Norway VAT: Data Center Services Not a Single Supply

The Norwegian Tax Appeals Board issued a decision in an appeal case connected to the binding preliminary ruling from June 2020. At the center of the dispute is the question of whether a company’s planned provision of data center services to foreign customers who own the servers should be treated as a single, unified supply for VAT purposes or as multiple separate supplies.

Facts of the Case and the Board's Decision

In 2020, a company that provides data storage services, specifically to ensure continuous “uptime” for customers’ servers and software, 24 hours a day, 365 days a year, so customers can reliably manage their data, required a binding advance ruling from the Tax Office. To provide these services, the company must not only have physical space but also a fully operational environment. 

This includes secure premises, temperature control, cooling systems, stable and redundant power supply, fire protection, and an IT infrastructure that enables data to flow in and out of the center without interruption or security breaches. Energy is the most critical element of the service, and consumption varies significantly depending on each customer’s needs. Thus, electricity is billed separately based on actual consumption.

Notably, the customers, primarily foreign businesses, own the servers and related equipment. The company, on the other hand, is responsible for safeguarding the equipment while it is under its control. These services can be delivered in two main ways: either by placing customers’ servers in shared spaces, or co-location, or in dedicated rooms, referred to as “white space”, for clients with special requirements. Regardless, the nature of the service remains essentially the same.

In the request, the company requested confirmation that all these elements, taken together, should be treated as a single, combined supply of data center operation services, and that this supply should be exempt from VAT. However, the Tax Office rejected the company’s position. This decision was also confirmed in the Tax Office's assessment of the complaint. As a result, the company appealed before the Tax Appeals Board, which, on March 12, 2026, announced that the complaint was not accepted.

Conclusion

Following the reasoning and decision of both the Tax Office and the Tax Appeals Board, activities involved in operating data center services should not be treated as a single supply. Instead, these services consist of several distinct goods and services. Consequently, taxable persons engaged in these types of activities and services must assess each component individually for VAT purposes, rather than applying a single VAT treatment to the entire package.

Source: Norwegian Tax Administration