I. Methods of issuing invoices in Norway
II. How to settle a traditional invoice in Norway?
III. E-invoicing in Norway
IV. E-invoices for tax payments in Norway
V. VAT in Norway
VI. VAT rates in Norway
VII. VAT obligations in Norway
VIII. Filing VAT returns in Norway
IX. VAT representative in Norway
X. Removal from the VAT register in Norway
Invoice NorwayAn invoice is not just a settlement document. It is also an important legal act confirming the transaction between the two parties. It acts as a contract between you and the seller, specifying that you agree to pay a certain amount of money for the goods or services provided.
Understanding your invoice is crucial not only to knowing what you are paying for, but also to resolving potential disputes and misunderstandings with the seller. This also helps you monitor your financial obligations and ensure that you pay your debts on time, which in turn can prevent additional costs associated with delays.
It is important for businesses operating in Norway to follow proper invoicing and e-invoicing practices to ensure accurate reporting and compliance with VAT regulations. Invoices must contain specific information, and e-invoices must meet specific standards, such as EN 16931, EHF, Peppol BIS formats. These standards aim to ensure that e-invoices are secure, comprehensive and accurate.
To meet the conditions for deducting input VAT, a Norwegian company registered as a VAT payer must have appropriate invoice documentation. The entrepreneur is obliged to issue invoices to customers who are registered as VAT payers for all supplies subject to VAT.
I. METHODS OF ISSUE INVOICES IN NORWAYTo issue invoices in Norway, you must have a registered company in Brønnøysundregistrene, which allows you to obtain an organizational number and have a company bank account. Natural persons are not authorized to issue invoices.
In Norway, it is not possible to set the invoice number yourself. This means that there are only two ways to issue invoices:
- Using a computer/invoicing system where the invoice number cannot be set yourself.
- Using invoices with numbers already printed on them.
The simplest solution for VAT invoices may be to use a tax program that automatically generates and sends all invoices (immediately after the sale is completed) and stores them for you in the cloud.
What elements should an invoice in Norway contain?
Under Norwegian VAT and accounting regulations, invoices must meet strict standards, which are precisely set out in BOKR 2004, in sections 5-1-1, 5-1-1a and 5-1-2. These include:
- Organization / company name, address, logo - the most important element that should appear on the invoice is the company name, placed directly at the top of the Norwegian VAT invoice template. Please make sure that this name is identical to the one on your VAT registration document. This section should also include information regarding the physical address of the company (seller), along with a telephone number and other contact details (such as e-mail, fax, etc.) that will enable communication with the company. Optionally, you can include your company logo.
- VAT registration number - the company name should precede the VAT registration number. This benefits both the buyer and the seller. For the seller, this makes it easier to submit VAT returns, and for the buyer, especially if it is a company, it makes it easier to claim a refund of the VAT paid. Additionally, this is a requirement for a VAT invoice in Norway.
- Invoice issue date - the date when the VAT invoice was created.
- Invoice number - a unique serial number that facilitates clear identification of the invoice.
- Due Date - If your invoice is due in the future, please provide this information in this section.
- Purchase order number (order number) - exact number, compatible with the Norwegian VAT invoice format. In some cases, a business customer may request products or services via an order form and the same document number (i.e. order number) may be provided in this section.
- Description - This part of the invoice includes a list of all goods sold and/or services that are provided to the customer. It is worth providing as much information as possible to avoid misunderstandings.
- Price and quantity - for each item on the invoice, you must provide the number of units (quantity) and the unit selling price.
- Taxes - in this section you should indicate the type of tax, and in the case of Norway it would be VAT, along with the appropriate tax rate. If taxable sales (i.e. sales subject to VAT) and non-VAT sales appear on the same invoice, it is necessary to specify these types of sales on separate lines. In case of different VAT rates, they must also be indicated separately on the invoice.
- Notes - This section of the invoice contains any additional information you would like to share with the customer, such as delivery schedule, vehicle number, etc. It is worth noting that this section is not mandatory to complete. You can leave it blank if the information is not important.
- Terms and Conditions - This section is the last but most important part. The terms of delivery of products and services should be clearly presented, as well as detailed information regarding return policies and payment terms. This will help protect you against possible legal problems.
