The VAT rule can be challenged on the grounds that Paypal are already selling electronic money in Norway and not charging VAT.
If you read Paypals Legal Agreements you will see that a Paypal balance is not a Euro or a Krona. It is an electronic money issued by Paypal
Funding an account
To fund an account, a User must either:
Purchase electronic money from us via their funding source(s). In practice, this means that each time a User requests PayPal to send money, PayPal simultaneously debits the chosen amount from the Users default funding source (PayPal balance, bank account, debit card or credit card). PayPal then sends this online payment to the intended recipient; or
Accept an online payment that has been issued by us and sent from another PayPal User
A Users account balance represents the amount of electronic money issued by us (whether it is sent to the User by a third party or purchased directly from us)
Withdrawing funds (redeeming electronic money)
A User with an account that has a credit balance may instruct us at any time to withdraw funds from their account. By doing so, a User can redeem all or part of the electronic money represented by that balance to their registered bank account or if applicable, credit card.
https://cms.paypal.com/ie/cgi-bin/?cmd=_render-content&content_ID=ua/ServiceDescription_full&locale.x=en_USThis text can be found if you click on Legal Agreements, Key Payment and Service Information.