Norway and the Trend to Taxing Low Value Goods

Andrew Decker
March 26, 2020

From 1 April 2020, Norway will require non-resident suppliers of “low value” goods to Norwegian consumers to charge VAT on such supplies. Norway is the latest in a series of countries to take this step ahead of similar changes scheduled to begin in the European Union next year.

Around the world, countries impose VAT style taxes on domestic supplies and imports of goods. Many countries, however, exempt “low value goods” from import VAT. For example, the EU currently exempts small value consignments of less than EUR 10 and provides that member states may exempt consignments up to EUR 22.  With the rise of cross-border e-commerce, these exemptions have led to a distortion of competition, as online non-resident sellers can charge less then local retailers. In a move to eliminate this distortion as well as boost tax revenue, countries are increasingly removing these exemption thresholds and requiring non-resident suppliers to collect and remit VAT on certain supplies of such low value imports. This differs from the traditional method of collecting import VAT, which typically falls on the party responsible for clearing the goods through customs.

In July 2018, Australia became one of the first countries to implement such a change, requiring foreign suppliers of goods with a custom value of AUD 1,000 to Australian consumers to collect and remit output GST on such supplies. Switzerland and New Zealand soon followed suit, implementing their own version of the new rules in January and December 2019, respectively. The EU is scheduled to eliminate its low value imports exemption and implement a special scheme for imports under EUR 150 from 1 January 2021.

Norway will require that foreign suppliers with an annual Norwegian turnover of NOK 50,000 and who make supplies of goods with a value of NOK 3,000 (per item) to Norwegian consumers register, collect and remit VAT on such supplies. Suppliers can register via the special VOEC (VAT on E-Commerce) scheme. Suppliers already registered under the VOES (VAT on Electronic Services) Scheme may use their VOES number in place of registering for a VOEC number. Additionally, when a supplier makes a sale through an electronic marketplace, the marketplace and not the supplier, must collect the VAT.

As this trend continues, businesses should consider the following questions when determining if they are liable for VAT in jurisdictions which have implemented such rules:

  • In defining “low value goods” does the jurisdiction look at the value per item, per consignment/shipment, or per invoice?
  • Is there a threshold on the amount of annual sales necessary to trigger VAT liability for non-resident suppliers? If yes, is this threshold based solely on supplies of low value goods or does it include other sales sourced to the destination country (such as supplies of electronic services) or even possibly the business’s global turnover?
  • If a sale is made through an electronic marketplace – does liability for VAT fall on the supplier or the marketplace?
  • Is there a special VAT registration, payment or reporting regime related to these supplies?
  • If a company is liable for low-value imports does this effect their VAT liabilities for other imports?

As countries continue taking steps to increase tax revenues, businesses must keep up with changing regulations to remain compliant with VAT obligations around the world.

Take Action

To find out more about what we believe the future holds, download Trends: Continuous Global VAT Compliance and follow us on LinkedIn and Twitter to keep up-to-date with regulatory news and other updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Andrew Decker

Andrew Decker is a Senior Regulatory Counsel at Sovos Compliance. Working within Sovos’ Regulatory Analysis Department, Andrew’s work centers on indirect taxes (VAT, GST, Sales Tax), with a particular focus on jurisdictions in Europe and Asia. Andrew is a member of the Massachusetts Bar with a J.D from Northeastern University School of Law and a B.A. from Bates College.
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

Tax Compliance Tax Information Reporting United States
June 1, 2020
The Advantage of a Cloud-First Company

With the acquisition of Eagle Technology Management (ETM) and Booke Seminars, Sovos has united the very best in statutory reporting solutions, technology and expertise. Below is an overview of our strategy following these acquisitions: Sovos’s SaaS and Security Strategy  Sovos at its core is a Software as a Service (SaaS) and cloud-first company. This means […]

ShipCompliant United States
May 28, 2020
Ask Alex: Your Bev Alc Compliance Questions Answered (May 2020)

Do you have questions about the rules, regulations, and compliance requirements of the beverage alcohol industry? This series, Ask Alex, is a perfect opportunity to get those pressing questions answered straight from one of the industry’s regulation and market experts, Alex Koral, Senior Regulation Counsel, Sovos ShipCompliant.  To take advantage of this opportunity and get […]

E-Invoicing Compliance EMEA
May 28, 2020
Turkey’s Transition Conditions for E-ledger

On October 19, 2019, the Turkish Revenue Administration (TRA) published a communique making the e-ledger application mandatory for e-invoice users, companies subject to an independent audit, and companies identified by the Presidency to have poor tax compliance.  The e-ledger application enables businesses to create the legally mandated general journals and ledgers and submit e-ledger summary […]

ShipCompliant United States
May 27, 2020
How Technology Partnerships Improve DtC Compliance

To be an expert, one has a specialty. Ours is beverage alcohol compliance. Since compliance sits at the heart of operations, being connected at every step helps our customers focus on their business instead spending countless hours on manual processes. Compliance is challenging, but we make it easier with a large and robust network of […]

EMEA IPT Tax Compliance
May 26, 2020
Why IPT Reporting is so Complex for Insurers

Accurately calculating insurance premium tax (IPT) for reporting can be complex.  And the ramifications of getting it wrong can be far reaching from impacting profit margins to unwelcome audits, fines and damage to your company’s reputation in the market and with customers. Calculation methods When I speak to customers about how they calculate insurance premium […]