The Norwegian government has presented its State Budget for 2020, including changes to Norwegian VAT (MVA). It proposes:
- To remove the existing low-value consignment threshold of NOK 350 for goods purchased by consumers from abroad;
- Moreover, the proposal suggests replacing it with a mandatory simplified reporting VAT scheme
Consequently non-established sellers/marketplaces will need to register and report VAT under the new mandatory VAT scheme.
Simplified VAT Regime for Low-Value B2C Goods
In effect from 1 April 2020 is the simplified VAT regime for cross-border B2C transactions of low-value goods. Low-value defined as between NOK 0 and NOK 3,000 (approx. EUR 300). This new ‘’VAT On Small Consignment’ (VOSC) system is an extension of the existing ‘VAT On Electronic Services’ (VOES) system, a simplified scheme to help with declaring VAT due on cross-border B2C sales of electronic services.
As of 1 April 2020, under the new rules:
- Foreign businesses must register for Norwegian VAT if their sales to Norwegian consumers exceed NOK 50,000 (approx. EUR 5,000) during a 12-month period (it will also be possible to voluntarily register);
- The VAT liability on supplies of low-value goods shifts from the Norwegian consumer to the foreign supplier of the goods.
- Instead of the Consumer paying VAT at the point of importation, the Supplier must collect Norwegian VAT at the point of sale thereupon report and remit the VAT to the Norwegian tax authorities;
- Therefore if a seller uses an electronic marketplace, the marketplace will have an obligation to register under the simplified scheme; and
- The VOSC system will provide a simplified registration process and simpler terms for charging, collecting and remitting VAT to the Norwegian tax authorities;
- Quarterly reporting VAT periods will be in place.
If your business is affected by these changes, please contact our VAT experts to see how we can assist with these new rules.