The Norwegian Parliament (Stortinget) on 21 March 2020 adopted a package of measures to address employee layoffs and company bankruptcies in response to the coronavirus (COVID-19) pandemic.
The adopted measures are a first response to the economic situation. The government is working on further targeted measures in three phases. In phase one, the government has prioritized immediate action to avoid unnecessary layoffs and bankruptcies in viable companies that face an abrupt reduction in their turnover.
Summary of tax measures
As part of a larger economic package to address the economic effects of COVID-19, Parliament adopted two state-backed loan and guarantee schemes in the total amount of NOK 100 billion (approximately U.S. $10 billion) with a view to securing access to liquidity for Norwegian enterprises. Read about the measures as proposed: TaxNewsFlash
For direct and indirect tax, Parliament adopted measures mainly to deal with immediate liquidity concerns:
The number of days employers are required to pay salaries to workers in case of temporary lay-offs have been reduced from 15 to two days. The intention is that this temporary measure will improve employers' liquidity and help avoid massive lay-offs.
In addition, the excise tax on air passengers has been suspended for the period from 1 January 2020 until 31 October 2020.
Although not a COVID-19 measure, businesses that expects significantly lower profits comparing 2020 to previous years may apply for a reduction of advance payment of tax, possibly to nil.
A proposal to reduce the rate of employers' social security contribution by 4 percentage points for a limited period (two months) may be considered by Parliament in the coming week.
In a second phase, the government is expected to work on further targeted measures towards sectors and businesses affected by the virus outbreak. The government is prepared to respond quickly with new measures.
In the event the pandemic causes a more extensive economic impact, the government would be expected to consider broader measures to sustain economic activity as a third phase of measures.
For more information, contact a KPMG tax professional in Norway:
Per Daniel Nyberg | +47 40 63 92 65 | firstname.lastname@example.org
Thor Leegaard | +47 40 63 91 83 | email@example.com
Read a March 2020 report [PDF 712 KB] prepared by the KPMG member firm in Norway
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