On 1 January this year, the temporary duty limit of NOK 350 on goods from abroad disappeared. But it is still possible to buy textiles from abroad for up to NOK 3,000 without paying duty, if the foreign company is registered in the VOEC list. The VOEC scheme For online shopping of goods with a value of less than NOK 3,000 from abroad, the main rule is that the foreign sellers/e-commerce platforms calculate and pay VAT. The sellers/e-commerce platforms can use a simplified registration and reporting scheme (VOEC – VAT On E-Commerce). As the tax is paid at the time of sale, the actual importation of the goods is exempt from the obligation to declare (customs) at the border. Virke believes this is an enormous competitive advantage. Because while online shops based abroad and registered in the VOEC list do not have to pay duty on goods up to NOK 3,000, Norwegian shops have to pay up to 10.7 per cent duty on the clothes they import from abroad. Head of industry policy in Virke, Jarle Hammerstad. Photo: Peter Svaar Online store believes it will save NOK 45 million Recently, the online store Boozt Fashion won in the Oslo District Court after a dispute with the Tax Agency. Boozt, which sells large quantities of clothing to Norwegians, was registered in Norway, and thus had to pay 10.7 percent duty on all the clothing they imported into the country. They wanted an end to this, and since the company is actually Swedish, they wanted to register on the VOEC list to avoid paying customs duties on the clothes they imported. According to the company, this would save them NOK 45 million annually. The Norwegian Tax Agency believed they could not do this, and took legal action against the company. Boozt won, but the Swedish Tax Agency has appealed the verdict to the Borgarting Court of Appeal. – The Norwegian Tax Agency believes that the business as it is run and appears, including through marketing and advertising, is so strongly linked to Norway that it is required to be registered in the ordinary VAT register. It has also been that for a number of years, says section manager Astrid M. Dugstad Tveter to news. Boozt won the case against the Tax Authority in the district court, but the Tax Authority has appealed. If Boozt wins again, Norway could lose NOK 45 million annually in customs duties. Photo: Anders Fehn The state fears losing a lot of money – If this case holds true, more foreign companies that are registered in Norway now will probably register in VOEC if this result holds. Then the state loses a lot of revenue, says head of industry policy in Virke, Jarle Hammerstad. He points out that Zalando, which is the second largest online clothing company in Norway, would also like to follow Boozt if the verdict is upheld. If that happens, Hammerstad believes that they will save significantly more than NOK 45 million. – 10.7 percent duty with the current margin is difficult to catch up. It gives a big advantage to foreign online stores. We want this to happen, he says. Virke has asked the government and the Storting to look at the scheme. If you do not want to shop from abroad, it is also possible to make short-distance bargains. Read more about it here. Thinks the government should look into the matter Rødt leader Marie Sneve Martinussen believes it is a big problem that international companies engage in creative tax planning to avoid paying tax to the community. – This is another example of tax rules that have loopholes that can be exploited. The government should look at how this loophole can be closed, she says. She is clear that there should be the same rules for Norwegian and foreign online shops. – For practical reasons, it is natural that a foreign store that sells the occasional jumper to Norwegian customers does not have to follow the same regulations as a large importer. But if large players try to exploit the system, the authorities must come up with countermeasures to stop this, she says. Rødt leader Marie Sneve Martinussen believes the government should look at the current rules for importing goods. Photo: Even Bjøringsøy Johnsen / news Ministry of Finance: – Unlucky. She believes that the system apparently does not work, and that the government should look at practical solutions that ensure that Norwegian shops do not have worse conditions than foreign ones. The online store Boozt does not want to comment on the case until it has been decided in the Court of Appeal. The Ministry of Finance writes in an email to news that the duty exemption was assessed as a necessary simplification measure to put in place the scheme where you now pay value added tax for goods under NOK 350 from abroad. – At the same time, it was pointed out that this exemption is in principle unfortunate, points out the Ministry of Finance. The court case between the Swedish Tax Agency and Boozt will be heard in the Borgarting Court of Appeal on 20 March.
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Norwegian online stores can save millions by moving production abroad – news Rogaland – Local news, TV and radio
