Have you ever been surprised by the sales sum being higher than initially believed when you’re at a cash register? It’s never fun to forget to add sales tax or VAT to the prices when shopping, but this is luckily a mostly American thing. But that does not mean that there are no sales tax or VAT in Norway.
So what’s the deal with sales tax and added value tax (VAT) in Norway? Let’s take a closer look!
There is a 25 % sales tax known as value added tax (VAT) on most goods in Norway. Food has 15 % VAT. All prices shown in the stores are including VAT, so you pay the sum that is shown to you when shopping.
You won’t really ever need to bring out your calculator when you’re at a Norwegian store, since all prices are shown including VAT. So the price you see at the shelves is the same price you are going to be paying in full, including all sales taxes.
Why Norway’s VAT is so high
You might be shocked by the high sum, seeing as most US states have something like 6 to 8 % sales tax on their goods. 25 % on most things are clearly far higher than most other countries in the world.
But what’s the reason for this high VAT rate? The answer is simply because it drives in a lot of money to the Norwegian government! Yep, it’s that simple. VAT is responsible for a pretty big portion of the Norwegian government’s GDP.
Some items are in a lower VAT bracket
While most items fall in the 25 % VAT category, there are a few exceptions to this general rule.
Food and edible items fall in the 15 % VAT bracket, so most edible items as taxed with a 15 % sales tax. The big exception is restaurants that sit at the usual 25 % VAT rate. This is the reason why some restaurants like MacDonald’s show different prices for take-away and eating at the restaurant. Take-away is taxed with 15 % VAT, while eating in is taxed with 25 % VAT.
Hotels and accommodation, as well as entertainment like cinemas, sport arrangements and things like that has a 12 % VAT. This was temporarily lowered during the pandemic, but is now back at 12 % for most types of entertainment options and hotel-related services.
There are some items that are completely free from VAT, including books, newspapers, health related appointments such as a visit to the doctor or ER and a few other things. However, the items that have 0 % VAT are mostly rare.
Businesses get VAT refunds
Business to business sales are taxed with VAT just like any other sale, but the buyer will get the entire sum refunded from Norway’s tax administration at a later point. So in reality, businesses does not need to pay VAT on purchases at all.
The reason for this is that the value added tax is supposed to only be added to the final stage of a sale when the product is sold to a private individual.
It’s legally required to have all prices shown including VAT
You will pretty much never find a store that show sale prices without including VAT in these prices here in Norway, so you can be sure that the sum you’re seeing at the shelves is the same as the one you will be paying at the register.
This is a requirement by Norwegian law, so it’s illegal for businesses to show prices with VAT.
The only exception is if the store is aimed primarily at businesses, and rarely have private buyers. So you might see prices without VAT if you somehow end up in a B2B store. That said, these are rare for tourists to get into, and I haven’t really seen many of these in my 30 years of living in Norway.
You can get refunded VAT on big purchases as a tourist
You might be entitled to a VAT refund if you have a permanent address outside of Scandinavia, due to the fact that the Norwegian VAT is intended for items that are supposed to be used inside Norway.
So if you are buying something in Norway with the intention to bring it back outside of Norway, you might get a VAT refund. However, there are some rather strict laws and regulations you need to keep in mind if you are going this route.
The short summary is that you need to fill out a form when you buy an item that you want a VAT refund for. The minimum price is set at 315 NOK. You pay the full price in the store, but you get a receipt and documentation for the sale. This is then used to claim a VAT refund when you get back to your own country.
It’s a bit complex, and the final part of the refund is a bit different between each country. But generally speaking, you get a VAT refund of between 12 and 19 % on most items as long as you remember to use the VAT refund form. This must be filled out and signed in the store when you buy the item!
And keep in mind that this is only for items that are bought to be used outside Norway, so you won’t be able to get a VAT refund for food or amenities. You need to physically declare the item when you return to your home country in most cases.
The VAT refund is often used to buy items that are generally cheaper in Norway than in most countries, such as expensive camera gear, luxury watches, electronics and more.
