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What do you need to know about SAF-T accounting if you run a business in Norway from abroad, with or without a VAT representative?

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If you are a foreign business operator who conducts taxable and/or VAT liable business in Norway, you have a bookkeeping obligation according to the Bookkeeping Act. This also includes the requirement that the bookkeeping information must be available in a standardized form, known as SAF-T Accounting. Even for the foreign business operators who are registered in the VAT Register with a representative, it is important to note that there are no specific exemptions from these requirements.

Bookkeeping and SAF-T accounting for foreign business operators in Norway

If you are a foreign business operator who conducts taxable or VAT liable business in Norway, you have a bookkeeping obligation according to the Bookkeeping Act. This means that you must record all information that is necessary to prepare the mandatory accounting reporting, such as annual accounts and tax return for VAT.

You must also be able to reproduce the bookkeeping information in a standardized form (SAF-T Accounting) if the Tax Administration requests it during a control. SAF-T Accounting is an electronic format that makes it easier for the Tax Administration to analyze and compare accounting data from different businesses.

The requirement for SAF-T Accounting applies regardless of whether you have an obligation to register in the VAT Register with a representative or not. A representative is a person or an entity that has the authority to act on behalf of the foreign business operator in relation to the VAT Act.

If you only have mandatory accounting reporting to Norway in the form of a tax return for VAT, the bookkeeping obligation will naturally be limited to the information that should be included in this tax return, as well as relevant specifications. Specifications are detailed overviews of, among other things, accounts, customers, suppliers and VAT.

Requirements and challenges associated with delivering a SAF-T accounting file

To be able to deliver a SAF-T accounting file that meets the requirements for content, you must ensure that the bookkeeping complies with Norwegian bookkeeping rules. This can pose some challenges, depending on how you organize and carry out the bookkeeping for the Norwegian business. It is not a requirement that the accounting system generates the SAF-T file. It is allowed to use a third party that offers SAF-T conversion, such as PwC also offers. A challenge can be if the bookkeeping takes place abroad as an integrated part of the main company's bookkeeping. Then it can be difficult to separate the transactions that relate to the Norwegian business, and to meet the requirement for audit trail. Audit trail means that there must be a clear connection between the bookkeeping information and the underlying documentation.

To solve this problem, you must establish systems that allow you to use a separate number series for the Norwegian business's transactions and dispositions. You must also ensure that the customer and supplier specification only contains information that relates to the Norwegian business, and that they show incoming and outgoing balance.

Another challenge can be if the bookkeeping takes place in Norway, but does not include payment transactions. This can be the case, for example, if you use a representative who creates a simple VAT accounting based on invoiced turnover and incoming invoices, but does not set up a separate bank account for the Norwegian business. Then you will not have an overview of whether the invoices are paid or not, and the customer and supplier specification will not show actual receivables and liabilities."

To solve this problem, you should receive information about the payments that relate to the Norwegian business from the parent company, and record them with the correct date and amount in the Norwegian tax accounting. The counter entry to the postings will be the parent company's bank account.

Consequences

If you do not comply with the requirements for accounting and SAF-T Accounting, you may risk getting a coercive fine or a penalty fee from the Tax Administration. Therefore, it is important that you familiarize yourself with the regulations and adapt the accounting to the Norwegian business.

This blog is written with contributions from artificial intelligence "Harvey".

The content of the blog is intended as general information, and should not be considered legal advice. The content is often simplified and is not adapted to the recipient's specific situation. In addition, there may have been changes after the blog was published that are not reflected. We therefore recommend that professional assistance is sought. PwC does not take responsibility for any errors or omissions in the blog, including decisions that are wholly or partly based on the content.

Øystein Tungen

Øystein Tungen

Øystein works in Advokatfirmaet PwC with responsibility for technology development and digitalization of the service areas in the Law Firm. Furthermore, Øystein is the contact person in PwC Norway for SAF-T reporting, and he works closely with the various technology environments in PwC to offer the best for the clients. Øystein has a background as an auditor in PwC and is a state authorized public accountant. Øystein has several years of experience as a finance manager in a Norwegian production company with a listed parent company and has practical experience with changing ERP system as a project manager and solution responsible for the finance function.

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