Simplified invoice in Norway
In Norway, if the value of the supply is less than NOK 50,000, taxable companies are entitled to issue simplified invoices. These invoices must be kept for a period of 5 years and contain only the following information:
- Reference number
- Seller's name, address and MVA identification number
- Details of goods or services
- The total value of remuneration and the amount of VAT.
According to the Accounting Act 2006, an invoice for a delivered good or service must generally be sent no later than one month after the delivery in order to record costs/income in the appropriate period.
It is also possible to backdate an invoice, which means that invoices issued within the first 15 business days of a month can use the last date from the previous month if the service or goods were delivered in the previous month.
This principle is clearly stated in paragraph 5-1-3 of the Accounting Regulation, Part Three.
II. HOW TO REGULATE A TRADITIONAL INVOICE IN NORWAY?If you receive a traditional invoice on paper or by email, there are several payment methods to choose from:
- Online Banking: This is one of the most widely used methods today, and for a reason. With just a few clicks, you can easily pay your invoices from the comfort of your home or while traveling. Just log in to your bank's website or app, enter the necessary invoice information and confirm the payment. Some banks also offer the option of scanning a paper invoice using a mobile camera, which makes the process even easier.
- Giro: Although this method has lost popularity with the development of digital solutions, there are still those who prefer this traditional method. With giro, you fill out a pre-printed form with your payment details and deliver it to your bank or post office.
Regardless of your chosen payment method, it's always a good idea to double-check your payment information. Even a small error can result in funds going to the wrong account or the incorrect amount being transferred. This can not only lead to additional work and stress, but also generate additional costs if the error is not noticed in time.
- Set up regular deductions: For those of us who have fixed monthly expenses, such as electricity or internet bills, it may be beneficial to set up a standing order on a current account with a bank. Thanks to this, you will always be up to date with your payments, avoiding possible delays and additional fees.
- Check the due date: This may seem obvious, but it's always worth double-checking the due date on your invoice. Delays in making payments can generate additional costs in the form of fees and interest, so it is important to be aware of this deadline.
- Ask for an extension: Life can be unpredictable. If you find yourself in a situation where you are unable to pay your invoice on time, it is important to contact your supplier in advance. Many suppliers value communication and may be willing to offer payment extensions or a flexible repayment plan.
If an invoice containing errors is issued, a credit note must be prepared. The credit note cancels the original invoice and receives its own number, which also needs to be reflected in the accounting records. The credit note must contain the same information as standard invoices.
It is worth noting that an invoice with errors must be included in the system to maintain numbering consistency. Documentation plays an important role here.
You are obliged to keep invoices that contain errors or similar, but are never sent to the customer. They should be marked as "Cancelled" or "Deleted" and placed in the correct numbered order, with copies of other invoices.
III. E-INVOICING IN NORWAYElectronic invoicing is the process of sending invoices electronically, replacing traditional paper-based methods. This method of invoicing brings a number of benefits, such as increased efficiency, reduced costs and elimination of errors.
In Norway, e-invoicing was initiated in 2011, when public entities were obliged to accept and process electronic invoices.
In 2012, suppliers of government administration units were obliged to send invoices electronically, in accordance with the European e-invoicing standard.
From April 1, 2019, regulation FOR-2019-04-01-444 regarding electronic invoicing in public procurement is in force. This imposes an obligation on public authorities outside Norway to accept and process e-invoices. From that date, suppliers of non-central public bodies are also obliged to send only structured electronic invoices.
Additionally, the e-invoices sent must comply with the EU standard and use the EHF or Peppol BIS standard (in addition to the fact that they are transmitted via the Peppol eDelivery network). Similarly, all central government bodies issuing their own invoices must also ensure that their invoices comply with these standards.
In 2020, a requirement was introduced for all companies and public administration bodies to register in the ELMA register. Currently, there is a monitoring system in place that makes it possible to track the use of e-invoicing in central and non-central public authorities. Currently, approximately 90% of all invoices sent to Norwegian public entities are electronic invoices.
