Yearly VAT return
There is an opportunity for smaller companies to reduce the administration associated with submitting the VAT task (paying) only annually. It saves the smaller company some time, and at the same time, It has a cash flow advantage.
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What are the requirements in order to qualify for a yearly VAT return?
If a company has had a turnover of less than 1 million NOK in the last twelve months, it can, in certain cases, apply for an annual VAT extension. The requirements to get an annual VAT term are the following:
- Annual turnover of less than 1 million NOK (both for the previous year and the coming year)
- The company must have been VAT registered for more than one calendar year.
- The company has submitted the previous VAT returns at the right time and in the right way every second month in a calendar year.
How does the annual VAT term work?
The annual VAT term works so that you only have reporting obligations annually instead of every two months. It saves time and administration.
Something important to note is that the VAT settlement is also annual. This means that it must be paid on 10 March of the following year.
What is a VAT term?
A VAT term is a period for which a VAT notification applies. All of the economic activity subject to VAT that has taken place during this period forms the basis for the VAT return. Usually, you have a VAT deadline every two months, so that is January – February. The VAT statement must only be completed annually if you have received an approved application and you meet the requirements. It is also worth noting that the deadline for applying for an annual VAT term is 1 February for the current year. The deadline for paying the annual VAT amount is 10 March.
How to apply for an annual VAT return in Norway?
The process for applying for an annual VAT term consists of 3 steps:
- Gather all the necessary information.
- Submit the application form via the tax authority’s portal Altinn.
- Wait: It usually goes quickly, but it can take up to 2 weeks to receive a response to the application for the annual VAT term.
Once, you have received approval, you switch to the annual term, of course. You must still have control over all account books and receipts. The information obligation is no less for the annual VAT term. However, the paperwork is somewhat reduced.
Otherwise, VAT is calculated as usual. It is only the time at which the VAT return must be submitted that has changed. Of course, there is also the cash flow advantage
What happens if you earn more than 1 million NOK?
If, against all expectations, you earn more than NOK 1 million during the year; then you are obliged to inform the tax authorities about it and go back to the regular term. This means that the VAT terms will be every other month.
In Eurofiscallis, we can assist you in figuring out if you qualify for an annual vat return or not. Do not hesitate to contact us.
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