Cross-border e-commerce and VAT – new rules in Norway (EN)
Foreign online stores and marketplaces that desire to remain attractive to Norwegian consumers should urgently take steps to register in the new VOEC scheme before 1 April 2020.
Effective 1 April 2020 a new system will be put in place. Under the new regime, goods of a value under NOK 3,000 may be sent to Norway without custom clearance, provided the seller has applied Norwegian VAT. Restricted goods, foods or foodstuffs or goods subject to excise duties will not qualify for the new scheme. Instead of the consumers paying VAT at the point of importation (border collection), the seller collects Norwegian VAT at the point of sale and reports and pays the VAT to Norwegian tax authorities.
Sellers (online stores and marketplaces) must now take steps to register, charge and pay VAT to Norway. A simplified registration scheme, called VOEC (VAT On E-Commerce), is introduced for foreign sellers. The VOEC scheme has similarities with the EU VAT e-commerce package that enters into force 1 January 2021, but is not identical. The VOEC scheme applies to sales of both goods and electronic services. Sellers already registered in the VOES scheme (VAT On Electronic Services) can use their current registration for reporting and paying VAT on low value goods. Registration may be performed on the following site: www.skatteetaten.no/voec.
In recognition of the short timeframe until 1 April 2020, Norway will introduce transitional provisions to ease compliance in the implementation period. Sellers may on request be given time to make necessary technical system adjustments needed to provide necessary shipment information with the VOEC consignments and to calculate and collect VAT on the following conditions:
- The seller must register in the VOEC scheme. Sellers do not need to be fully compliant by 1 April 2020 to register in the scheme; partial compliance is acceptable in a temporary period. (The registration has been open since 17 February 2020).
- The seller must confirm an exemption is needed due to technical facilitation etc., and on request, provide documentation that they have taken reasonable steps to comply with the VOEC scheme.
- The seller must inform the tax authorities about the estimated date of final compliance with the VOEC scheme.
If a seller fails to comply with the rules of the VOEC scheme, the goods shipped to Norway will be subject to taxation at the border, the carrier or forwarder will charge the customer an extra fee for customs clearance, and the delivery to the customer might take longer time.
Sellers which on a regular basis ship good of a value above NOK 3,000, typically select to register a representative office in Norway to become subject to register under the ordinary VAT scheme of Norway. Sellers without place of business in Norway from countries with an agreement on mutual administrative assistance, can register directly in the VAT Registry. Sellers from other countries must register through a representative.
It may be expected that Norwegian consumers will hesitate to buy from sellers that do not offer the simpler VOEC scheme. We recommend that foreign sellers that wish to remain attractive to Norwegian consumers should urgently take steps to be prepared for 1 April 2020.