Gramo, Norwaco and TONO will not start collecting VAT from 1 January after the Norwegian Tax Administration has announced that new regulations are being worked on. This will be clear in six months at the earliest. – We are relieved to hear that clearer regulations are on the way, says TONO CEO, Cato Strøm.
/ 23/12/2021 / Willy MartinsenTONO and the other rights organizations will nevertheless not start collecting VAT on their invoices from January 1. It is clear after the Norwegian Tax Administration communicated to the organizations on December 22 that the current regulations do not allow for processing the collection of the tax as the organizations have outlined.
The Norwegian Tax Administration also states in the letter that it is working on a legislative amendment to adapt the regulations, and that it will seek to propose practical and good rules in the area. The agency expects the new regulations to be available in six months at the earliest.
– We are relieved and happy to hear that work is being done to develop new regulations in this area. Existing VAT rules have not been adapted to collective management. This ambiguity has created an untenable situation for our organizations and some members. The announcement from the Tax Administration means that TONO, Gramo and Norwaco will wait to start collecting VAT on rights fees while awaiting new regulations, says TONO CEO, Cato Strøm.
The organizations have also received verbal assurances that the Norwegian Tax Administration has been instructed internally not to initiate inspections due to failure to collect VAT until new regulations are in place. The organizations will continue the dialogue with the tax administration to help ensure that new regulations safeguard the interests of copyright holders, members and organizations.
The reason why the organizations announced that they would start collecting value-added tax is that the tax authorities have decided that the fees the organizations charge for the rights they manage are to be considered turnover under the Value-Added Tax Act.
Furthermore, a change was imposed from the current practice where all remuneration is collected without VAT. Instead, the organizations were to collect VAT based on the tax status of the rights holder.
Failure to collect VAT on remuneration risks rights holders being subject to a subsequent assessment of VAT and any additional tax. It is this uncertainty that the organisations have pointed out as constituting an unsustainable risk for both the organisations and their members.
The organizations considered that the only option to collect VAT in accordance with the current regulations is to collect VAT in their own name. The main reason is that when collecting collective remuneration, it is normally not possible to identify the rights holders' remuneration and VAT when invoicing customers and pass this on to the correct rights holder. The organizations also manage rights for a total of millions of rights holders. On this basis, the organizations applied for registration in the Value Added Tax Register and initiated a dialogue with the Norwegian Tax Administration about the solution.
Read the letter from the Tax Administration here:
For media inquiries:
Willy Martinsen, Communications Manager at TONO, willy.martinsen (a) tono.no, mob 909 65 254
Questions from customers
Send an email to marked@tono.no. NOTE! TONO is closed during the Christmas period, and will answer inquiries in January.
Questions from members
Send email to medlem@tono.noInquiries will be answered in January.