VAT Rates in Norway

VAT deduction limits in Norway

Input VAT is generally deductible provided the following conditions are met:

• The goods or services are used for business purposes
• The transaction is duly documented in a VAT invoice.
• Additionally, the payment must be made through a bank transfer, unless the total amount is less than NOK 10,000.
• Businesses can only claim VAT from purchases where the seller is registered in the VAT register and where the sales document contains the supplier’s organization number and the letters MVA.

The statute of limitations is three years.

Examples of expenses that are non-deductible are entertainment expenses, tobacco and alcohol, restaurant and catering services, advertising gifts, expenses related to motor vehicles, and construction or maintenance services of immovable property.

VAT deduction limits are regulated in Section 8 of the Norwegian VAT law, while the need for a VAT invoice to be eligible for deduction is included in section 15-10 of the Norwegian VAT Act. Learn more.

Statute of Limitations in Norway

Norway sets different statute of limitations depending on whether we refer to the time for the tax administration to inspect past periods, or the time taxpayers have to claim input VAT.

• The statute of limitations is five years when it concerns the period on which the tax authority can go back to review the information declared, and apply additional VAT assessments, penalties or interests. This period may be extended up to 10 years if the taxpayer voluntarily corrects previous tax periods.
• However, the taxpayers have three years to claim VAT incurred in Norway.

Time of supply (or tax point rules)

The tax point is the time when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.

• General rule: The general tax point is by the time the goods are delivered and the services are performed.
• Invoice date: Invoices may be issued within one month after the date of the delivery of the goods or the provision of the services. In this case, the time of supply may be deferred, so the tax point corresponds to the invoice date.
• Continues supplies: similarly, for continues supplies, an invoice must be issued up to the 15th working day following the month of delivery. In this case, the time of supply may be deferred, so the tax point corresponds to the invoice date.
• Partial and advanced payments: generally, do not impact on the tax point. The general rule continues to apply.
• Import: Tax point occurs when the goods are imported according to the relevant import documents.

Use and Enjoyment Rules

Norway has not implemented the use and enjoyment rules.

Bad Debt relief in Norway

Bad debt refers to an unpaid invoice for which the Supplier has paid the VAT to the tax administration: this is, an invoice has been issued with VAT, reported in the VAT return and the VAT amount has been paid to the tax authorities but the whole price has not been collected from the customer. This is often due to the client´s bankruptcy, insolvency or simple missed payments to suppliers. In these cases, most countries offer the possibility to recover the VAT initially paid to the authorities, however, the conditions vary from one country to another.

Bad debt relief refers to the possibility of recovering the VAT from unpaid invoices. Norway allows for bad debt relief. The condition is that the debt must be regarded as indefinitely unrecoverable from the recipient of the supply:

• There is no need to proof insolvency from the customer, but it should be evident that the debt is irrecoverable.
• The loss is recorded on the customer’s account and a special list must be made, including the date, name of the customer, the amount in question.

You may refer to section 4-7 of the MVAL and article 4-7-1 of the Norwegian VAT Regulation.

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