The association and cooperation with the EU under the EEA agreement Norway`s participation in the EU internal market means that Norway enjoys duty-free access for EEA products, with some exceptions; agriculture and fisheries, for example, is not covered by the EEA agreement. As Norway is not part of the EU customs union, Norway does not apply common EU rules and tariffs, but Norway participates in EU customs cooperation through Protocol 10 of the EEA agreement. As a result, the EEA agreement provides for a high level of economic integration, common competition rules, state aid rules and public procurement. The EU has established a customs union that includes a common external tariff for goods entering the EU and free trade within the EU. Norway`s participation in the EU internal market means that Norway enjoys duty-free access to the EEA for all products covered by the EEA agreement. However, since Norway is not part of the EU Customs Union, Norway does not apply common customs rules and EU tariffs on products from third countries. The EEA agreement contains no provision for the harmonization of direct and indirect taxes. Customs legislation in Norway, such as the EU customs code, is largely governed by multilateral agreements. The provisions of the WTO General Agreement on Tariffs and Trade, as well as some UN instruments, provide a framework for the development of customs legislation. The content of EU and Norwegian customs legislation is therefore largely the same. However, this does not apply to tariffs and the level of protection. In these areas, there are considerable differences between Norway and EU policies, partly due to differences in customs and trade policy and, in part, agreements with third countries on tariff reductions and tariff preferences.
All EU Member States are required to have a VAT system. These systems are largely harmonized. However, each Member State retains a certain degree of freedom, particularly with regard to tariffs and decisions on goods and services that should be subject to VAT. A number of directives have been adopted on, for example, excise duties on alcohol, tobacco and mineral oils (energy products). The rules of procedure for VAT and excise duty have also been harmonised. The aim is to ensure the proper functioning of the internal market and to remove tax barriers to cross-border trade between Member States.