WANT VAT EXEMPTION FAST-TRACKED

This calculation example is set out in a letter to the Ministry of Finance, in which Pål Haugen, managing director of OmBrukt AS, asks when the promise of a VAT exemption for used goods and repairs will be translated into practical policy.

– Why should the same product be subject to VAT again every time it gets a new lease of life? Haugen asks in the letter.

The calculation example is based on a washing machine costing NOK 8,000. VAT of 25 per cent is added, amounting to NOK 2,000, meaning that the customer pays NOK 10,000 including VAT. If the item is resold second-hand at half price, VAT accounts for NOK 1,000 of the NOK 5,000. On a third sale, at NOK 3,750, the state collects a further NOK 750 in VAT. Through the three sales, a total of NOK 3,750 in VAT is therefore generated for the state.

Used cars exempt

Haugen believes that the current tax system creates an unreasonable difference between private sales and professional reuse.

– A private individual can sell a used washing machine directly to another private individual without VAT being charged on the sale. If the same washing machine is instead taken in by a professional operator, inspected, repaired and prepared so that it can be safely sold to a new consumer, the professional sale is covered by the VAT rules. It is difficult to understand why a product that has already been sold as new and taxed should be subject to ordinary VAT again when it gets a new lease of life through professional reuse, Haugen writes, noting that used cars have been exempt from VAT since 1978.

Feel misled

OmBrukt AS is a subsidiary owned by the Elektronikkbransjen Foundation, and Haugen points out in the letter that the government has set targets for reduced waste, increased reuse and longer product lifespans. At the same time, Haugen refers to the Labour Party’s 2025–2029 programme, which has announced reduced VAT on repairs and the sale of second-hand goods.

– Consumers who want to contribute to a better environment and less waste may, in practice, feel misled. Society encourages us to repair, reuse and extend the lifespan of products, while the tax system can make precisely these choices more expensive, Haugen writes.

Calls for a review

OmBrukt believes that repairs and reuse must be viewed together, and notes in the letter that the government, in its proposed 2027 national budget, will spend NOK 35 million on a pilot scheme to make it more attractive to repair white goods. The company supports the measure, but believes it is a paradox that the state simultaneously maintains standard VAT on repairs.

OmBrukt also refers to the Storting having asked the government to investigate a model for VAT exemption on second-hand goods by 1 November 2027. The company believes that repairs and spare parts should be included in the same work, to ensure that professional, quality-assured reuse does not face a tax disadvantage compared with private second-hand sales.