Norway has been a leader in e-invoicing legislation for many years. Compared to other European countries that are obliged to introduce regulations in line with EU Directive 2014/55/EU, Norway has achieved impressive results - e-invoicing is now widely used in the country, both in B2B and B2G transactions.
Norway has implemented the European e-invoicing standard EN 16931, which has been coordinated with the pre-existing Norwegian E2B standard.
The EHF (Elektronisk Handelsformat) and Peppol BIS (Business Interoperability Specification) document formats are required for Norwegian public authorities. Both are based on UBL (Universal Business Language). To receive Peppol BIS messages, all you need to do is connect to your Peppol access point provider. However, to accept EHF invoices, recipients must be registered with ELMA (Elektronisk mottakaradresseregister).
Online sales in Norway
The Tax Administration regulates online sales on the basis of the Act on cash systems and the regulation on keeping accounting books.
In the context of e-commerce, if you sell goods or services online (e.g. in an online store, via an app, etc.), transactions should be documented in accordance with general invoicing principles. This applies even if the sale may be considered cash under accounting regulations.
Online sales (E-commerce) include situations in which a customer places an order and makes a payment via an online solution, without the need to physically visit a stationary store. However, if the offer includes online orders with the option of in-store pickup, the sale is considered a standard cash transaction.
Electronic invoices are sent in the form of a data file from the invoice issuer to the recipient. It is necessary to enable direct import of this file into the recipient's financial system and its automatic processing. It is important to note that PDF documents do not meet the criteria for an electronic invoice.
In the case of sales to a state-owned enterprise, especially when it comes to purchases covered by the Public Procurement Act (value above NOK 100,000 excluding VAT), it is necessary to send electronic invoices. These documents must comply with the "Electronic Commerce Format" (EHF/Elektronisk handlesformat).
For companies that sell goods or services and do not have an invoicing system that supports the EHF standard, there are various online portals that offer solutions for sending such invoices.
Electronic invoices are sent by the issuer in the form of a data file and must be imported and automatically processed by the recipient's accounting system.
State Treasury companies only accept invoices, credit notes and reminders in electronic form, compliant with the Elektronisk biznesformat (EHF).
How to submit e-invoices in Norway?
Fortunately, compared to many other European countries that have complex e-invoicing regulations due to their complex federal legal structure, sending e-invoices in Norway is relatively easy.
Thanks to Peppol's four-way delivery model, suppliers are not required to establish point-to-point connections with partners or use the same supplier as potential partners. Instead, all transactions can be handled by a single provider. At the same time, the fact that all companies connected to Peppol must apply the same standards allows us to significantly reduce the work (and time) needed to establish new partnership connections.
Electronic monitoring systems (invoice circulation systems) are used to approve invoices before they are paid. The use of Peppol resulted in increased interest in public administration in using electronic solutions. The goal of public administration is to be able to automate more processes through the simultaneous use of eProcurement, eCatalogue and eInvoice.
For e-invoices, an electronic signature is not required and the storage period is 5 years, and for the oil recovery and pipeline industries - 15 years.
Benefits of using e-invoices:
- Using e-invoices is easy and efficient.
- It is not necessary to provide your KID number or other invoice information because your e-invoice will be pre-filled.
- You'll get a better overview and more control over your payments.
- E-invoices are stored in your online bank, and you can determine when and from which account to pay the invoice. Payments can be made from anywhere.
- Companies registered in ELMA have access to their entire payment history in the accounting system.
- It's an ecological alternative.
As across Europe, the recent requirement to allow suppliers to Norwegian public authorities to send e-invoices is likely to have a knock-on effect on B2B supply chains as well. The increasing number of companies that are gaining the ability to transmit structured electronic invoices suggests that many will be interested in automatically exchanging messages with all their partners, as well as across an increasingly wide range of business processes. On the other hand, as many companies develop the ability to use EDI (electronic data interchange) to achieve associated savings, this capability is likely to become a key element of effective supply chains.
IV. E-INVOICES FOR TAX PAYMENTSCurrently, all taxpayers, regardless of whether they are private individuals or entrepreneurs, have the opportunity to sign an agreement on e-invoices for making tax payments.
