Changes on Norwegian VAT following Brexit

What will happen after Brexit in Norway?

As announced by the Norwegian Ministry of Finance in December 2020, UK-established companies will be relieved to know that there is no requirement for them to re-register for VAT purposes in Norway after Brexit. Keeping in mind that Norway is not a part of the European Union but part of EEA, only certain changes can be expected to impact Norwegian VAT registered businesses.

Fiscal representative obligation in Norway

In an announcement made in 2017, The Norwegian tax authorities waived fiscal representation obligations for businesses located in most EU countries (including Belgium, Czech Republic, Denmark, Finland, France, Germany, Iceland, Italy, Malta, Netherlands, Poland, Portugal, Slovenia, Spain, Sweden, and the UK). Foreign businesses required to VAT register in Norway enjoyed this simplification and were permitted to directly register there for VAT purposes.

With the new declaration, UK businesses can continue to benefit from this waiver and will not have to register again with a new VAT number and fiscal representative.

Fiscal representatives in Europe after Brexit

As the transition period ends for Brexit, some EU countries will require UK-established companies to appoint a fiscal representative. This fiscal representative will be necessary to obtain a VAT number and will be jointly and severally liable for the businesses’ tax obligations. In other words, if the taxpayer does not pay the VAT due, the fiscal representative will be responsible for paying this debt.

As the UK will be considered a non-EU country starting from 1 January 2021, UK businesses can expect the need for fiscal representation in the countries that already require it for non-EU companies – check these requirements here. However, some countries, such as France, that normally require fiscal representation for foreign businesses waived this obligation for UK companies. Several Member States are currently evaluating a waiver of this requirement for UK businesses, but official communications are not published yet.

The complications

UK businesses that are already VAT registered in EU countries can find themselves in a tricky situation. In some countries, businesses would need to cancel their preexisting VAT number and apply for a new one with a fiscal representative appointed. As mentioned above, Norway has waived this obligation, but that is not the case for all countries.

Additionally, obtaining a new VAT number would imply systemic changes – updating your billing processes and ERP systems, as well as informing the relevant parties involved in your supply chain.

How can Marosa help you?

Our pan-European approach means that you can consolidate all of your fiscal representation obligations into a single firm, having our compliance center be your point of contact with our local entities. In this way, having multiple representatives across different EU countries with various reporting formats, languages and pricing can be avoided.