Companies selling low value goods to consumers (B2C) in Norway now have to charge and settle VAT in Norway. Here’s a guide on how to get started.
With the new VAT rules for import of goods to Norway, Norwegian customers can from 1 April 2020 no longer import low value goods from abroad VAT free.
If you’re already selling to Norway or if you have any plans to start, it’s recommended that you register with the Norwegian Tax Administration, charge Norwegian VAT at the point of sale and then report quarterly with the Norwegian tax authorities.
In order to be able to report VAT to the Norwegian tax office, you can register either in the Norwegian VAT Register, or through the simplified scheme for low value goods, VOEC. (VAT on E-Commerce).
Registering through the simplified scheme (VOEC) is favorable if your turnover in Norway doesn’t exceed NOK 50,000 during a 12-month period, as it has fewer administrative burdens than the VAT Register does.
Follow this guide to find the information about the registration process, reporting of the VAT and settling with the Norwegian tax authorities under the VOEC scheme.
1) Register your company under the VOEC scheme
The first step in this process is to register under the simplified scheme for low value goods (VOEC) which will be in effect from the 1 April 2020.
Please notice that the VOEC scheme doesn’t apply for the for goods with a value over NOK 3000, as well as foodstuffs, alcoholic beverages and tobacco products. These goods will be subject to border collection of VAT, excise duties and customs duties. In this case, the carrier might charge a customs handling fee in addition to the VAT and customs itself.
You’ll still be able to sell and ship to Norway, even if you decide not to register your company under the VOEC scheme or with the Norwegian VAT Register. It is your Norwegian customer/receiver that will be charged for the sum of VAT, customs and carriers’ customs fees. This would also mean that the shipment would take longer time to reach it’s receiver.
2) Calculate and charge VAT at the point of sale
Provided the items sold each have a value below NOK 3 000 (item value, not invoice/shipment value), you will need to charge the applicable VAT rate. The value of the item at the time of sale is essential. Note that any additional corts, such as shipping and insurance costs, if applicable, are to be included in the VAT calculation, but not when determining whether the sale is within the threshold.
The standard Norwegian VAT for goods is 25 percent. Click here to find standard rates for VAT.
3) Mark the shipments
After registering under the VOEC scheme, you have to make sure that the shipments to Norwegian consumers are marked with the VOEC identification number provided to you. The shipment must still contain all the relevant information to ensure correct customs clearance, the same way you’ve done it so far which you have done so far through your Shipmondo account.
In order for the shipment to be labeled correctly with your sender EORI No./VOEC No., please contact Shipmondo’s customer service at firstname.lastname@example.org and provide this number to us. We’ll note it on your freight agreement and make sure it’s sent to the carrier electronically for all of your future shipments. In other words, you don’t need to take any further steps to ensure that your shipments are marked correctly according to the VOEC scheme.
If the parcel cannot be identified as within the VOEC scheme, there are risks of delayed border crossing and double taxation. To ensure fast custom clearance and avoid the risk of double taxation, the sender of the VOEC goods needs to make sure that the relevant information about the parcel and its contents is available for the carrier and the Norwegian tax authorities. If you attach the pro forma invoice from Shipmondo like you’ve always done, the tax authorities will have the information they need to process the shipment.
The VOEC verification is currently supported for some of PostNord’s freight products, but other carriers are working on a solution. Contact us for more info.
4) Report and pay VAT quarterly
VAT needs to be reported and paid quarterly to the Norwegian tax authorities. The VOEC reporting period covers a calendar quarter which begins on 1 January, 1April, 1 July and 1 October. The deadline for submission of reports and payments is 20 days after the end of the quarter.
To determine whether VAT applies for a specific item, you have to look at the value of the item at the time of sale. Sales made in another currency than NOK must be converted at the point of sale to determine whether the value is within the threshold.
Applies for goods sold from 1 April 2020
The new VOEC scheme applies for goods sold from the 1 April 2020 onwards. It doesn’t apply for sales registered before this date (unless VAT is applied according to the current rules) even though the goods haven’t reached Norway til after the 1 April 2020.
Read more about the VAT rules and the VOEC scheme for export to Norway.