Excise duty: what it is, which goods it applies to and who administers it

Many businesses importing goods into Norway come across the term excise duty without quite knowing what it covers. Is it the same thing as customs duty? Is it always payable? Who administers it, and how is it calculated? In this guide we answer all of those questions: what excise duty is, which categories of goods are affected, who sets the rates, and how excise duty ties in with customs duty and VAT in a typical import.

If you would first like an overall view of every charge that can arise on import, we recommend the guide What is customs duty? Duty, VAT and excise duty, which is the pillar article for this topic.

What is excise duty?

The Norwegian Tax Administration (Skatteetaten) defines excise duties as duties payable on the import, production or sale of certain types of goods. It is not one single duty but an umbrella term for a range of duties imposed on particular products, often with a health, environmental or distributional policy purpose.

Excise duty differs from the two other charges on import in one important respect:

• Customs duty applies only to one particular class of goods (in practice textiles and foodstuffs) and is determined by the commodity code in the customs tariff. Norwegian Customs (Tolletaten) administers it.
• VAT applies, as a general rule, to all goods (25 % standard, 15 % on foodstuffs). The Norwegian Tax Administration administers it.
• Excise duty applies to selected goods and types of business where the Norwegian parliament (Stortinget) has decided an additional duty is payable. The Norwegian Tax Administration administers them.

Which goods carry excise duty?

Norwegian Customs lists the most common categories affected in its import guide. According to toll.no, there is excise duty on, among other things:

• Alcoholic beverages (alcohol duty)
• Non-alcoholic beverages
• Sugar (sugar duty)
• Tobacco products (tobacco duty)
• Beverage packaging
• Vehicles, through the one-off registration tax (engangsavgift) on first-time registration

Excise duty may also apply to other goods and businesses. The Norwegian Tax Administration publishes the full list of all current excise duties on its website.

One excise duty at a time, not one rule for everything

An important consequence of excise duty being an umbrella term is that you cannot read off a single rate and apply it to every product. The alcohol duty has its own rules and rates, the tobacco duty has its own, and the one-off registration tax on vehicles is calculated from the vehicle's technical characteristics such as CO₂ emissions, engine power and kerb weight. You therefore need to know the category of the goods you are importing in order to know which excise duty is relevant.

Who administers the excise duties?

One point that can cause confusion for importers: Norwegian Customs and the Norwegian Tax Administration share responsibility for the charges on import.

• Norwegian Customs administers the customs duty and handles border control. It is Norwegian Customs that receives the declaration and checks the goods as they cross the border.
• The Norwegian Tax Administration is responsible for administering excise duties and import VAT. Responsibility for the excise duties was transferred to the Norwegian Tax Administration in 2016.

In practice this means that you deal with Norwegian Customs for the declaration itself, while it is the Norwegian Tax Administration that administers the rules for the excise duties you have to pay. If you want to understand the role of Norwegian Customs and its requirements at the border crossing, we have a separate guide to Norwegian Customs: role and requirements.

How excise duty enters into the total import bill

To understand what excise duty costs in practice, you need to understand the order of calculation on import. According to Norwegian Customs, the basis for VAT is calculated as follows:

That means you also pay VAT on the excise duty amount. If you import alcohol, for example, the alcohol duty is added to the calculation basis, and VAT is then calculated on the combined amount. This is a detail many people overlook, and it can make the total cost higher than expected.

The one-off registration tax: excise duty on imported vehicles

If you import a vehicle into Norway, the one-off registration tax is the excise duty that applies. It is payable on first-time registration of the vehicle in Norway, and is calculated on the basis of, among other things:

• CO₂ emissions
• Engine power
• Kerb weight

The Norwegian Tax Administration offers a calculator for working out the duties on importing and registering a vehicle. Because the one-off registration tax can amount to a considerable sum, particularly for cars with high emissions, it is important to calculate it carefully in advance.

Customs credit and excise duties

If your business has been granted customs credit by the Norwegian Tax Administration, you can charge customs duties and excise duties to the customs credit account instead of paying on each individual import. This gives better cash-flow control if you import excisable goods frequently.

Note that VAT is not covered by the customs credit. It is reported separately by you, as a VAT-registered business, in the tax return to the Norwegian Tax Administration. We explain the customs credit scheme in more detail in the guide on customs credit for businesses.

Duty relief and excise duty

A point many people overlook: duty relief exempts you only from the customs duty itself, not from excise duties. If you import goods that are free of customs duty, for example because they are covered by a free trade agreement, excise duty and VAT may still apply. Free trade agreements do not cover excise duties. Read more about what duty relief actually covers in the guide on duty relief and duty-free goods for businesses.

How we help you with excise duties

Keeping track of which excise duties apply to your particular goods, what the rate is and how it affects the total import bill is time-consuming. As a digital customs broker we do it for you:

• We establish whether your goods are subject to excise duty
• We make sure the correct rate and calculation basis are used
• We declare the goods and report the duties correctly

Sources: Skatteetaten: Særavgifter (excise duties), Tolletaten: Importguide (import guide) and Tolletaten: Beregning av tollavgift og andre avgifter (calculation of customs duty and other charges). Rates are set by Stortinget; always check the current rates with the Norwegian Tax Administration.