“I already have 48 000 NOK. The next invoice will be for 10 000. What do I do?”
This is the moment when the nervous counting begins.
First invoice:
12 000.
Second:
18 000.
Third:
18 000.
Total:
48 000 NOK.
Another client comes in.
Service:
10 000 NOK.
And you start to think:
“Maybe I'll add 25% only to the 8 000 over the limit?”
No.
Or:
“Maybe from the next invoice?”
Not that either.
The VAT threshold doesn't work like a step where the first 50 000 is permanently outside the system and the tax only starts from 50 001 kroner.
You need to understand the moment when the threshold is exceeded.
First: 50 000 NOK of what?
Not:
profit.
Not:
money in the account.
Not:
issued offers.
It's about the sale of goods and services that are subject to VAT.
For ordinary business the threshold is:
50 000 NOK excluding VAT in a 12-month period.
And very important:
it does not have to be:
January 1 → December 31.
It can be:
March → February,
August → July,
October → September.
This is a rolling 12 months.
Official page:
Skatteetaten — registration in the VAT Register
ENK or AS? For the VAT threshold it doesn't matter
This is a common misunderstanding.
Someone assumes:
“ENK does not pay VAT.”
Or:
“AS must have VAT from the beginning.”
No.
The VAT threshold does not depend on whether you run:
ENK,
AS,
or another form of business.
What matters is the nature of the sales and the amount of turnover subject to VAT.
That is:
ENK can be in the VAT Register.
And:
AS may still not be in the VAT Register.
The company form and VAT registration are two different things.
Do you have an organization number? You may still not be VAT-registered
You received an organization number.
The company exists.
You can issue invoices.
But the mere:
organization number
does not yet mean:
VAT-registered.
After registration in the VAT Register the information will appear in the company's data.
This is important also for your clients.
Because only a properly registered company can issue a document with VAT in the normal way.
The most important rule: do not add VAT before registration
Even if you know:
“I'll exceed 50 000 in three days.”
You can't just say:
“I'll start charging VAT now.”
Skatteetaten says clearly:
before registration in the VAT Register you do not issue invoices with VAT.
This means that you should not issue:
10 000 + 2 500 VAT
just because you think you're about to cross the threshold.
First the condition must be met and the proper registration carried out.
What about an invoice that exceeds 50 000 NOK?
Let's go back to the example.
You have:
48 000 NOK in sales.
The next service:
10 000 NOK.
After this sale:
58 000 NOK.
It is this sale that causes the threshold to be exceeded.
After registration in the MVA Register you must account for MVA on the entire sale that caused the threshold to be exceeded, and not only on the 8 000 NOK over the limit.
So you do not calculate:
8 000 × 25%.
If the whole service of 10 000 is subject to the standard rate:
MVA applies to the entire transaction.
This is one of the most common mistakes made by new entrepreneurs.
But I wasn't allowed to issue an invoice with MVA before registration
Exactly.
And that is why there is a transitional procedure.
If you have not yet sent the invoice, you can wait for the registration confirmation and then issue the correct invoice with MVA.
If the invoice has already been sent without MVA:
after registration it must be corrected.
Skatteetaten describes a solution consisting of:
crediting the invoice without MVA
and issuing:
a new invoice with MVA.
In certain situations it is also possible to subsequently invoice just the MVA amount with reference to the original invoice.
Do not resolve this by manually adding:
"+25%"
to the old PDF.
Documentation must be proper for accounting.
Be careful with a private client
Assume that you told the client:
"The whole thing will cost 60 000 NOK."
You did not agree that MVA would be added later.
After registration it turns out that the sale must be accounted for with MVA.
If, according to the contract, you cannot invoice the tax to the client, it may turn out that the MVA must be paid from the amount you have already received. Skatteetaten describes exactly such a case as settlement of the tax from the gross amount.
That means:
a poorly set price may result in the tax not being added for the client.
It will come out of your margin.
Therefore, when you approach the threshold, it is good to know this before signing a larger contract.
Is the threshold exactly 50 000?
The obligation arises when sales exceed 50 000 NOK.
So:
50 000 exactly
is still not:
over 50 000.
But the next sale that causes an exceedance triggers the registration obligation.
However, do not try to steer your activity so that for months you hold invoices at 49 999 NOK.
Actual activity and the moment of sale/delivery count, not artificially moving documents just to avoid registration.
25% not always
The most well-known rate is:
25%.
And it applies to most goods and services.
But the system also has other rates.
Currently:
25% — the standard rate,
15% — among others food and beverages and certain water and sewage services,
12% — among others passenger transport, accommodation and some cultural and entertainment services.
Therefore do not apply the rule:
"I have MVA = I always add 25%".
First check which rate applies to what you sell.
Skatteetaten — current MVA rates
And some services do not work at all like the regular 25%
And here the important distinction begins:
exempt
and:
exempt.
Sounds similar.
Tax-wise, it's not the same.
Excluded from the Value Added Tax Act
This is sales excluded from the MVA system.
An example could be certain educational services.
In such a case:
you do not add MVA,
and the turnover from that part of the activity basically does not operate the same way as sales covered by the system.
Exempt
Here the sale is subject to the MVA system, but the rate is:
0%.
Such sales can still count toward the registration threshold and may give the right to deduct input MVA.
That's a huge difference.
So it's not enough to say:
“there's zero VAT on my invoice”.
You need to know:
why it is zero.
Skatteetaten — the difference between fritak and unntak
Buying equipment before reaching 50 000 NOK? Keep the invoices
This is very good, important news.
