Cross-border electronic services and the need for international cooperation: the Norwegian experience

One does not need a crystal ball to foresee that efficient ways of collecting VAT on cross-border digital supplies are vital to the future of VAT. In 2011, Norway implemented new rules which make cross-border supplies of electronic services to private individuals in Norway liable to VAT. But the resources allocated for handling and developing this new area of VAT seem highly inadequate—perhaps not unlike the situation in many other jurisdictions. Nevertheless, given the fact that the Norwegian rules are modelled after the OECD recommendation that services that are ‘capable of delivery from a remote location’ should be taxed at destination, the Norwegian experience is of interest beyond that country’s borders. Furthermore, in an article in WJOVL volume 1 issue 1 (2013), Marie Lamensch voiced many critical observations attending the reverse charging (B2B) and single registration scheme (B2C) applied by the EU VAT Directive. Her ambitious proposals may, however, overshadow the fact that a more compromise-oriented and practically minded cooperative attitude on the part of national VAT authorities may represent a considerable step forward in this very tentative and pioneering phase of collecting VAT on cross-border supplies of electronic services. It is possible to approach the area of cross-border electronic services as a new and exciting area of possible tax revenue—for governments of both developed and developing countries. The glass is not half empty, it is half full.