2026 Budget: EV Subsidy Phase-Out and Cross-Border Service Tax Tightening

Norway’s 2026 budget proposes two major VAT-related changes: a phased reduction of electric vehicle benefits and tighter rules for cross-border services.

Here are the key VAT measures outlined in Prop. 1 LS (2025–2026) from the Norwegian Ministry of Finance:

⚡ 1. Reduced VAT Threshold for Electric Vehicles

• The VAT exemption for electric vehicles will be limited to vehicles priced under NOK 300,000 starting in 2026.
• This marks the beginning of a phase-out of VAT benefits, with full removal planned for 2027.
• The government argues that subsidizing car purchases through VAT is no longer justified, as 95% of new cars sold are already electric.

2. Closing VAT Loopholes in Cross-Border Services

• From 1 July 2026, Norway will tighten VAT rules on international trade in services.
• The goal is to prevent foreign companies from receiving more favorable VAT treatment than domestic firms.
• This measure is expected to generate NOK 400 million in additional revenue in 2026

Source regjeringen.no

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