The Norwegian Tax Authority has announced that digital value-added tax (VAT) reporting will be implemented with effect from 2022 with testing from the third quarter of 2021. The new digital VAT return will be submitted directly from the enterprise resource planning (ERP)-system based on the standard audit file for tax (SAF-T) standard VAT codes.

This Alert summarizes the current information on this new reporting process.

Digital VAT reporting

The current Norwegian VAT return is based on a fixed set of boxes and is manually submitted through the Altinn-portal. The new digital VAT return will be submitted directly from the ERP-system via a specific API (Application Programming Interface – a type of software intermediary).

The new digital VAT return will be based on standard SAF-T VAT codes that are required under current Norwegian SAF-T audit requirements. The new VAT return will be flexible in the sense that amounts will only need to be reported in relation to the transaction type/SAF-T code where there has actually been activity in the accounting system during the relevant period.

The new digital VAT return will also contain separate fields for the reporting of VAT on the self-supply of goods and services, VAT adjustments made under the capital goods scheme and VAT corrections due to bad debts.

The due dates for the reporting and payment of Norwegian VAT will remain the same as the current due dates.

The format and content of the VAT reporting will be validated by the tax authorities’ portal at the time of submission. The digital VAT return will only be accepted as received by the authorities if this validation is passed.

Testing and implementation

According to the Norwegian Tax Authority, testing will be available from the third quarter of 2021.

The expected implementation date is 1 January 2022.

The Tax Authority is also working on the implementation of so-called “VAT listings,” which is a formal requirement to periodically report transaction data to the Tax Authority along with the VAT returns. The level of detail and specific requirements is not yet clear, but it is expected that the data to be submitted on such a listing will include invoice number, invoice date, customer/supplier details, price and (any) VAT amount. Proposed new regulations are currently being assessed by the Ministry of Finance and a public hearing of new regulations is expected during 2021.

Preparing for digital VAT reporting

To be able to report VAT based on standard SAF-T codes, all VAT codes in the ERP system must be mapped towards the correct SAF-T codes. In practice, many businesses use inconsistent or incorrect VAT codes leading to reporting of turnover/VAT in the incorrect boxes in the current VAT returns. From 2022, there is a risk that the VAT return will not be accepted as submitted in the case of inconsistencies or incorrect use of VAT codes.

Businesses should assess the quality and integrity of the tax data in their systems (e.g., through using Tax Analytics tools), and how their VAT codes and processes are set up to enable correct tax decisions and data, ahead of the Tax Authority requiring such information on an ongoing basis through the new digital VAT return.

EY has experience with assisting taxpayers in assessing their VAT handling, tax processes, as well as the use/mapping of VAT codes. Our team also has experience with all ERP systems in the Norwegian market and can assist in preparation for the new VAT reporting requirements.

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For additional information with respect to this Alert, please contact the following:

EY Norway, Oslo

• Øystein Arff Gulseth | oystein.arff.gulseth@no.ey.com