Is VAT required under collaboration agreements?

We are often asked whether Value Added Tax (VAT) is to be added for deliverables between partners in a project. The answer to this depends on the situation and the type of collaboration.

Procurement of services

R&D services procured by the Project Owner from another institution are defined as VAT-liable turnover.

Financial contributions from partners

The question of VAT on financial contributions from project partners has not been fully clarified. In a statement to the Research Council, the Norwegian Tax Administration has concluded that the Project Owner is responsible for ensuring that VAT is added to financial contributions from partners.

The Research Council has asked the Ministry of Finance to review this issue once again. Our argument is that a contribution from a company partner cannot be directly measured vis-à-vis a delivery of goods and services for payment, and as such lacks the key element of the definition of “turnover” given in Chapter 1 Section 3, paragraph 1 litra a of the Act relating to Value Added Tax.

Further distribution of the grant award from the Research Council

According to a statement by the Ministry of Finance, Research Council grants awarded to Project Owners are not defined as VAT-liable turnover.

The Ministry of Finance also finds that in projects involving partners, the portion of the grant distributed to the partners is not liable to VAT provided that the Project Owner “does not have the sole responsibility for project content, achieved project results, etc., in the project, but that this responsibility is shared among all of the project partners.”