In the latest edition of Skatteinfo — Tax Administration's information report on taxes and taxes, it is stated about increased control focus on reporting VAT when purchasing services from abroad. The Tax Administration has developed a separate tool to determine the tax liability of the individual.
LOCATION-BASED SERVICES
In the tax context, a distinction is made between location-based services and so-called remotely deliverable services.
Turnover in the VAT area of location-based services, e.g. building and construction services and physical maintenance services, shall be calculated by the seller.
If there is a foreign company that transmits these services, the company must be registered in the VAT Register and calculate the outgoing VAT on the turnover.
REMOTELY DELIVERABLE SERVICES
Remotely deliverable services are, by definition, services that can be provided over a distance, so that their execution or delivery does not necessarily have to be linked to a specific physical location. Examples of such services include the purchase of advertising services on the internet or social media, consulting and consulting services, or software/licenses.
Foreign providers of remotely deliverable services are not obliged to register in the VAT register.
In order to avoid distortions of competition vis-à-vis Norwegian providers of the same services, there is an obligation for the recipient of such services to calculate VAT on behalf of the seller — so-called reverse VAT settlement. It is only commercial beneficiaries who have this duty -- not private individuals.
BUSINESSES NOT REGISTERED IN THE VAT REGISTER
According to the information provided by the Tax Administration, there are in particular traders with exempt turnover who do not comply with the obligation to deduct VAT when purchasing remotely deliverable services. Businesses with only exempt turnover must report VAT on reverse billing via RF-0005, as they do not submit a VAT return.
ONLINE SYSTEM FOR MAPPING VAT LIABILITY
The Tax Administration has developed an online form that helps to map the tax liability for the purchase of remotely deliverable services. If you are in doubt whether your customer is obliged to report VAT on reverse billing, you can test the system.
Source: Article written by Sebastian Brodtkorb, Regnskap Norge
