VAT for sole proprietorships: the 50 000-kroner threshold

If you have a sole proprietorship (ENK) in Norway, you must register for value-added tax (VAT) when your turnover exceeds 50 000 kroner over twelve months. Then you add VAT to your invoices and can deduct the VAT on what you buy. Here is the threshold, the rates and the pitfalls many new self-employed people fall into.

What is VAT, and what is a sole proprietorship?

Value-added tax (VAT) is a tax on the sale of goods and services. The customer pays the tax, and you as the seller collect it on behalf of the state. A sole proprietorship (ENK) is the simplest business form for one person who operates for their own account and risk.

When you operate an ENK, you are solely responsible for both income tax and VAT. These are two different things: you pay tax on the profit, while VAT you add to the price customers pay. If you want to understand the tax side better, read tax in Norway simply explained for immigrants. If you are unsure how to set up the business, SamfunnPrep has a guide on how to register a sole proprietorship.

When must a sole proprietorship register for VAT?

You must register in the Value-Added Tax Register when VAT-taxable turnover exceeds 50 000 kroner over a period of twelve months (the Value-Added Tax Act § 2-1, as of July 2026). The threshold does not follow the calendar year, but any rolling twelve-month period. The amount is calculated without VAT, that is, net turnover.

It is the sale that puts you over 50 000 kroner that triggers the obligation. The invoice that breaks the threshold should have VAT added – but then the business must be registered first. If you exceed the threshold on 15 March, the VAT obligation applies from and including that invoice.

You register yourself through Coordinated Registration Notice in Altinn, the public portal for businesses. If you are sure you will quickly exceed the threshold, you can apply for advance registration and add VAT from the first kroner.

For charitable and non-profit organizations, the threshold is higher: 140 000 kroner over twelve months (§ 2-1). Ordinary sole proprietorship owners always have the 50 000-threshold.

Some services are exempt from VAT altogether. Then you should neither add VAT to sales nor deduct VAT on purchases:

• health services (doctor, dentist, physiotherapy) – Value-Added Tax Act § 3-2
• educational services (courses and training) – § 3-5
• certain financial services (loans and insurance) – § 3-6

If you only provide such services, you may never reach the registration obligation.

Which VAT rates apply in 2026?

Norway has three VAT rates. The most common is 25 per cent. The table shows what applies (rates as of 2026, the Tax Authority):

If you sell, for example, consulting services or craft work, you use 25 per cent. If you operate a small restaurant, you use 15 per cent on the food. The correct rate should appear on the invoice you send to the customer.

How the VAT return works

When you are registered, you submit a VAT return (formerly called a sales statement) to the Tax Authority. There you enter output VAT (the tax you have collected from customers) minus input VAT (the tax you have paid on your own purchases). You pay the difference to the state, or get a refund.

A simple example: if you have collected 25 000 kroner in VAT from customers and paid 5 000 kroner in VAT on your own purchases, you pay 20 000 kroner to the state. If purchases are larger than sales, you get money back.

The main rule is that the VAT return is submitted every other month – six times a year. The deadline is one month and ten days after the period ends. If you have no turnover in a period, you must still submit a "nil return".

If your turnover is under 1 million kroner per year, you can apply for an annual VAT return. Then the deadline is 10 March the following year. But you must have been registered with ordinary periods for at least twelve months first. A new sole proprietorship cannot start directly on annual reporting.

A benefit many overlook is retroactive VAT settlement. When you are registered, you can deduct input VAT on goods and services you purchased up to three years before registration, as long as the purchases are used in the VAT-taxable operation (Value-Added Tax Act § 8-6). If you bought a computer or tools before you exceeded the threshold, you can get the VAT back.

The pitfalls new self-employed people fall into

The most common pitfall is to add VAT to invoices before the business is registered. You are not allowed to do that. You cannot invoice with VAT before registration is approved.

The expensive pitfall is the opposite: waiting too long to register. The Tax Authority can recalculate the VAT you should have collected, and in several appeal cases has added a 20 per cent surcharge. If you failed to add VAT to the invoice that broke the threshold, you must either send a revised invoice to the customer or pay the tax from your own pocket.

In short – here is what you should watch out for:

• keep track of when turnover approaches 50 000 kroner
• register in the Value-Added Tax Register via Altinn as soon as you exceed the threshold
• do not invoice with VAT before you are registered
• keep all receipts – they give you a deduction for input VAT
• submit the VAT return on time, also nil returns

If you are choosing between operating as a freelancer or sole proprietorship, SamfunnPrep explains the differences in freelancer or sole proprietorship: tax, VAT and safety net. If you are considering a limited company instead, you can read about starting a limited company or sole proprietorship. If you are paying tax for the first time, the guide paying tax in Norway for the first time will help you further. More practical tools for newcomers to Norway can be found in toolkit for newcomers.

The rules about tax, fees and working life are also part of the curriculum for the social studies test. Practice for free on SamfunnPrep, so both the rules and everyday life make more sense.