Which electronic services are included in the VOEC system
Electronic services are defined in the Norwegian Value Added Tax Act section 1-3 first paragraph letter j. The definition is based on the EU VAT Directive (2006/112/EU) and the EU VAT Regulation (Council Implementing Regulation NO 282/2011 of 15 March 2011 article 7). They can be used as guidelines when deciding what is included in the term electronic services. Electronic communications services / telecommunications are within scope of the VOEC scheme as well.
Examples include the downloading of software, music, films, digital books and other electronic publications.
A foreign supplier of electronic communication services to Norwegian private individuals can also use the simplified system. By electronic communication services is meant broadband telephony and internet access, among other things. Broadcasting services are also included, regardless of whether the broadcasting takes place via traditional radio or TV networks, the internet or other networks.
If the content of the service would be exempt from the duty to pay VAT in connection with domestic sales in Norway, VAT will not be charged in connection with the sale of such services from a foreign supplier to Norwegian private customers. For example, this means that VAT shall not be charged on the sale of services in the form of lotteries and games of chance delivered via the internet (online poker etc.) to Norwegian customers. Electronic books and audiobooks are also exempt from VAT in Norway, and VAT shall not be charged on the sale of such.
Will the simplified system confer a right to deduct input VAT?
No. Suppliers included in the simplified system must use the system for reimbursement of VAT.
How to register
The supplier is assigned an identification number and password.
The duty to register arises when the total value of deliveries to recipients in Norway exceeds NOK 50,000 during a period of 12 months. Suppliers who otherwise meet the requirements can nonetheless be registered in the simplified registration system before this amount limit is exceeded.
A supplier who falls below the amount limit of NOK 50,000 and who has not been deleted, must nonetheless register in the system for two calendar years and calculate and pay VAT and submit VAT returns during this period.
What documentation and compliance requirements apply?
In the simplified registration system, the supplier must keep a list of transactions that concern the sale of electronic services to Norwegian private individuals. The list of transactions must be sufficiently detailed for it to be compared with the VAT return and thereby function as a means of control.
According to the Regulation to the VAT Act Section 15-10-1, the transaction record shall at least contain the following information
a) documentation reference
b) delivery date
c) name and residential address of customer
e) fee, inclusive of value added tax, where the amount is given in Norwegian kroner
f) and value added tax.
The list of transactions must be stored for 5 years and, at the Norwegian tax authorities' request, it must be made available electronically within three weeks.
As regards compliance with the regulations, suppliers in the simplified registration system will be subject to most of the Value Added Tax Act’s general administrative provisions. Among other things, this means that the suppliers will have a general duty to disclose information that has a bearing on VAT control and that the VAT authorities can obtain information about the suppliers from third parties. It also means that the VAT authorities can stipulate VAT by discretionary judgement and otherwise impose sanctions such as additional tax or penal sanctions if a supplier provides incorrect or incomplete information or fails to submit a VAT return.
It is recommended to state your VOEC identification number on your receipt or invoice to your customers.