cards must also be used by sole proprietorships (
Te requirement even applies to personnel who perform support functions such as cleaning, catering etc. where such support functions are permanently established at the building or construction site. Also people who transport goods to the site must be issued with ID cards if such transport takes place on a regular basis.
Condition for the issuing of ID cards
It is a condition for the issuing of ID cards that the enterprise and employee are registered in the relevant public registers. The relevant registers in this context are:
• The Central Coordinating Register for Legal Entities
• The VAT Register
• The NAV State Register of Employees and Employers
• The Central Office for Foreign Tax Affairs (in Norwegian)
• The National Population Register (in Norwegian)
Information about which registers the individual enterprise or employee is obliged to register with can be obtained by contacting the individual registers or the Service Centre for Foreign Workers in Oslo.
The ID cards are issued by Norsik AS, which is also charged with the task of checking submitted information on behalf of the authorities. An ID card will only be issued if the applicant is correctly registered in the relevant registers.
Schemes for Entrepreneurs
Many municipalities have established local schemes for entrepreneurs. Contact the local administration for further information.
If you are running a business as hairdresser, bricklayer, carpenter etc., you may get some financial support for hiring apprentices. Contact the local jobcentre (NAV) for further information.
