Under the 2001 VAT reform, Norwegian non-profit organizations experienced an increasing burden in the form of higher irrecoverable input tax. The author describes how non-profit organizations were initially compensated for the additional tax burden and how the refund arrangements were diverted from their initial purpose and evolved into a mechanism driven by political motives. If the Norwegian refund mechanism turns out to be endurable, it will draw the attention of the international community interested in the vital question of how the VAT system could be adapted to suit the non-profit organization sector.