Using e-invoices means that the Norwegian tax administration will send you, as an individual, pre-filled invoices directly via the online banking service, instead of traditional mail or the Altinn platform.
Currently, the e-invoice agreement with the Norwegian Tax Office only covers tax payments.
To set up an e-invoice agreement, when paying your tax, most online banks will ask you whether you want to enter into an e-invoice agreement with the Norwegian Tax Administration. If you accept this offer, the contract will be signed and you will receive further pre-filled invoices from the Norwegian Tax Office via your online bank.
If you have outstanding tax to pay and the amount is split between two invoices, you will be able to sign the contract when the first invoice is paid, however the contract will not become active until both invoices are paid.
Please remember that you can only conclude an e-invoice agreement on your own behalf. Nevertheless, you can still settle taxes for another person (e.g. your spouse), but an e-invoice agreement cannot be concluded in such a situation.
To continue using eInvoices after May 15, 2022, it is necessary to express general consent to receive e-invoices. You can do this via your online bank, also if you have already concluded an e-invoice agreement.
If you have already given your general consent to continue using eInvoice, you will receive an e-invoice for your tax payment without any additional action.
E-invoices are described in detail and can be easily found using various functions of online banking services. Sign an e-invoice agreement, even if you have no outstanding tax. Log in to your online banking account and select e-invoice from the menu. Find the Norwegian Tax Administration as a supplier and the e-invoice number when concluding a contract will be the first 11 digits of the KID number from your tax return.
V. VAT IN NORWAYThe Value Added Tax (VAT) system, or Merverdiavgift (MVA) in Norwegian, was introduced in Norway on June 19, 1969, and came into force on January 1, 1970. Since then, there have been few significant changes, the first of which took place in 2001 and the second in 2009, covering over 130 articles of the VAT Act.
VAT is an indirect tax levied on the consumption of goods and services. Generally, VAT is charged at all stages of the supply chain, as well as when goods and services are imported from abroad. The final consumer, who is not a VAT registered taxpayer, charges VAT as part of the purchase price. For companies and organizations that are liable to pay VAT in Norway, VAT is not usually treated as an expense. As a business you must pay VAT on your purchases, but you will usually be entitled to deduct VAT.
The rules in Norway differ from those in the EU and other regions. VAT regulations are detailed and quite complicated. In case of violation of the VAT Act, additional tax may be imposed. In serious cases, the additional tax may be up to 40%.
All companies with a Norwegian VAT number are required to submit regular VAT returns detailing all taxable supplies (sales) and inputs (costs). Generally, in Norway, these declarations are submitted every two months. The deadline for submitting VAT returns is one month and ten days after the end of the reporting period.
VAT payments must be made within the specified refund period. In the case of a tax relief (where the VAT charged by a company exceeds the VAT charged on its sales during the reporting period), approved reliefs are paid to the company within three weeks of the due date of the refund.
VAT registration in Norway
The requirement to register for VAT in Norway becomes mandatory once the following thresholds are exceeded:
- NOK 50,000 for companies and most organizations
- NOK 140,000 for charities and charitable organizations
- Determine whether your company's annual turnover exceeds NOK 50,000.
- If so, you must register for VAT.
- After successful registration, you will receive a Norwegian VAT registration number.
Once you become a VAT payer in Norway, your VAT registration must be completed within 30 days.
The online VAT registration process in Norway is simplified and allows companies to register via the website of the Norwegian Tax Administration. The procedure includes completing the VAT registration application form, providing the required documentation and submitting the application online.
After successful registration, the company will receive a Norwegian VAT registration number. With the new registration procedure, VAT registration processing times are reduced to minutes or weeks. Therefore, the registration form cannot be submitted in paper form, but only in electronic form.
When calculating turnover, the tax authority only takes into account goods and services subject to VAT.
If a foreign company that does not have a permanent place of business plans to register as a foreign company registered in Norway (NUF), the assistance of a tax representative is necessary. The agent must be resident in Norway and authorized to use the Altinn system, which allows him to register on behalf of a foreign company.
