Quick introduction to VAT
As a freelancer, and especially with your own business (ENK/AS), there is a lot to get to grips with when it comes to invoicing, payment, tax and reporting. It is not always easy to find your way in the jungle of information out there.
Here we have collected useful information about VAT for you who take on assignments as a freelancer.
📈 What is VAT and why do I need to think about it?
VAT is short for so-called value added tax. Value added tax is a tax imposed on all goods and services traded domestically (with a few exceptions, which is specifically exempted).
When you invoice this from your company, for goods or services you have sold, it is called output VAT.
For freelancer is it important to know what VAT is and whether you should add it to the invoice you send to your customer. All businesses are exempt from invoicing VAT up to a certain amount within a 12-month period (at the time of writing NOK 50,000, but remember to stay updated through Altinn's website ).
Once the limit has been reached, the company must be registered in the VAT register, and VAT must be invoiced starting with the invoice that took you over the limit amount. This may mean that you have to credit the last invoice you sent, which exceeded the limit, and send a new invoice that includes VAT.
💰 VAT included
If you have a business, you must add VAT on top of the amount you invoice the customer (as long as you are registered in the VAT register). On the other hand, you also get a deduction for VAT on most goods and services that you buy into the business.
This is called input VAT.
In the same way that you must be registered in the VAT register to add VAT to your invoice, you must also be registered to claim such deductions.
The rates for value added tax are as follows:
- 25 percent: most goods or services
- 15 percent: food and drink
- 12 per cent: passenger transport, cinema tickets and room hire
❌ If you are not VAT registered
If you are not registered in the VAT register, you also do not have the opportunity to collect VAT. To avoid VAT being added to your invoices, it is important to remember to select 0% in the VAT column when creating invoices.
Would you like to read more about how we can help you get paid for your freelance work? Send invoices through PayoutPartner and choose whether you invoicing with company, or if you invoicing without a company and wants a salary after tax.