VAT Guide for Freelancers in Norway

VAT RATE: 25%
Regardless of where you’re based, you have to deal with Norwegian VAT rules if you have clients in Norway. VAT, or Value Added Tax, is a consumption tax levied on the purchase of almost all goods and services. While you might already know that, you might be unaware of the specific rules in Norway surrounding your product, which you should follow if you want to stay tax compliant. 

While Norway is not in the European Union, it has signed a collaboration agreement with the EU to share VAT-related information to prevent VAT fraud in the EU and Norway. VAT is administered by The Norwegian Tax Administration, which is also responsible for publishing updated content related to the Norwegian VAT system in its website.

If you are a freelancer in Norway and are confused by VAT and the rules surrounding it, you're at the right place. Let’s get started!

What are the VAT Rates in Norway?

The Norwegian government levies four different VAT rates, and freelancers must charge the amount that applies to their products and services:

  • The Standard Rate of 25% - Unless the items or services you offer are in the reduced rate or zero-rated category; you should charge the standard VAT rate of 25%.
  • The Reduced Rate of 15% - The reduced rate of 15% applies to food and beverages but does not include alcoholic beverages, tobacco, water and medication.
  • The Reduced Rate of 12% - The reduced rate of 12% applies to public transport, tickets to cinemas, sports events and amusement parks, accommodations, etc. 
    • Between 1st April 2020 to 31st September 2021, the reduced rate of 12% was further reduced to a VAT rate of 6% because of COVID.
  • The Zero Rate - 0% VAT rate (VAT exemptions with credit) applies to the export of goods and services, newspapers, sale of aircraft and other vessels, books, search and rescue vehicles, etc. Although there is no VAT charged on these materials, you should record sales of goods and services and create a report based on your returns.

Services exempt from VAT without credit include financial, social, health and educational services. 

When should you register for VAT?

You are liable to start charging VAT to your customers in Norway once your annual turnover exceeds NOK 50,000. You will also be liable to notify liability to the Norwegian Tax Administration and register for VAT.

You are required to report VAT once every other month. (i.e. once in two months)

Besides the annual turnover, there are other special scenarios when you may need to register for VAT

How to register for VAT in Norway

If you are a self-employed person in Norway, you must first ensure that you are registered in the Central Coordinating Register of Legal Entities. After determining that your practice is eligible to be registered for VAT in Norway, you must prepare the following for submission:

  • Documents containing information about your annual revenue, taxable financial transactions, and bank account information.
  • If you are a permanent resident or citizen of Norway, you do not need a fiscal representative. However, if you are an expat freelancer looking to sell your goods or services to Norway, you require a fiscal representative who is also registered in the Central Coordinating Register of Legal Entities. This representative should have their practice registered in Norway and be eligible to pay the due VAT.
  • A power of attorney for the fiscal representative (if you are a non-Norwegian Citizen).

How to Register for VAT Online as a Freelancer?

To register online for VAT, you need to sign up directly on the Norwegian Tax Administration website with an electrical id (Bank ID, Buypass Id or SMS Pincode). You will receive approval in a few days. Note that the website is in the Norwegian language.

If you are an expat freelancer looking to do business in Norway, you should have a fiscal representative to register for VAT online.

The offline registration method has been discontinued and currently, you can only register for VAT online.

Alternatively, you can hire an accountant (or agency) to handle your VAT returns and dealings with the Finnish Tax Administration. Xolo provides services like Xolo Go and Xolo Leap, which help with precisely this and any other VAT concerns you may have.

Financial Obligations of VAT Registered Freelancers in Norway

Registering for VAT is only the first step. From the day of your registration's effective date, you must:

  • Charge the correct VAT rate
  • Pay any VAT owed to the Tax Department of Norway quarterly
  • File VAT returns
  • Maintain VAT records and a VAT account.

Furthermore, every VAT-registered individual is required to:

  • Keep track of all purchases and transactions.
  • Keep a running total of their VAT account.
  • Make sure their VAT invoices are correct.

In addition, the sole proprietors using MOSS services must properly maintain their VAT records for a minimum of six years and a maximum of ten years in an electronic, or physical format. These records must be complete, clear, and well organized. 

Take a note to maintain a record of the following things:

  • Printed copies of the invoices you send out,
  • Received invoices
  • Agreements on sell-billing.
  • The self-billing vendors' names, addresses, and VAT numbers.
  • Notes (debit/credit)
  • Records of imports and exports.
  • Records of bank statements, check stubs, cash books, till rolls, and paying-in slips in addition to your VAT account.

Also note, you cannot claim VAT on records of items that have been received or sent already.

Overwhelmed? Xolo’s got your back! We future-proof your records by automatically generating, sending, and storing all your invoices for you, so you won’t have to worry about missing any steps or misplacing any documents ;)

How Xolo Can Help?

Learning all the Norwegian tax guidelines can be challenging, especially if you’re a sole proprietor and in charge of several aspects of your business. Luckily, at Xolo, we offer a range of solutions that can handle all the paperwork and legal jargon, allowing you to focus on your core competencies.

Xolo Go is a quick and efficient way for freelancers who may or may not have a registered LLC or sole proprietorship to invoice clients legally. 

  • Signing up takes only 10 minutes, and once you do, taxation, corporate compliance, and all the tricky VAT calculations are all automatically taken care of in the background!
  • We charge a flat rate of 5% from every withdrawal to your personal bank account. No surprise fees, no contracts, and no BS.

 

Xolo Leap is the easiest and most effective way to create your own company through Estonian e-Residency! Reduce time spent on mundane business administration and focus on what you do best!

  • We offer different tiers of service depending on the solopreneur's (or as we call them, Xolopreneur's) individual needs.
  • Once you get your business set up with Xolo Leap, you can literally run it from anywhere in the world! So whether you’re a freelancer looking to gain access to the EU market or a digital nomad who can’t be tied down - this is the place for you! 

Simply put, we do the hefty work for you so that you can enjoy the freedom of freelancing. So connect with us immediately, and we’ll help you get your one-person business up and running in Norway in no time!