Reimbursement of non-recurring tax when exporting motor vehicles

In Norway, one has to pay a non-recurring tax when registering a motor vehicle for the first time. This applies regardless of whether the vehicle is brand new or has been used outside of Norway. The tax paid is non-refundable. However, the government has now proposed a change in these rules, which will entail a proportionate refund of the non-recurring tax if the motor vehicle is exported from Norway.

The non-recurring tax is paid to the government when registering a motor vehicle in Norway for the first time. Registration accrues regardless of whether the motor vehicle is registered to a private person or to a business.

EFTA Surveillance Authority (ESA) has evaluated the Norwegian non-recurring tax in regard to leasing of vehicles. They find that it is not in compliance with the EEA-agreement as it prohibits foreign leasing companies from offering their services to persons with permanent residency in Norway. ESA stated that the non-recurring tax on motor vehicles should be proportionate to the use of the motor vehicle – calculated based on the motor vehicles economical life span.

Based on ESAs statement, the Norwegian government proposes to implement a reimbursement scheme for the non-recurring tax when exporting a motor vehicle. The reimbursement is to be a proportional amount of the tax paid upon first time registration.

In our experience, the non-recurring taxation of motor vehicles does have a negative impact beyond the leasing business, for instance when foreign businesses have time limited contracts in Norway and use their own motor vehicles to carry out the job. To prevent a competitive advantage for the foreign business owners have to pay both VAT and non-recurring tax when the vehicles is to be cleared through customs in Norway. The non-recurring tax is often high, and constitutes a high, non-refundable cost even though the vehicle is to be re-exported and never will be used in Norway again.

A scheme with proportional reimbursements for the non-recurring tax will compensate this, and will ensure that the taxation corresponds to the actual usage of motor vehicles in Norway.

The reimbursement scheme ensures that foreign businesses will not have a competitive advantage by using their own vehicles which have never been taxed in Norway. On the other hand, the foreign businesses will not get an unfair cost for one time-usage of own vehicles in Norway.

The reimbursement scheme is proposed to be limited to vehicles which are registered for the first time in Norway the 26th of June or later. If the proposal is passed as law, it will not be set to have retroactive effect in the time before the proposal.

Furthermore, the reimbursement scheme will only apply for motor vehicles which are registered in Norway for the first time within the last ten years.

The reimbursement scheme will entail requirements to the condition, documentation and controls of the motor vehicle, as well as requirements to follow certain procedures. We will come back with more details in this regard when the proposal is enacted into law, and we can be certain of which requirements will be set to qualify for reimbursement.

The scheme will be administered by the Custom Authorities, according to the proposal. If you have any questions regarding non recurring tax or import/export to Norway, please contact associate lawyer Therese Foss on e-mail therese.foss@visma.com or phone +47 905 11 801.

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Therese sitt spesialfelt er merverdiavgift, men hun arbeider også med generell forretningsjus. Therese kom til Visma Advokater i 2012 etter tre år i Skatt Øst, hvor hun jobbet i seksjon for merverdiavgift.
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