Adjustment and reversal of input VAT
Supreme Court judgment 27 October 2020, HR-2020-2060-A, (case no. 20-87995SIV-HRET)
The State reprsented by the Tax Office (Counsel Simen Skjold Søgaard) v. VS Stein AS (Counsel Ivan Skjæveland)
Justices: Matningsdal, Webster, Noer, Bergh, Østensen Berglund
In a development contract with the Norwegian Public Roads Administration, a trader had undertaken to upgrade the road construction on site and transfer the completed measures free of charge to the county authority. The Tax Office ordered the trader to adjust – reverse – deducted input VAT for the completed measures, see sections 9-1 and 9-2 of the VAT Act. The Supreme Court mentioned that the Act's condition "capital goods" included construction measures, see section 9-1 subsection 2 (b) of the VAT Act, and found that it was insignificant for the adjustment requirement whether the measure was completed on the transferor's or the recipient's property, when capital goods in the form of an infrastructure measure imposed by the authorities were subject to a transfer. The adjustment agreement between the trader and the county authority had been entered into after the expiry of the deadline for submitting VAT returns in the VAT period in which the transfer had taken place. The exception in section 9-3 subsection 1 of the VAT Act was therefore not applicable. The District Court's judgment, given in favour of the State, was upheld.