I live in Norway. That’s about the most positive thing I can say right now.
To the rest of the world: Please accept my deepest apologies for what is about to happen to you. You see, from now on, you need to handle the Norwegian tax authorities. It’s the nightmare of a lifetime, because the Norwegian tax authorities are under no scrutiny but their own and can decide to impose whatever fine they like, usually just to tick you off enough to do whatever they please.
And, from July next year, you, as a foreign citizen who may never have been to Norway, much less done anything here, will now be subject to the same tyranny. At least if you ever want to sell anything online, anywhere in the world.
Think this sounds insane?
Welcome To the Future of E-commerce!
Here’s the deal.
Norway is a stinking rich country and we’re arrogant as hell from it. Because we usually make more money than most other countries (for which, I’m told, we’re supposed to be proud, not apologetic), selling stuff in Norway is good business. We are happy to pay $10 for a beer for crying out loud, not to mention $8-9 for a gallon of gas. Business for international companies selling to Norway is good.
That has to stop, according to the Norwegian government. After all, we can’t have the rest of the world be happy, nor can we afford Norwegians the luxury of foreign goods. We have, after all, almost 4 million people, so we should be able to produce anything better than everyone else. Who cares about prices, we’re rich! Who cares about competition, we need to protect our own!
So, today, the Norwegian government…
Wait, you need to sit down for this. There will be an uh-huh moment first. After that, don’t drink anything that will spurt out of your nose and ruin your monitor as you laugh what will likely be the most manic laugh you’ve ever experienced. Oh, and after that, and this applies to females mostly, be prepared to redo your makeup as your tears run down your face when you realize this is no joke.
Back to the matter at hand. Today the Norwegian government decided that everyone in the world needs to adhere to Norwegian tax laws if you are selling to Norway. That’s the uh-huh moment. After all, if you’re doing business in another country, you need to respect the laws of that country.
In Norway, we have VAT, or value added tax, imposed on virtually everything we buy. Companies need to charge customers an additional 25% on everything they sell to consumers. Then, they need to file those taxes with the Norwegian tax authorities and pay that money to the same institution.
Still nothing extraordinary about this. Many countries have similar laws.
Of course, dealing with the tax authorities in any country seems to be fairly commonly known as more painful than having your tonsils removed with a power drill.
Congratulations to you, you are subject to not only your own tax authorities, but if you put a website up to sell anything, you’re also subject to Norwegian tax laws.
Haha, You’re Joking! Right? Please..?
The problem, of course, appears when you start thinking globalization and online business. You see, selling across borders is about as commonplace as brushing your teeth these days. Write something nice, put it up on a website, open a PayPal account, and poof, you’re in business.
As long as you collect, report, and pay Norwegian taxes for anything you sell to anyone living in Norway.
That’s right. Anyone selling online, who may at some point sell to a Norwegian resident, now needs to register with the Norwegian tax authorities and specifically collect 25% tax on services, downloads, or other electronic goods sold to Norway. If you sell membership to a site, or an eBook you wrote, and I buy it, you need to make sure you collect an additional 25% from me and file those taxes with the Norwegian tax authorities, and then you need to send that money to Norway.
If you don’t collect it, the Norwegian tax authorities may take that 25% from you anyway, and, according to Norwegian tax laws, impose another fine of up to an additional 50%, depending on their mood. In short, you’re profits just dropped by 75% not to mention the hassle of the paperwork and the legal issues, unless you do as we say.
Prepare Your Makeup Redo
Yeah, I know this sounds insane.
Think I’m joking? Well, here’s the entire press release from the Norwegian ministry of finance, detailing the nightmare:
As you can read, this isn’t at all bad, at least according to them. After all, Norwegian consumers (that’s ‘us’) aren’t burdened by this beyond the fact that all prices for foreign services (like website access or ebooks) will rise by 25%. We probably wont mind the sudden 25% increase in prices, because we’re still stinking rich.
Oh, and there will be a simplified registration processes for the rest of the world (that’s ‘them’) so after you’ve completely rebuilt your eCommerce solution to handle Norwegian customers, added additional disclaimers to all your sales pages to inform Norwegians that a special price applies to them, and you’ve set up your manual payment of the taxes, and you’ve set up the procedures for handling those new Norwegian tax laws, you’ll have no problems at all registering to give us the money.
It’s actually been like this for a while, but only for physical goods. In the case of physical goods, the customs people will charge us lowly peons and send the money to the tax authorities. No foreign business was ever affected by this.
With online business, however, things change, because there is no physical shipment to inspect and hold while taxes are paid. You buy something online and have immediate access. “Aha!” says the Norwegian tax authorities, “We’ll make the seller responsible for collecting those taxes, regardless of where they are located in the world!”
They Can’t Do That!
“I don’t care”, you think, “because Norwegians can’t touch my bank account”.
You’re right, we can’t. That doesn’t stop us, however, from controlling our banks, and by extension, the credit or debit cards used for the transactions. If the Norwegian tax authorities find that I have paid you something for which you haven’t paid taxes to Norway, they can easily reverse the charges on the credit card, and VISA, I can assure you, does have the power to touch your bank account.
Look, your eyes may not pour rivers of tears yet, but if this new proposal passes (and, let’s face it, in a decent democracy, only one party decides, conveniently the same party that made the proposal), your online business is at risk. This particularly affects smaller companies and mom-and-pop shops that only do minor business online.
So, there you have it. If anyone needs a house-broken SharePoint developer in a country that doesn’t screw up like Norway does, drop me a note. I’m particularly open to opportunities in the Bay area.
Also, I’m seriously considering stopping any sales of journal issues and academy training to Norwegians.
To my fellow Norwegians: You elected the bastards, now you pay the price. Plus 25% tax.
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