Progress-linked credit draws trigger VAT invoicing on completion contracts

Contractors that deliver finished buildings to developer companies under complete contracts with a single final invoice must still charge output VAT progressively when they pay their ongoing subcontractor bills with money the developer puts at their disposal.Skatteetaten In binding advance ruling BFU 9/2026, issued 27 April 2026 and published on Skatteetaten's site on 9 October 2026, Skatteetaten holds that drawings on such a developer-funded credit facility count as part-payments matching the progress of the workSkatteetaten, triggering the duty to issue sales documentation with output VAT under bokføringsforskriften § 8-1-2a second paragraphSkatteetaten.

A development site is split among several single-purpose companies (SPVs) that each act as developer for part of the project. A group contractor, entreprenør A, signs back-to-back NS 8407 totalentreprise contracts: with an external subcontractor on ordinary progressive terms, and with the SPVs on adapted complete-contract terms under which, as the applicant described the plan, the building result, ownership and risk would all pass to the SPV only at completion, a single final invoice on the full contract sum would be issued at that point, and the SPV would pay only then. The subcontractor, by contrast, delivers progressively and invoices A progressively with VAT. To fund those invoices, the SPVs would establish a kassakreditt in A's name with a bank, according to the applicant's description: the SPVs would be the debtors, bear interest and establishment costs, pledge their properties as security, and A would draw on the facility during construction to pay the subcontractor.

The applicant argued that because delivery in the private-law sense first occurs at completion, any transfer before that point is a pure advance carrying no VAT, and that deferral to completion is exactly what the legislator intended § 8-1-2a to permit. Skatteetaten rejects the premiseSkatteetaten: "fremdrift" in § 8-1-2a means actual physical progress, not the private-law concept of delivery. The construction sector's special rule deliberately detaches invoicing from the contractually agreed delivery point, and the option to defer invoicing until completion exists only where no part-payments are receivedSkatteetaten.

The credit drawings are such part-payments.Skatteetaten The subcontractor invoices under NS 8407 payment plans tied to progress, and A pays them with funds the SPVs make available, so the SPV–A agreements and the A–subcontractor agreements must be seen togetherSkatteetaten: the agreed use of the facility is "delbetaling som knytter seg til utført arbeid eller materialer som er tilført kontraktsgjenstanden". This follows Skattedirektoratets published BFU of 13 February 2026 on a near-identical setup. A purely financial advance still gives neither the right nor the duty to issue a sales documentSkatteetaten — but an advance counts as a part-payment as soon as its amount covers performed construction workSkatteetaten. Skatteetaten notes it previously assessed the same model in unpublished rulings pointing both ways, on 28 May 2025 and 7 October 2025, and sides with the latter line.

In practice, A must issue sales documentation with output VAT for the amounts drawn to pay the subcontractor's ongoing invoicesSkatteetaten, no later than one month after expiry of the ordinary VAT reporting periodSkatteetaten. Receiving one or more part-payments does not trigger a general duty to invoice all remaining work progressivelySkatteetaten — only the part-payment portionSkatteetaten.

Legal basis: merverdiavgiftsloven § 15-10 third and fifth paragraphs, implemented through bokføringsforskriften § 8-1-2a, as interpreted in Skattedirektoratets prinsipputtalelse of 29 August 2022.