2026 VAT liabilities and deduction changes consultation launched
The Noreigan Ministry of Finance has launched a consultation on proposed amendments to the Value Added Tax (VAT) rules for cross-border trade in remotely provided services. The consultation, open until 21 June 2025, aims to address discrepancies in VAT treatment that currently favour international companies over Norwegian businesses.
See our Norway VAT guide for more details.
Closing non-resident service providers VAT loophole
Remotely provided services, such as consultancy, marketing, and ICT, are those that are not tied to a specific physical location. Under existing VAT rules, international companies with operations in Norway can avoid VAT on services purchased abroad for use in Norway. This occurs when these services are used in activities not covered by the Value Added Tax Act, leading to an unfair cost advantage over purely Norwegian companies that must pay VAT on similar services. Financial service providers, in particular, have exploited this loophole.
3 VAT reforms to level playing field
The consultation includes three key proposals:
1. Expansion of VAT Liability on Remotely Delivered Services
• The proposal seeks to amend Section 3-30 of the VAT Act, ensuring that international companies purchasing remotely provided services outside Norway for use in Norway are subject to VAT.
• The new rule would only apply when the purchased service is used for activities not covered by the VAT Act. If the service is used in VAT-deductible activities, the company would not need to apply VAT under this provision.
• This change is aimed at ensuring fair treatment between Norwegian and international businesses when purchasing remotely delivered services.
2. Extended Right to VAT Deductions for Services Used Outside Norway
• International companies purchasing services in Norway for use outside the country will be granted a right to deduct VAT.
• This measure prevents foreign businesses from incurring an unnecessary final VAT burden in Norway when the services are consumed abroad.
3. Equal Treatment for Financial Services Providers
• A special rule is proposed to ensure that companies selling financial services directly to Norwegian customers from abroad face the same VAT obligations as those operating from within Norway.
• The implementation date for this provision will be set by the King.
Implementation Timeline and Public Consultation
• The Ministry proposes that the changes come into effect on 1 January 2026.
• Interested parties can submit their responses via the government’s consultation portal. All responses will be publicly available under the Public Access Act.
These amendments aim to close tax loopholes, promote fair competition, and ensure a level playing field for both Norwegian and international businesses operating in Norway.
