Clubs and associations – when do accounting, tax and VAT obligations arise?
Four sets of rules meet here, with four different thresholds that have to be assessed separately. Accounting obligations for ordinary associations start at assets over NOK 20 million or more than 20 full-time equivalents. Tax liability for economic activity starts at NOK 70,000, or NOK 140,000 for charitable and non-profit bodies. VAT registration at NOK 50,000, or NOK 140,000 for the same organisations. And employer's contributions have their own exemption.
Does every club and association have to prepare annual accounts?
No. For ordinary associations the Accounting Act applies once the association has assets worth over NOK 20 million or on average more than 20 full-time equivalents. For co-operatives and economic associations a different threshold applies: sales revenue over NOK 2 million. Where the obligation depends on the size thresholds, the threshold must as a general rule have been exceeded two years running. Foundations are different: they are subject to the Accounting Act whatever their size. An organisation without that obligation can still need proper accounts. Banks, funders, members and public schemes often require documentation of how the money has been used.
Bookkeeping obligations are not the same as accounting obligations
Accounting obligations mean the organisation has to prepare formal annual accounts under the Accounting Act. Bookkeeping obligations cover the continuing recording and documentation of transactions. Everyone subject to the Accounting Act is subject to bookkeeping obligations. An association can also become subject to bookkeeping obligations because it carries on activity requiring a tax return, or because it has to file a VAT return. Being registered in the Register of Non-Profit Organisations does not on its own create bookkeeping obligations.
When is an association tax-exempt?
Section 2-32 of the Taxation Act exempts organisations that do not have profit as their purpose. It is not enough that the articles say the organisation is non-profit. Skatteetaten assesses the purpose, the organisation and the actual activity together. Typical tax-free income is membership fees, public grants, pure gifts, training fees and income from one-off events naturally connected to the purpose.
A tax-exempt association can have taxable activity
It becomes more complicated where the organisation carries on economic activity outside its non-profit purpose – a permanent commercial café, regular paid services for outside customers, commercial letting of property. That activity is then assessed separately, and two thresholds apply: NOK 70,000 of gross turnover for tax-exempt organisations that are not charitable or non-profit – trade unions, employers' organisations, industry bodies and political organisations, for instance. NOK 140,000 for charitable and non-profit organisations – hobby associations, crafts associations, cultural, humanitarian and social organisations, sports organisations. Once the threshold is passed, the net income from the economic activity is taxable. That does not mean membership fees, gifts and other non-profit income suddenly become taxable.
The purpose of the activity can decide it
The threshold is not the whole assessment. An economic activity can still be tax-free where the activity itself realises the organisation's non-profit purpose. The Supreme Court illustrated this in the Bodø/Glimt judgment, Rt. 1997 p. 1602. The football club had sold supporter merchandise in connection with the cup final, and the court held that the activity was so closely connected to the club's non-profit purpose that the income was not taxable economic activity. There is therefore a difference between activity that realises the purpose, and commercial activity that merely raises money for it.
Voluntary work and kiosks – where is the line?
One-off jumble sales, bazaars and similar are normally not treated as permanent commercial activity. Skatteetaten uses a kiosk as a practical example: one open only during training sessions or events, selling to participants and spectators and run by unpaid staff, can be part of the tax-free activity. Where the kiosk has fixed, regular opening hours and is run as an ordinary shop or café, that points clearly towards taxable economic activity. Sponsorship income has to be separated the same way: where a business gives money with no counter-performance, that can be a gift. Where the sponsor gets advertising space, profiling or other services, there is a supply – and both the tax and the VAT rules have to be considered.
When does an association have to register for VAT?
For charitable and non-profit organisations the registration threshold is NOK 140,000 of VAT-liable turnover over twelve months. For most others it is NOK 50,000. Only turnover actually covered by the VAT rules counts. Membership fees to non-profit organisations are normally out of scope where the fee covers activities forming part of the non-profit work. Where the fee in reality covers ordinary VAT-liable services, the answer can differ – see VAT registration
Voluntary organisations have their own VAT exceptions
Charitable and non-profit organisations have several special rules. Certain sales at short events, second-hand shops with donated goods and voluntary labour, and certain low-value goods can fall within their own exceptions. From 1 January 2025 «trivial value» in the VAT Regulations is NOK 200 or less, up from NOK 100. Note that the NOK 100 threshold still applies to gifts and promotional items under the general deduction rule – two different thresholds in the same regulation. Voluntary organisations can also apply for VAT compensation through a separate state scheme. That is not the same as an ordinary right to deduct input VAT.
Tax-free pay and the exemption from employer's contributions
A tax-exempt organisation can pay a limited amount per person per year without the recipient being taxed on it, and such payments normally do not have to be reported in the a-melding either. Once the threshold is exceeded, the whole payment from the organisation becomes taxable. Check the current amount with Skatteetaten – it is adjusted. Where the person does the work as part of their own business, the pay exemption does not apply. Charitable and non-profit organisations also have a specific exemption from employer's national insurance contributions where the pay relates to the non-profit activity. The exemption applies where the organisation's total salary costs do not exceed NOK 800,000, and no individual employee receives more than NOK 80,000 during the year. Where one employee receives more than NOK 80,000, contributions have to be calculated on the whole payment to that person – while the exemption can survive for the others. Where the organisation passes NOK 800,000 in total, every payment becomes liable. See Employer's national insurance contributions and A monthly checklist for the payroll run
Can the donor get tax relief?
Yes, but not for gifts to any association. The organisation has to be approved by Skatteetaten as a recipient and report the gift electronically. There is also a lower threshold per organisation and a total maximum deduction per donor – check the current amounts for the income year with Skatteetaten. This is the donor's tax relief and must not be confused with whether the gift is taxable income for the organisation. The two are not connected.
When is an auditor required?
Not every association subject to the Accounting Act needs an auditor. For entities other than those always subject to audit, the obligation arises once at least one threshold is reached: operating income of at least NOK 7 million, a balance sheet total of at least NOK 27 million, or on average at least 10 full-time equivalents. Foundations are subject to audit whatever their size. The articles, funding arrangements or other agreements can also require an audit even where the Auditors Act does not – see Statutory audit
Non-profit organisations can use activity-based accounts
For non-profit organisations subject to the Accounting Act there is a separate Norwegian standard, NRS(F) good accounting practice for non-profit organisations. The standard allows activity-based accounts, where the accounts show how funds from membership income, gifts, grants and other sources were obtained, and how they were used on the organisation's purpose. For small organisations subject to the Accounting Act, a directors' report is no longer a general statutory requirement, although the articles, the annual meeting or funders can require an equivalent account.
Several sets of rules can apply at once
A small sports club can be tax-exempt and still have to file the a-melding. A larger non-profit organisation can be subject to the Accounting Act, but only part of its activity taxable. And an association can be tax-exempt under the Taxation Act while certain sales are VAT-liable. So accounting obligations, tax, VAT and employer responsibilities should be assessed separately – they have four different thresholds and four different answers. Greenleaf helps clubs, associations and non-profit organisations with the accounts, payroll, VAT, the year-end close and reporting.
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This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.
More on housing companies and voluntary organisations
- Accounting and management for housing co-operatives and jointly owned property – what applies?
- Annual accounts for a housing co-operative – which requirements and deadlines apply?
- The board's financial responsibility in a housing company – how far does it reach?
- Budgets and shared costs – how are they set correctly?
- VAT for housing companies – when does it become relevant?
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