[ESTABLISHING A BUSINESS ENTITY IN NORWAY] 378
contributions) for the enterprise, since he or she in any event is personally liable. 4.2.3 VAT Foreign businesses that start up business activities liable to VAT in Norway must calculate and pay VAT in the same way as Norwegian companies. VAT is payable on all sales of goods and services, except those that have been specifically exempted by law. Certain goods and services are exempt from VAT on sales, or subject to a so-called 'zero rate'. Among other things, this applies to the sale of goods and services to other countries, to certain ships and aircraft and for use in offshore petroleum activities. Businesses with these types of sales must be registered in the VAT Register. The importation of goods and services to Norway is also liable to VAT. Norwegian Customs and Excise collect VAT on the imported goods. VAT on imported services is subject to certain limitations: Businesses and public institutions must calculate and pay VAT on purchases of services provided from abroad. In other words, it is the recipient's duty to calculate and pay VAT in such cases. Examples of services that can be remotely provided include electronically provided services, consultancy services and various information services. The standard VAT rate is 25%. A VAT rate of 15% is levied on the sale of food. The rate is 12% for passenger transport. The same applies inter alia to hotels and other businesses that rent out rooms, apartments, and vacation homes to tourists. It should be noted that Norwegian authorities is currently implementing a “package” of measures in connection with the coronavirus situation. The package includes a temporary lowering of the
VAT low rate (the 12% rate) to 6%, which is expected to be in force until 31 October 2020. Foreign businesses that sell goods or services in Norway, must register with the VAT Register when the value of sales and withdrawals liable to VAT exceeds NOK 50,000 during a 12-month period. Foreign businesses that sell goods or services in Norway without having a place of business or a place of residence here must be registered through a representative. If the foreign national registers through a representative, he or she will have the rights and obligations that follow from ordinary registration in the VAT Register. The representative must have a place of residence or a place of business in Norway. A foreign business that is registered in the VAT Register (directly or through a representative), is obliged to comply with all applicable Norwegian accounting legislation. The foreign business has a duty to submit VAT returns to the tax office for each reporting period. Businesses with sales of less than MNOK 1 in the course of a calendar year can apply for permission to submit a VAT return once a year (annual VAT return). 4.3 Restrictions on remitting funds outside of the jurisdictions (withholdings, etc.) 4.3.1 Share dividend When a company generates profit, some of the company's returns may be distributed as dividends to shareholders. Distribution from Norwegian limited liability companies can only take place subject to the rules relating to dividend, capital reduction, merger or demerger and repayment on dissolution of a company. The general meeting decides whether or not dividends shall be distributed.
ILN Corporate Group – Establishing a Business Entity Series
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