Norway’s New 2022 VAT Return: Detailed and Digital

The Norwegian tax authority’s project for modernising VAT, the MEMO-project, has announced a new digital VAT return. It will take effect from the beginning of 2022 following a pilot program in August this year. This new VAT return seeks to provide simplification in reporting, better administration, and improved compliance in the VAT system.

Currently VAT return entries are done manually via the Altinn portal, by the person or entity submitting the form and are based on aggregated numbers filled out over 19 boxes. The new return provides a common information structure based on the codes list from SAF-T, which gives more detailed reporting over 30 boxes as well as corrections, bad debts, and adjustments.

Norway believes the transfer of supplementary and comprehensive information in the new return will provide more complete data and offer better analysis on the VAT handling of the person or entity submitting the return. Further, it is believed that this new format will be more intuitive and increase the degree of access to information.

How will Norway’s new VAT return work?

Each VAT return will be submitted via data in the taxpayer’s accounting system/ERP and sent to the government portal via an API. From there, the tax authority will return an identifier/receipt for the submitted return to the taxpayer’s accounting system/ERP. Using a new visual end user interface, the submitter will also be able to view the return and sign.

The idea is that the system will minimise errors caused by incorrect data input and reduce time spent on manual data entry. The tax authority has already tested the new system with small batch number sets. From March 2021, testing of the accounting system’s validation service, verification of the VAT return and confirmation message providing content will be done in larger number sets. The plan is to have a complete service assessment in May 2021 before the pilot in August.

In addition to the above changes, the Norwegian Ministry of Finance may also introduce a new electronic purchase and sales listing alongside the new VAT return. The new listing would report all invoiced purchases and sales at the transactional level. Such a change, however, would require a change to the VAT law to which the Ministry is already discussing.

With less than a year until the new return takes effect businesses still may need further clarification and time to prepare themselves for the new reporting format. Specifically, they may need to review their internal VAT codes, the mapping of such codes to SAF-T codes, and their accounting procedures.

Further details as they arise, and an updated timeline can be found on the Norwegian’s tax authority’s website here.