In recent years, the Norwegian tax authorities have intensified their efforts to monitor and regulate businesses established outside of Norway that sell low-value goods (items with a value less than NOK 3,000) and electronic services to Norwegian consumers. This increased scrutiny is largely facilitated by the authorities' enhanced access to payment systems, enabling them to track transactions between Norwegian consumers and foreign businesses with greater precision.
Tracking Transactions Through Payment Systems
The tax authorities' ability to access and analyze payment systems has proven to be a powerful tool in identifying non-compliant businesses. By tracking transactions, they can pinpoint instances where foreign businesses are selling goods and services to Norwegian consumers without adhering to Norwegian VAT regulations. This method of surveillance has led to a rise in the number of businesses subjected to assessment of missing VAT payments.
Obligation to Register in the VOEC Register
One of the key obligations for businesses selling low-value goods and electronic services to Norwegian consumers is to register in the Norwegian VOEC (VAT On E-Commerce) register. This register is designed to ensure that VAT is correctly applied to these transactions, providing a level playing field for all businesses operating in the Norwegian market.
Consequences of Non-Compliance
Failing to register in the VOEC register can have serious repercussions for businesses. The tax authorities can assess the unpaid VAT on transactions that should have been subject to VAT. In addition to the assessed VAT, businesses may face a penalty tax of 20% on the missing VAT amounts. Furthermore, interest is calculated on the unpaid VAT from the time the payments should have been made, adding to the financial burden on non-compliant businesses.
As the tax authorities continue to leverage their access to payment systems, the number of businesses falling under their scrutiny is expected to rise. This trend underscores the importance for foreign businesses to ensure compliance with Norwegian tax regulations to avoid penalties and interest charges.
The Norwegian tax authorities' increased control measures highlight the importance of compliance for businesses selling low-value goods and electronic services to Norwegian consumers. By registering in the VOEC register and adhering to local VAT regulations, businesses can avoid the financial and legal consequences of non-compliance. As the authorities continue to refine their tracking capabilities, it is crucial for businesses to stay informed and proactive in their tax obligations.
How to Be Compliant
To ensure compliance, businesses selling low-value goods and electronic services to Norwegian consumers must register in the VOEC register. The registration process can be completed through the Norwegian Tax Administration's website. After initial registration, the business will be assigned a VOEC number, which must be used in all declarations and shipping documentation. Additionally, businesses are required to submit quarterly VAT returns and ensure that the VOEC number is clearly stated in all transactions involving Norwegian consumers.
If you are unsure whether your business may be at risk, please do not hesitate to contact us.