VAT rates in Norway
In Norway, there are different VAT rates depending on the type of services or goods you are selling in Norway. The list of VAT rates in Norway is the following:
- Standard rate: 25%
- Reduced rate: There is a 15% special rate for food.
- Low rate: 12% for specific food items, books, and newspapers.
- Zero rate: 0% for certain goods and services such as exports, international transportation and financial services.
The standard Norwegian VAT rate
The standard rate applies in principle to all goods and services. Such as mobile phones and legal services. It is important to note that understanding the different VAT rates in Norway is important, because non compliance can result in fines and interest. A company must charge 25 per cent in VAT for goods and services sold in Norway. The main rule is 25% unless one of the other categories applies. In certain B2B purchases, the VAT can be refunded. The different items that have a twenty-five per cent VAT rate are, among other things:
- Most goods and services provided by businesses, such as goods and services in the retail, service, and manufacturing sectors
- Rental of buildings and property
- Food and drink sold in restaurants, cafes, and bars
- Accommodation services, such as hotels, motels, and bed and breakfasts
- Entertainment services, such as concerts, theatre performances, and sports events
- Professional services, such as legal and accounting services, even when the supplier is non Norwegian based company.
- Streaming services (like Netflix)
- Construction and renovation services
- Telecommunications services
- Insurance services
- Advertising services
- Cosmetic surgery
The reduced Norwegian VAT rate of 15%
Food products (like when bought in supermarkets etc) have a rate of 15%. Items that can be considered for consumption for hhuman beings are considered as food itms. Food products includes drink items, food supplements, but also OTC medication. Please note however, when they are served in a restaurant or coffee shop, they become a service at attract 25% VAT. However, tobacco, alcoholic drinks and medications are not considered food items in this sense and do attract different VAT rate.
The reduced Norwegian VAT rate of 12%
There is also a reduced VAT rate in Norway of twelve per cent.
This rate is applied as a method for the government to influence and guide buyers’ behaviour. The reduced VAT rate applies to the following items:
- Passenger transport services
- Admission to cultural events and museums
- But also cinema, and other event parcs
- Rental of rooms (like hotel room
Reduced rate of 0%
This reduced rate is used for specific items where the government wants to stimulate consumer behavior:
- Books (including e books)
- Funeral services
- Transport where it starts in Norway but ends abroad (typical flight tickets)
- Goods or services delivered to the oil industry. (under spefic circumstances.
- Other items are export
It is important to note that this list does not include everything. For more detailed and up-to-date information, please contact us here.
When the 0% is valid, it still means that the company has to report on this. It also means that the company selling at 0% is entitled for VAT deduction. There are also certain goods and services in Norway that don’t require VAT. However, it is important to note that if your business provides these services, it still has to be reported on your VAT declaration form. Even though no VAT has to be charged, it is essential to note that this is not an exhaustive list, and for a detailed, correct and up-to-date answer, you should contact us.
Certain goods and services are exempted from VAT. These are all services and products within health care. Recent years new clarification have been made. F.e. cosmetic surgery is not considered as a health care service and is hence not exempted from VAT. When goods or services are defined as VAT exempted, then the input VAT related to this cannot be deducted either.
How to comply with all of the Norwegian VAT rates?
To comply with the VAT (Value-Added Tax) rates in Norway, businesses should take the following steps:
- Understand the VAT rates: Businesses should be aware of the standard, reduced, and zero VAT rates that apply to their goods and services and ensure they charge the correct rate.
- Register for VAT: Businesses are required to register for VAT with the Norwegian Tax Administration if their annual turnover exceeds a certain threshold.
- Keep accurate records: Businesses are required to keep accurate records of all sales and expenses, including invoices, receipts, and bank statements, to support the VAT returns they file.
- File VAT returns: Businesses are required to file regularly VAT returns with the Norwegian Tax Administration, typically on a bi monthly basis.
- Pay VAT: If the VAT liability is positive, the business must pay the VAT to the Tax Administration. If the VAT liability is negative, the company will be able to claim a refund.
- Audit: The Tax Administration may conduct regular VAT audits to ensure compliance with VAT laws and regulations.
- Seek professional advice: Businesses should seek professional advice if they have doubts about VAT compliance or need clarification about which VAT rate applies to their goods and services.
Do you think this sounds complicated? You are not alone. At Eurofiscalis, we assist hundreds of companies that want to use specialists to handle their VAT declarations. This means they can do more of what they are experts at while we ensure your VAT is handled.