Norway: VOEC – VAT On E-Commerce
From 1. April 2020 new e-commerce VAT rules were implemented in Norway, requiring foreign sellers and online marketplaces to register, declare and pay VAT on low value goods (below NOK 3,000) sales to Norwegian consumers (B2C).
Registered businesses preferred by Norwegian consumers
The VOEC scheme makes it easier for Norwegian consumers to buy low value goods in foreign online stores, as VAT is paid directly in the online store and the consumer doesn’t have to pay customs fee and VAT once the goods is received in Norway. This makes e-commerce from abroad easier for consumers, and gives consumers a better overview of how much a trade actually costs. Thus, consumers will likely prefer to buy from foreign companies and online marketplaces registered in the VOEC scheme. Companies registered under the VOEC scheme is published by the Norwegian Tax Authorities, making it easier for Norwegian consumers to find and buy from registered suppliers. It’s likely that registered suppliers will be preferred by Norwegian consumers, over non-registered suppliers.
Choose between registering in the VAT Register, or the simplified scheme for low value goods
Suppliers can register in the VAT Register, or through the simplified scheme for low value goods. Registering through the simplified scheme makes both the reporting and customs clearance easier, and there’s also an exemption from custom duties for goods usually subjected to such duties. However, for goods with value at or above NOK 3,000, foodstuffs, restricted goods, and goods subject to excise duties, the simplified scheme (VOEC) will not be available
For suppliers with items both below and above the NOK 3.000 threshold, two different procedures apply. Goods of value below the threshold must be sold including VAT, while the customer must import goods with higher value (leaving the customer responsible for paying VAT and customs duties).
Once registered either in the VAT Register or through the VOEC scheme, the supplier must charge VAT to the customer on the point of sale. Be aware that the NOK 3,000 threshold of the VOEC scheme applies per item – not per invoice or transaction.
To ease the implementation of the new rules, suppliers may on request be given time to make the necessary adjustments. Additional time may be granted on the following conditions:
- The supplier must register in the VOEC scheme (partial compliance is acceptable in a temporary period).
- The supplier must confirm and document that exemption is needed due to technical facilitation etc.
- The Tax Authorities must be informed of the estimated date of final compliance.
Foreign companies already registered in Norway through ordinary VAT registration (e.g. by foreign entity or branch) may consider to switch to the VOEC scheme, as the reporting is easier. Especially for suppliers of clothes, due to the exemption of the ordinary customs duty rate for clothes of appr. 10%. However, the switch may have certain commercial and practical consequences, and it’s recommended to conduct a proper evaluation of a potential switch.
Our firm assist with evaluations of such a switch and with the registrations process. For further information or assistance, please feel free to contact us.
The article is written by Cecilie Sjursen and Ella V. Brenden.