The tax authorities have issued a discussion paper proposing that all booked sales and purchases shall be reported on a transactional level as of 2024. The obligation to submit the sales and purchase list is proposed to apply to all bookkeeping liable entities, with a turnover over a minimum threshold, and will concern almost all companies in Norway. The deadline for submitting comments is 26th November 2021. In this blog we will give you an overview of the most important points in the paper.
Why introduce a new sales- and purchase list?
With the current VAT and tax returns, the tax authorities only receive information on an aggregated level. This reporting is inefficient, and increases the risk of incorrect reporting and tax evasions, in addition to both time- and cost demanding controls.
The new sales and purchase list is the last part of the tax authorities’ initiative to modernize the VAT area in Norway. As part of the initiative, the tax authorities have already introduced a new VAT registration solution, and a new VAT return will be introduced as of January 2022. We have previously written about the new format of the new VAT return here.
The new sales and purchase list aims to discover VAT and tax evasions, as well as making it easier to comply with the VAT and tax legislation. Based on experience from other countries introducing similar reporting requirements (VAT listings) it is expected that the reporting on a transactional level will considerably increase the state’s VAT and tax revenue. It is also expected that companies will be more attentive and ensure correct reporting, when the companies know that their contract parties are reporting on the same transactions. As such, the proposal is expected to contribute to a more even playing field for the bookkeeping liable entities and ensure fair competition.
The proposed sales and purchase list must also be viewed in the light of SAF-T, which was introduced as of 2020. You can read more about the SAF-T requirements in our previous blogs here. SAF-T and the modernization project have launched a digital transformation of bookkeeping, VAT and tax in Norway, with increasingly less room for manual corrections and consolidations before submitting returns and data. As more and more detailed data is shared with the tax authorities, it is increasingly important for companies to have good control of the data registered in their accounting systems.
Who will be liable to report the sales and purchase list, and when?
The proposed reporting obligation will apply to all bookkeeping liable entities, as well as public entities. This entails that essentially all businesses will be covered by the new requirements, including companies that are not registered for VAT and companies that are not tax liable. Certain companies can for example be bookkeeping liable without being tax or VAT liable, e.g. housing cooperatives or foundations.
The discussion paper suggests two alternative minimum thresholds for when the reporting obligation will apply, based on the entity's annual turnover (NOK 200 000 or NOK 500 000). The proposed lowest threshold is relatively low. In our opinion, it will be quite burdensome and costly for smaller companies to prepare and report the sales and purchase list. Vi recommend that small businesses make use of the opportunity to give comments to emphasize the practical challenges the proposition may create.
For VAT registered entities and public entities, it is proposed that the sales and purchase list shall be submitted at the same time as the VAT return (usually bi-monthly). The same deadline will apply for VAT liable entities with shorter VAT terms, but it will be optional to choose the shorter period if preferred.
Bookkeeping liable entities that are not VAT liable are expected to submit the sales and purchase list annually.
Which information shall be included?
All booked sales and purchases on a transactional level shall be reported, including:
- Specification of the parties, incl. organisation number
- Information required by the Bookkeeping Regulation (invoice number, invoice date, consideration/sum, VAT, etc.), as well as some proposed new additions
The list shall however not include information about what the specific transactions concerns, and potential discounts, etc. shall not be specified.
With exception of the invoice number and the customer's organisation number, bookkeeping liable entities are already required to book the required information. The identification of the parties using the organisation number will provide a unique identificator, and it is therefore suggested to introduce a new requirement in the Bookkeeping Regulation to also specify the customer’s organisation number.
The proposed transactions list also implies that sales to, and purchases from, private consumers shall be reported (B2C). The same applies for imports and exports. For B2C-transactions, from both a practical and privacy point of view, it is proposed that private consumers are not identified.
For transactions with private consumers and suppliers/customers abroad, it will therefore not be possible to verify the information from the other party's sales and purchase list. It is however proposed as a part of the sales and purchase list as the reporting will enforce correct reporting and correspond with the transactions in the VAT return.
Service and guidance assistance
The discussion paper further proposes to establish a service solution, where companies can find an overview of reported data for the individual term, as well as historical data and compiled data for several terms. Making the data easily available will hopefully enable companies to identify mistakes and facilitate correct reporting.
The deadline for comments is 26th November - what to do now?
The proposed sales and purchase list will concern almost all businesses and companies in Norway. We therefore recommend reading the discussion paper and consider the need to submit any comments. We are happy to discuss or assist with preparing remarks or comments to the proposed rules. The deadline to submit comments is 26th November 2021.
Once the deadline is passed and the new rules are implemented, we recommend early on to prepare for the new reporting. It is proposed that the reporting will be based on relevant parts of the SAF-T structure. As such, keeping the sales and purchase list in mind when preparing for the new VAT return from 2022 and setting up new ERP-system functionality is key.
Mitt navn er Silje Guttormsen og siden 2016 har jeg jobbet med merverdiavgift i Advokatfirmaet PwC. Til daglig arbeider jeg med merverdiavgiftsrettslige forhold generelt, og bistår både nasjonale og internasjonale selskaper med salg av varer og tjenester i Norge og utlandet. Gjennom bloggen håper jeg å kunne bidra med gode og nyttige tips og råd, og å spre kunnskap om merverdiavgift. Ta gjerne kontakt om det er temaer du ønsker vi skal blogge om eller om du har spørsmål eller ønsker å slå av en prat.
My name is Silje Guttormsen and I work as an associate lawyer at PwC Tax and Legal Services. Through my work at PwC, I assist both Norwegian and international companies with VAT advice on Norwegian and international queries, supply of goods and services in Norway and abroad, merger and acquisition and efficiency improvement from a VAT compliance perspective. I hope to contribute with helpful tips and advice concerning VAT. Reach out if there are any topics you would like us to write about, or if you have any questions or just want to have a chat.
Ta gjerne kontakt med meg dersom det er noe du lurer på.
My name is Synne Hangeland and I work as a lawyer at PwC Tax and Legal Services. I assist clients with general VAT advice on Norwegian and international VAT matters, as well as in connection with national and cross border restructurings. I have worked at PwC Tax and Legal Services since 2013. If you have any questions, comments or input, feel free to contact me!