VI. VAT RATES IN NORWAY
- Standard VAT rate: 25%
In Norway, the standard VAT rate is 25% and applies to most goods and services. The application of this rate applies to the vast majority of transactions, such as purchases in the field of electronics and clothing.
- Reduced VAT rate: 15%
Norway offers a reduced VAT rate of 15% for selected products such as foodstuffs, drinks, dietary supplements and over-the-counter medicines.
- Low VAT rate: 12%
In addition to standard and reduced rates, Norway applies a low VAT rate of 12% for certain goods and services related to tourism, culture and transport. This rate is beneficial for sectors such as accommodation services, amusement parks and sporting events.
- Zero VAT rate
In Norway, healthcare, education and financial services are some examples of goods and services exempt from VAT. Additionally, Norway has a 0% VAT rate on books, e-books and newspapers. Businesses supplying goods and services that are zero-rated or exempt from VAT still need to declare them on the VAT return form.
- VAT exemptions
In Norway, there is a VAT exemption for certain goods and services, including healthcare, education, social and financial services. The full list of VAT exemptions can also be found on the website.
VII. VAT OBLIGATIONS IN NORWAYCompanies doing business in Norway must comply with various VAT obligations.
VAT obligation covers transactions such as:
- Supply of goods and services (including self-delivery) within Norway as part of a business.
- Import of goods.
- Sourcing services from outside Norway.
- Cross-border B2C digital services to Norwegian consumers, with reporting obligations under the VOEC scheme.
- Delivery of goods by foreign sellers or made on an online platform.
Import and export of goods
When importing and exporting goods in Norway, understanding the effects of VAT is crucial for accurate reporting and compliance. Different VAT rates apply depending on the type of goods you import or export, and businesses need to know these rates to properly account for VAT on their transactions.
VAT rates can vary significantly, so it's important to check the rate applicable to each transaction.
- VAT import
Import VAT in Norway varies depending on the type of goods you import. This usually corresponds to the standard, reduced or low rate applicable in a given country. The importer is responsible for determining and settling VAT on imported goods. Failure to comply with this obligation may result in significant financial penalties and interest.
- VAT export
Exports of goods from Norway are usually exempt from VAT as long as the goods are shipped outside the VAT territory of Norway. To benefit from zero-rated VAT, suppliers must have appropriate documentation to prove exports, such as sales contracts, transport documents and customs declarations.
Cross-border services and e-commerce
VAT rules for cross-border services and e-commerce transactions in Norway depend on the customer's location. In some situations, Norwegian companies may be exempt from charging Norwegian VAT.
Understanding these rules is crucial for companies transacting cross-border to ensure accurate reporting and compliance.
- B2B transactions
For B2B transactions in Norway, the reverse charge mechanism applies, transferring the responsibility for settling VAT from the supplier to the buyer in cross-border transactions. This mechanism simplifies the VAT process for businesses, reducing the administrative burden of charging VAT on cross-border services.
The reverse charge mechanism eliminates the need to register the supplier for VAT purposes in the buyer's country.
- B2C transactions
For B2C transactions, online sellers are required to collect VAT from customers using the VOEC scheme to facilitate the process for low-value goods. From January 1, 2023, Norway extended its VAT rules to include all "distance supplied services" from overseas sources to consumers in the area of Norwegian VAT, increasing their tax obligations.
Service providers offering non-digital distance services are required to register and collect VAT on B2C transactions, which highlights the importance of understanding VAT rules in the context of e-commerce transactions.
VIII. SUBMITTING VAT DECLARATIONS IN NORWAYAll taxpayers with a Norwegian VAT number must submit regular tax returns, usually every two months. The deadline for submitting applications is 1 month and 10 days after the end of the reporting period. However, companies with an annual turnover of less than NOK 1 million may choose to report every six months.
The VAT due must be settled before the deadline for submitting the declaration. Meeting these deadlines is crucial to avoid penalties and interest.
In Norway, electronic submission of VAT returns is mandatory. This can be easily done via the Altinn portal. This platform simplifies the application process while promoting reporting accuracy and efficiency.
The Norwegian Tax Administration provides guidance on using the Altinn platform and complying with required e-invoicing standards such as EN 16931, EHF and Peppol BIS formats.
