Has your company made purchases in Norway that included Norwegian VAT? If the company is not VAT-registered in Norway, you cannot reclaim the VAT through the regular VAT returns. Instead, foreign businesses may apply for a VAT refund from the Norwegian tax authorities. Below we will outline how the company can apply for a VAT refund to prevent the VAT from becoming an unrecoverable cost.
Key considerations when applying for a VAT refund
Did your company have VAT liable turnover in Norway?
Foreign companies with VAT liable turnover in Norway exceeding NOK 50 000 within a 12-month period should not apply for a VAT refund but are instead required to register ordinarily in the Norwegian VAT register to claim input VAT through the regular VAT returns and pay the output VAT charged on the Norwegian turnover.
Are the goods/services for use within the company?
A VAT refund can only be claimed if the acquired goods and services are used within the company. If they are resold, the company is considered to be conducting VAT liable activities in Norway, necessitating VAT registration.
Also read: Should your business register for VAT in Norway?
Would the company be liable to register in the VAT Register in Norway?
Only companies performing business activities that are covered by the VAT Act – i.e., the business would have been VAT registered if it was a business operating in Norway – can apply for a VAT refund.
Companies that perform exempt services such as health care, dental care, educational services, or financial services will not be entitled to a VAT refund.
As domestic companies engaged in these services are not entitled to deduct VAT, foreign companies are correspondingly not eligible for a VAT refund.
Would the purchase be deductible if the company was VAT registered in Norway?
The VAT refund arrangement only covers deductible acquisitions. Examples of non-deductible goods and services include:
- Catering
- Business entertainment
- Remunerations to enterprise owners and employees
- Construction or maintenance of property that covers a housing or welfare need
Also read: How to deduct VAT in Norway
Does the application meet the formal requirements?
To apply, authorized persons must submit the form RF-1032 to the Norwegian Tax Administration on behalf of the company.
The form must be in English or a Scandinavian language and submitted by regular post. The application form must be original, but it is not a requirement to submit original invoices with the application. Prints from an electronic accounting system will suffice.
An approved certificate from a local public authority confirming that the company is registered, and a description of the business activities must be attached.
Is the application submitted before the deadline?
The deadline for submitting the VAT refund application is September 30 the following year of the purchase occurred. This is an absolute deadline, and the application must be postmarked no later than this date.
Keep in mind that a company who has purchases with Norwegian VAT do not have to wait until the following year to apply. The processing time for a VAT refund application often exceeds six months, so by applying more frequently, the company can enhance its cash position. However, the tax office does not accept applications for periods shorter than three months.
Do you have questions about Norwegian Value Added Tax?
Managing and navigating the Norwegian VAT landscape can be complexed. At Magnus Legal, we have solid experience in helping foreign companies with their VAT obligations. Feel free to reach out for support.