Don't assume:
“I'm not yet MVA-registered, so the MVA on the laptop, tools or equipment is forfeited”.
After registration you may have the right to the so-called:
retroactive VAT settlement
that is, deduction of input MVA from certain purchases made before registration.
Condition:
the purchase must have a direct connection to the later registered activity.
And it cannot, for example, have been used earlier exclusively in a hobby activity or sold before registration.
In certain cases the right may cover purchases even up to:
3 years before registration.
This means:
keep proper invoices from the start of the activity.
Not just receipts stuffed into the car pocket.
Example
You buy before registration:
tools for 25 000 + MVA.
Later the company exceeds the threshold and is registered.
If the purchase meets the conditions and was intended for activity covered by MVA, you may have the right to deduct the previously charged tax.
This does not mean:
“I'll now put every private purchase from three years ago into the company”.
There must be a real connection to the business.
Can you register before reaching 50 000?
Yes, but not on the basis of:
“because I want to”.
There exists:
pre-registration
that is, registration before reaching the normal threshold.
It may be possible if you meet certain conditions and, for example, it is clear that the activity will quickly reach the required turnover or you are making significant investments related to future sales covered by MVA.
However, it is not an automatic choice for every new business.
Check the conditions here:
Skatteetaten — MVA registration
Where do you register?
You perform the registration digitally through the Skatteetaten solution.
The system asks questions and, based on them, determines the correct type of registration.
Skatteetaten — register a company in the VAT register
You do not have to create a new company.
You also do not get a new ordinary organization number.
After registration the company number is used with the designation:
VAT
on documents where required.
After registration the second stage begins: VAT return
Registration is not only the right to charge VAT.
It is also an obligation to report.
Most registered businesses submit:
a VAT return every two months
that is normally:
6 times a year.
In the declaration you show, among other things:
output VAT
that is the tax charged to customers,
and:
input VAT
that is the tax paid by the company on purchases, which you can deduct if conditions are met.
The simplest example
You sold a service:
100 000 NOK net.
VAT 25%:
25 000 NOK.
At the same time you bought materials:
40 000 net + 10 000 VAT.
In a very simplified example:
you collected from customers:
25 000 VAT.
You paid suppliers:
10 000 VAT.
The difference:
15 000 NOK
is the amount you settle with the state.
This is precisely why VAT should not be treated as:
"an extra 25% of my earnings".
You largely collect this money on behalf of the state.
The worst mistake: you spend VAT like your own money
The account receives:
125 000 NOK.
You look at it:
"Great month."
But:
100 000 is your net sales,
25 000 is VAT collected from the customer.
The final amount to pay may be reduced by input VAT.
But do not assume that the entire 125 000 is company money to spend freely.
A very healthy habit:
from the start, set aside funds for taxes and VAT separately.
Do not wait until the VAT return deadline.
The invoice after registration must be correct
After registration it is not enough to change the price.
The invoice must correctly show:
the taxable base,
the rate,
the VAT amount,
the appropriate company details.
And that is precisely why the next guide will be separate.
Because:
a correct invoice
is more than:
logo + amount + account number.
Foreign company carrying out an assignment in Norway?
The threshold may also concern foreign businesses.
Altinn indicates that a foreign company carrying out sales in Norway subject to VAT exceeding 50 000 NOK over a 12-month period may also be required to register.
This may concern, for example, a company from Poland executing a contract in Norway.
But then additional rules may apply regarding a VAT representative and the place of business.
Do not automatically equate this with a regular Norwegian ENK or AS.
The simplest route when you are approaching 50 000
You have 30 000 NOK
Nothing special.
You monitor the turnover.
You collect expense documents.
You have 45 000 NOK
You start to closely check subsequent sales.
You check whether the activity is subject to VAT.
Another sale will exceed 50 000 NOK
You do not add MVA before registration.
Once you reach the threshold you submit the registration.
Invoice has not yet been issued
After receiving the registration you issue it correctly with MVA.
The invoice has already been sent without MVA
After registration you correct it in accordance with Skatteetaten rules.
After registration
From the proper moment you issue invoices with the appropriate MVA rate.
You keep accounting records.
You submit mva-melding.
Seven mistakes you should really avoid
1. "50 000 profit"
No.
50 000 of sales subject to MVA.
2. "From January to December"
No.
Any consecutive 12 months.
3. "I'll add MVA already at 40 000"
No, if you are not properly registered.
4. "Tax only on the part above 50 000"
No.
Sales that exceed the threshold must be properly accounted for in full.
5. "Every company applies 25%"
No.
Check the rate or the exemption.
6. "MVA in the account is my money"
A very dangerous assumption.
7. "I don't collect invoices before registration"
You may thereby lose the possibility to document a later deduction.
What to do now?
If you do not yet have a company:
ENK or AS in Norway: which to choose?
/internal link/
If you have chosen a form but the company does not yet exist:
How to register a company in Norway step by step
/internal link/
If the company is operating and you are approaching 50 000 NOK:
check the exact turnover from the last 12 months.
Then:
Do not guess.
OFFICIAL SOURCES
Skatteetaten — MVA register
Threshold, time of registration and an invoice exceeding the limit.
Skatteetaten — MVA registration
Skatteetaten — how MVA works
Rates, output and input VAT.
Skatteetaten — exemptions and exceptions
The difference between 0% rated sales and sales exempt from the system.
Skatteetaten — exemptions and exceptions
Altinn — MVA
Basic MVA rules for entrepreneurs.
