VAT on Norvegian orders

robernat

Hi Lawrence, can you elaborate the new VAT setting for Norway.
It's not logical, the VAT gets charged, and get's paid on top of the order, and so the VAT ends up on my Paypal account.
So I need to make a seperate bill for customers from Norway (while normally I'm exempt from charging VAT on non EU orders), on which I need to indicate I collected 25% VAT, and will need to pay that amount trough my Bookkeeper to BELGIUM's VAT department, as I collected it. Not only book keeping wise it's a nighmare, as Belgium's VAT is 21%, but in the end, with this setting Norway doesn't receive the charged VAT at all, while I think the intention is to have it 'pre paid' so customers don't get charged when the package enters Norway.

I took down Uk orders early this year to avoid creating a mess while figuring out how to handle things, now it's on Norwegian orders :-(

Also, does this apply to stores who don't have a VAT setting? Thinking about my C2C store...

Thanks in advance

Lawrence

When you receive one of the order, there should be a link on the order to more information on the Norwegian website. With regards to how to account for this, the best thing to do would be to discuss this with your accountant, as we aren't able to advise on this.

However, I can say, that this tax is paid to Norway by Brick Owl, it is not Belgium VAT, so you do not need to pay it yourself to anyone.

Vosblokjes

Before the change on BO you would not charge VAT on an order from Norway since it was and is outside the EU. Now after the change you still should not charge Belgian VAT, but BO charges the Norwegian VAT on top of the item prices.
This then gets paid from the buyer to you as seller and BO will get it from you through the monthly fees and BO will pay it to the correct authorities.
So you still don't have to worry about the VAT, yes you get more money from your buyer, but pay more in 'fees' to BO.
Bookkeeping wise I think this can be put under some kind of business expense, since you must account for the money getting in and going out.
On your invoice (if you need to make one for your customer) you can make a line for this VAT, but not call it just VAT, but something like VAT collected on behalf/through of BrickOWL.

Hoddie

The problem with the way the US, UK, Norway and no doubt others now do this, is that it potentially raises issues with each seller's local tax authority. What may be Norwegian VAT to the Norwegian authorities may be treated as your income by your local tax authority, with tax/etc. due on it. Even if that's not the case, it presumably needs accounting for on the submissions to your local tax authority otherwise there's no official record of what that money that went through your PayPal/bank account represents.

robernat

Thanks @Baskrie, I see now the VAT part has been added as 'fee' by Brickowl.
My solution is simple to this, I took down Norway as country I ship to.
4 main reasons, same one as UK, and soon USA as well (Bricklink).

a) Exchange discrepancies > on my Norvegian order the charged VAT is €3.26, yet I'm getting billed €3.27 by Brickowl due to the exchange rate Euro <> GBP. I need to 'justify' that discrapancy bookkeepingwise, so a whole lot of hastle over 1 cent.
b) I'm charged 'Paypal' fees on money that isn't mine, it goes out right away, so my benefit drops.
c) I need to split my 'non EU orders' billings and make additional bills justifying the 'in' and 'out' of the VAT, particulary as the VAT amount from all those countries vary (UK-Norway, and USA by state), and I can only assume it's going to be an additional 'hastle' for my bookkeeper who is not used to deal with it (I'm his only client doing online worldwide selling).
d) more hastle to recount values on CN22/CN23 (just spend 5 extra minutes to make one, as I needed to recount order and shipping values, as Brickowl shows them 'included VAT', on top I need to add an additional line with the VOEC number, the amount. And make sure after recounting it fits the 'total cost' at the bottom.

I really don't wanna be bothered with such over €10-15 orders

@Lawrence: You haven't answered my question whether or not this VAT charge is also going to apply on stores who do not have a VAT number listed/embedded, like my C2C store.

Lawrence

@robernat If you follow the link to the Norwegian website, that should have information about who it applies to. As far as I'm aware, the only people which does not apply to, is Norwegian stores, or members located outside of Norway, with a Norwegian VAT number.

robernat

As a sidenote.
If Brickowl would not 'enforce' this VOEC on low budget orders, then my Norvegian order would not have applied for any importduties.

https://www.toll.no/en/online-shopping/350-limit

So maybe you should work with a 'full cost' threshold (without VOEC), and allow sellers to opt 'in' or 'out' for higher value orders (with the VOEC setting).

Vosblokjes

a these discrepancies should not be new. The normal fees were always charged in GBP, so there already was a difference. For bookkeeping a simple row for exchange rate difference should be possible
b yes, your benefit drops, less than (I guess) 5% from the VAT, so 1 cent on every euro sale for the VAT, a minor 1%, even less on the margin form the sale
c no splitting needed, only thing is that for Norwegian orders you have to add a line stating the VAT that will be paid via BO. BO doesn't do USA TAX, no worries there (as far as BO goes, for now)
d yes for the CN 22/23 it is a hastle, allthough, maybe you should declare the value including the VAT? I'm not sure about that. In which case it would be more simple, I'm not sure how that works. My shipments to the UK are including the VAT on the form.

Lastly, yes it is more work and if you don't want it then don't no one is forcing you. But I can't imagine that is as bad as you state, otherwise all EU stores would have stopped orders from Norway (and UK) and that is not the case. But yes, I can imagine it is to much work for the few small orders.
Please do remember that BL will also have to instate the same kind of thing, but are very slow at it for now. They say that for the UK all is well, but I (and quite a few others as well) don't trust that and have stopped shipping to the UK.
And since the EU will be implementing the same sort of thing for all non-EU shoppings, all non-EU countries will introduce something similar, giving even more troubles.
Maybe it is best to now figure out how it should be done so you are prepared for the future

The link you give is only a small part of the website about the 350 limit, but there is also (for example) https://www.toll.no/en/online-shopping/e-commerce---what-changed-on-1-april/the-voec-scheme/
Which states "Foreign online shops and online marketplaces must register with the Norwegian Tax Administration"
So I don't think BO had a choice doing this since it is a marketplace, and as far as I can see there is no restriction if the seller on such a marketplace is a business or consumer.