From January 2022, enterprises must submit VAT returns using standard JPK codes in the form of electronic JPK files to transmit accounting information. This file must be easily accessible upon request by the Norwegian tax authority, known as "Skatteetaten".
Reporting is based on SAF-T codes and the SAF-T standard, which became mandatory from January 2020. The JPK format enables electronic reporting, enabling enterprises to export data from accounting books in the form of an XML file. The main purpose of this reporting format is to facilitate tax compliance, streamline audit processes and simplify external audits.
The digital reporting process takes place via the Altinn portal, which is a common platform for electronic communication between companies and public authorities in Norway. In addition, tax authorities presented a discussion paper suggesting that by 2024 all sales and purchases should be reported electronically at the transaction level.
Sales and purchase list reporting
Norway is expected to introduce transaction-level VAT reporting by 2024, requiring businesses to report individual purchases and sales. The aim of this change is to improve the accuracy and efficiency of VAT reporting and minimize the risk of incorrect declarations.
Businesses must adapt to upcoming changes and ensure that their accounting systems are able to adapt to new reporting requirements.
Most companies in Norway, Sweden and Finland use electronic invoicing systems.
Despite the high level of adaptation of electronic invoicing, there are still enterprises that do not use this solution.
VAT refunds can provide financial benefits to businesses in Norway, and understanding the VAT refund process means that companies will be able to maximize these benefits.
Entities registered for VAT in Norway may be eligible for a refund of input VAT on their own purchases of goods and services used in their business. The refund process usually takes six months and the deadline for submitting the annual VAT return is January 31.
Foreign companies have the opportunity to claim a refund of Norwegian VAT in accordance with the Eighth and Thirteenth VAT Directives of the European Union. To obtain a Norwegian VAT refund, a foreign entrepreneur must meet the following conditions:
- The company is not subject to VAT in Norway.
- VAT applies to the applicant's business activity.
- It is possible to present original invoices containing Norwegian VAT.
IX. REPRESENTATIVE FOR VAT IN NORWAYForeign entrepreneurs offering goods and services in Norway without having their place of business or residence in Norway must generally be registered through a VAT representative.
However, there is an exception for entrepreneurs from countries that have concluded an agreement with Norway on the mutual recovery of VAT and tax receivables. This applies to companies from Belgium, Bulgaria, Denmark, Estonia, Finland, France, Greece, Ireland, Iceland, Italy, Croatia, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Czech Republic, Germany, Hungary and Austria.
The entrepreneur will be subject to the rights and obligations arising from regular registration in the VAT Register. For companies that must register through a VAT representative, the latter must be domiciled or established in Norway. To complete registration, both the foreign company and its representative must sign a Notice of Coordinated Registration. The VAT representative is obliged to ensure the correctness of VAT settlements and is responsible for submitting VAT returns.
Compliant with Norwegian VAT
In Norway, a VAT representative is obliged to collect and issue invoices on behalf of a non-resident entrepreneur, taking into account both the entrepreneur's and the representative's details.
There are specific regulations regarding the registration and processing of Norwegian transactions. These include guidelines on:
- Norwegian invoice requirements,
- Reporting and conversion of foreign currencies,
- Credit notes and corrections,
- Accounting books that must be kept.
- Norwegian VAT refunds
X. REMOVAL FROM THE VAT REGISTER IN NORWAYIn the event of termination of turnover subject to VAT (VAT turnover) due to the cessation of activity by the enterprise or a change in the nature of the enterprise in such a way that it realizes only turnover exempt from VAT, the entrepreneur is obliged to report deletion from the VAT Register.
If the taxable turnover in a given year is less than NOK 50,000 (the threshold amount for registration in the VAT register), this does not mean that the company must be removed from the VAT register in itself. However, if the turnover remains below the threshold amount for the next two years, the company will be removed from the VAT register.
Businesses that sell to customers in Norway need to have a solid understanding of Norwegian VAT, from rates and registration to invoicing and refunds. Staying up to date with these regulations and diligently complying with them allows companies to minimize the risk of fines and other penalties, contributing to a successful and profitable business in this dynamic Nordic market.