Accounting for construction – what do the projects require?
Project accounts are required where the tender price or estimated turnover value exceeds 5 times the National Insurance basic amount excluding VAT – with G at NOK 136,549 in 2026 that is NOK 682,745. The old NOK 300,000 threshold is not today's rule. On top come the timesheet requirements even on fixed-price work, HSE cards, generally applicable pay, the duty to check, and the geographical hiring ban.
Project accounts: the threshold is 5 G, not NOK 300,000
The old NOK 300,000 threshold still appears in older material, but it is not today's rule. Section 8-1-3 of the Bookkeeping Regulations requires project accounts for projects where the tender price or estimated turnover value exceeds 5 times the National Insurance basic amount excluding VAT. With G at NOK 136,549 from 1 May 2026 that is NOK 682,745. The specification has to be capable of being produced for each mandatory reporting period, and no less often than every four months. The project accounts have to show the project code, the client's name and address, the nature of the work, the start and end, income, wages, materials, subcontractors and other direct costs. The project code should follow the hours, invoices and materials while the project runs.
Timesheets – even on fixed-price work
Construction is covered by special rules on documenting hours. Hours have to be specified per day and per customer or job. The requirement applies to fixed-price work too. It is a widespread misunderstanding that a fixed price removes it. Without good timesheets the business loses both the documentation and any way of knowing what the project actually costs while it can still be managed.
The financial accounts and tax do not follow the same track
On long-term construction contracts the financial accounts can use the percentage-of-completion method, while small entities have a simplified option to use the completed contract method. The tax rules are different. The specific tax completed-contract treatment applies to fixed-price manufacturing contracts – not to every construction job. Work on a cost basis is normally recognised as the right to payment is earned. The difference between accounting and tax timing is explained in Accruals
Fixed price and direct costs
For an incomplete fixed-price contract the relevant actual direct production costs form part of the tax value of work in progress. Typical direct costs are materials, production wages, the related social costs and direct project management. General administration and several indirect costs are treated differently. Do not use the project's percentage of completion to reduce direct costs that have already been incurred.
Norwegian subcontractor invoices normally carry VAT
This is the most expensive misunderstanding in the industry. Norway does not have a general reverse charge for domestic construction services. A Norwegian VAT-registered subcontractor supplying ordinary taxable work to a Norwegian main contractor normally invoices with 25% VAT. The reverse charge can be relevant on certain purchases of services from abroad, but that is a different rule – see VAT on services to and from abroad
Disputed claims
Where there is a genuine dispute about variations, additions or the final account, a special rule can defer the VAT timing on the disputed part until the claim is settled or paid. Note the limit: only the part actually in dispute is covered. An undisputed part of a final account is timed in the ordinary way.
The NS standards apply because the parties agreed them
NS 8405, 8406, 8407, 8415 and 8417 are widely used, but they apply as contract terms – not as law. Percentages for retention, guarantees and other terms should therefore never be hard-coded into accounting routines without reading the specific contract.
Foreign subcontractors
Using foreign contractors in Norway can trigger reporting to the Register of Assignments and Employment Relationships. Reporting and tax liability are two different questions. For foreign companies, Norwegian domestic law, the relevant tax treaty and a possible permanent establishment all have to be assessed – and a twelve-month limit does not apply universally in every treaty. See A foreign company setting up in Norway
HSE cards, hiring and the geographical ban
Work on construction sites normally requires an HSE card. The name of the contract does not decide whether an arrangement is a contract for services or hired labour. The Working Environment Act gives particular weight to who directs the work and who bears responsibility for the result, and also considers whether the agreement is mainly about labour, whether the need is permanent, and whether the work lies within the client's core activity. As at September 2026 there is still a ban on hiring from staffing agencies for building work on construction sites in Oslo, Akershus, Buskerud, Østfold and Vestfold – see Hiring in labour
Generally applicable pay, the duty to check and joint liability
Construction is one of the industries with generally applicable binding minimum rates. In the contract chain there can also be duties to inform and to check, and joint liability for specified pay claims. Checking subcontractors is therefore an economic risk factor too, not only a health and safety task.
Common mistakes
The old NOK 300,000 threshold is used. Hours lack a project code. Invoicing is confused with the earned project result. Cost-based work is treated as fixed price for tax. A Norwegian subcontractor invoices without VAT because «construction uses reverse charge». Disputed and undisputed parts of a final account are treated alike. Foreign subcontractors are used without the right reporting. And what is called subcontracting is in reality hired labour. Good construction accounting should be able to answer: what have we invoiced, what have we earned, what has the project cost, what remains, and what risk sits in the contracts and the staffing? The accounts have to be built around the project – not reconstructed from the general ledger afterwards. We can build the project structure, the time tracking and the VAT treatment.
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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.
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