Norwegian e-commerce market: Fiscal representation vs. VOEC in comparison

Background: VAT and market entry in Norway

Although Norway is not part of the EU, it is closely linked to the EU single market via the European Economic Area. Nevertheless, from an EU perspective, it is considered a third countryfor VAT purposes. For foreign online retailers, this means that deliveries to Norway are subject to special VAT and customs regulations. E-commerce retailers who supply Norwegian private customers have two basic options for correctly paying Norwegian VAT (Merverdiavgift): the classic fiscal representation model or the VOEC procedure. Both models are explained below and their advantages, obligations and requirements are compared.

Fiscal representation in Norway

In order to be able to carry out taxable supplies in Norway, foreign companies must register once they reach a certain turnover. The general registration threshold is NOK 50,000 turnover within 12 months. If a foreign trader exceeds this threshold with sales to Norwegian customers, they must register in the Norwegian VAT register. This is usually done by registering a so-called NUF (“Norwegian registered foreign company”) and appointing a local fiscal representative.

Once registration has been completed, the company receives a Norwegian VAT identification number (Organasjonsnummer ending in “MVA”). From then on, it must submit regular Norwegian VAT returns – this is done bi-monthly (every two months). The foreign trader then pays Norwegian VAT on its sales and can deduct input tax in return.

Important: If deliveries are made to end customers without using the VOEC scheme, the import must be cleared through customs in Norway. In practice, this means that either the customer pays the import VAT upon receipt or the retailer (or their fiscal representative) clears the goods through customs and pays the import VAT.

A special feature of Norway is the offsetting model for import VAT: If a company is already entered in the Norwegian VAT register at the time of importing goods, import VAT does not need to be paid in cash at the border. Instead, the importer declares the VAT due in his next VAT return and can claim it as input tax at the same time – subject to the usual conditions. This eliminates the pre-financing of import VAT for registered companies. Non-registered foreign companies, on the other hand, cannot use this model and must pay the import VAT at the time of customs clearance (with the possibility of subsequent reimbursement via input tax deduction).

VOEC procedure: Simplified registration for e-commerce

The VOEC (“VAT On E-Commerce”) procedure has been in place in Norway since 2020 – a simplified VAT and customs procedure specifically for foreign online retailers. It is aimed exclusively at deliveries to private individuals (B2C) and applies to so-called small consignments with a goods value of less than NOK 3,000 per item. If the value of the goods exceeds this limit, VOEC does not apply; regular customs clearance is then required. Certain groups of goods such as foodstuffs and goods subject to excise duties (e.g. alcohol or tobacco) are also exempt from VOEC.

A foreign trader who sells goods to Norwegian end consumers via VOEC must register with the Norwegian tax authorities and receive a VOEC number. The registration obligation applies – analogous to normal registration – from NOK 50,000 turnover within 12 months. After successful registration, the retailer charges Norwegian VAT (currently 25%) directly on the sale to the customer and displays the VOEC number on the shipment. The shipment then passes through customs without import VAT or customs duties being charged, as these are already covered by the VOEC system. The retailer reports and pays the collected VAT to the Norwegian authorities on a quarterly basis using the VOEC procedure.

Advantages of the VOEC model: VOEC eliminates the need for formal fiscal representation and customs clearance for each individual small consignment. Retailers avoid customers having to pay tax on delivery – which increases customer satisfaction. In addition, no customs duties are due for VOEC shipments with a value of up to NOK 3,000. Administration is simplified for the retailer, as only quarterly online reporting of sales is required.

Obligations and requirements: VOEC may only be used for B2C deliveries of goods below the value threshold. The retailer must show the 25% Norwegian VAT in the price and pay it to the tax authorities. Registration is required at the latest when annual sales to Norway exceed NOK 50,000. In addition, shipments must be correctly declared with a VOEC number so that customs can recognize them as VOEC shipments. If a retailer does not comply with the VOEC requirements (e.g. shipping higher value items without customs clearance), there is a risk of additional charges; in the event of systematic violations, participation in the VOEC system can be withdrawn.

Comparison: Fiscal representation vs. VOEC in Norway

Aspect	Fiscal representation (classic)	VOEC procedure
Scope of application	B2B and B2C, all deliveries of goods to Norway	B2C deliveries only, value of goods < NOK 3,000 (no food, alcohol, etc.)
Registration threshold	50,000 NOK turnover (12 months)	50,000 NOK turnover (12 months)
Customs clearance & import VAT	Normal customs clearance per shipment; import VAT possible via clearing model (no cash payment for registered companies)	No regular customs clearance for < 3,000 NOK; import VAT already levied on sale (VOEC)
Settlement of VAT	Bimonthly reporting and payment; input tax amounts can be claimed	Quarterly reporting and payment; input tax cannot be claimed
Advantages for retailers	Shipping of higher-value goods possible; input tax deduction incl. import VAT; full control over the shipping chain	Simplified procedure for small consignments; fast delivery to customers without customs delays; reduced administrative costs
Disadvantages / effort	Higher administrative effort (registration, fiscal representative, ongoing reporting); import formalities remain in place for low value goods	Limitation to low value goods; customs clearance is still required if the border is crossed; quarterly reporting required

Comparison of Norway vs. Switzerland for fiscal representation

Not only Norway, but also Switzerland is an attractive market outside the EU. Both countries require foreign companies to register for VAT, but the details differ significantly. In Switzerland, registration is required as soon as a company has a worldwide turnover of at least CHF 100,000 and some of this turnover is generated in Switzerland. Swiss VAT must then be levied by the foreign supplier. A fiscal representative based in Switzerland must always be appointed and a financial guarantee (usually a bank guarantee or deposit) must be provided. In Switzerland, settlement is usually made on a quarterly basis. An important difference to the Norwegian regulation concerns import sales tax: In Switzerland, import sales tax must always be paid at the border. The fiscal representative (or importer) pays the tax at customs, which can then be reclaimed as input tax as part of the VAT declaration. Norway, on the other hand, has a system – as described above – in which registered companies can offset the import tax directly via the VAT return. This reverse-charge-like model saves time and liquidity in Norway, as no pre-financing of the tax is required. Such an offsetting model does not exist in Switzerland, which means higher administrative costs and capital commitment for retailers there.

Conclusion

For e-commerce merchants who want to serve the Norwegian market, choosing the right VAT model is crucial. The classic fiscal representation model is indispensable for higher-value goods and B2B transactions, but involves an administrative burden. For suitable products, the VOEC procedure offers an attractive simplification for small B2C shipments and reduces customs hurdles. By carefully observing the relevant obligations – from registration limits to correct declarations – retailers can ensure a smooth expansion to Norway. Compared to Switzerland, it is clear that Norway offers some simplifications from a retailer’s perspective with the VOEC and the clearing model for imports.