VAT

VAT on electric vechiles in Norway

In Norway, from 1 Jan 2023 VAT on an electric vehicle will be charged for the part over the threshold of five hundred thousand Nok (of the purchase value). Then, the car will be subjected to the standardised rate. So put in simple terms, if you pay 500.100 NOK for an electric vehicle in Norway, the VAT on that vehicle will be 25 kr. That also means that all cars that are not bought for more than five hundred thousand kroner are going to be VAT free.

Published : 22/02/2023
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Time to read : 3 min

The government's decision

The government’s reasoning for the decision is that electric vehicles have been VAT free for a while now. Norway has long been the leading country in the new sales of electric vehicles on the European continent. In a fair part due to the zero per cent VAT on the vehicles. Compared to the 25 per cent on the other vehicles in Norway. The government believes that the zero per cent VAT rate is no longer needed.

If you are a private individual, the only practical consequence is that the price goes up. But as a business, the VAT on electric vehicles is paid to the supplier (car dealer). The car dealer calculates the VAT, and pays it consequently through the VAT return.

I have an electric car where the VAT hasn’t been paid.

There is no requirement to register VAT on your electric vehicles after you have received them. Put in other words, the VAT on electric vehicles doesn’t work retroactively. However, if you are a (car) business and you brought many cars from abroad before the 1st of January without calculating the VAT price, VAT on the cars still has to be paid when they are sold. The moment when the cars are legally in the owner’s hands is when it is registered to them in the driving and licensing registry (motorvernsregisteret). This is the point when the owner consumes ownership of the vehicle and is responsible for insurance purposes. Put in a concise way, if your cars aren’t registered on the owners before the 1st of January of 2023, you have to calculate VAT on them.

Summary

In Norway, the VAT on electric vehicles is introduced in 2023 and will start at values over five hundred thousand NOK and then be subject to the Standardised rate, of VAT rate which is 25%. All electric vehicles costing more than 500,000 NOK will be subject to the 25% VAT rate on the value exceeding five hundred thousand NOK. The government’s reasoning for this change is due to the fact that electric vehicles have previously been VAT-free, making Norway the leading country in Europe for electric vehicle sales. The VAT must be paid via a VAT return form for businesses, while private individuals will simply see a price increase. If a business bought electric vehicles from abroad before January 1st, 2023, without calculating the VAT, the VAT still needs to be paid. The VAT does not work retroactively but must be paid when the vehicles are legally in the owner’s hands and registered in the driving and licensing registry. If the cars aren’t registered before January 1st, 2023, the VAT must be calculated on them.