Norway: Tax developments in response to COVID-19

This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).

The content will be updated regularly. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.

Direct tax measures

• Tax relief for companies that carry back losses for that year against the two previous years’ taxable profits. The tax value (22%)of the allowed carry back will be automatically paid out as part of the ordinary tax statement in 2021.
• Postponement of the second instalment of advance tax payment for companies until September 1st (originally due 15 April).
• The low VAT rate is reduced from 12% to 6% from 1 April 2020 to 31 October 2020. 
• Sales subject to the low VAT rate of 6% include passenger transport, overnight lodging, public broadcasting, access to cinema, museums, amusement parks and major sporting events. 
• The VAT return for the first VAT period (January and February 2020) was due on 10 April 2020 (actually due on 14 April 2020, which is the first business day after the deadline for delivery of the VAT return). The deadline for paying VAT for the first ordinary VAT period in 2020 was 10 June 2020.
• Self-employed persons and businesses, companies and private individuals who are facing cash-flow issues as a result of the coronavirus situation may apply for deferred payment of most tax and duty claims, as well as the claims handled by the Norwegian National Collection Agency. Applications for deferred payment may be submitted from 10 June. 
• Extension of time for traders and certain other business owners to make the first instalment of advance payment of tax for 2020 were provided to 1 May 2020 (from 15 March 2020).
• Owners of loss-making companies in 2020 could postpone payments of net wealth tax in respect of the value of the companies. This measure is intended to reduce the need for, among others, family-owned businesses to distribute dividends to owners to cover the wealth tax. 
• The number of days employers are obliged to pay salaries to workers in case of temporary lay-offs would be reduced from 15 to two days. The intention is for this temporary measure to improve employers' liquidity and help avoid massive lay-offs.
• The air passenger tax is temporarily suspended from 1 January 2020 until 31 October 2020.
• The proposal would allow the deduction of losses incurred in 2020 by filing an amended corporate income tax return, and a tax loss incurred in a given year would be deductible from income earned in five consecutive years.
• Limited liability companies can apply up to NOK 30 million of corporate losses in 2020 against taxed profits the previous two years. In addition, the Norwegian Ministry of Finance announced a three-month extension of the deadline for filing corporate income tax returns for the fiscal year 2019, as a relief measure in response to the coronavirus (COVID-19) pandemic. The deadline for filing corporate income tax returns for 2019 has been extended to 31 August 2020 (from 31 May 2020). According to the Ministry of Finance, there will be no further extensions.

CIT – Reduction of advance tax payments by way of ordinary means (not a Covid-19 measure)

• Businesses that expect significantly lower profits in 2020 compared to previous years may apply for reducing the amount of advance payment of tax possibly to nil. Application must be submitted well in advance of the due date for the final instalment, i.e. well in advance of 15 April 2020.
• The Tax Authorities will not impose enforcement fines for late submission of tax return for FY2019 (due 31 August 2020).

Employer social security contribution–rate reduction

• To reduce costs and improve cash flow immediately, social security contribution rate will be reduced with 4 percent of the total contribution rate of 14.1% assumable for the salary payments in May and June. 
• Some areas in Norway pay 0%. These areas will receive a subsidy equal to 4 % of the employer social security contribution base. 

Employer social security contribution–postponement of payment

• Payment of employer social security contribution for March and April is postponed until 15 August 2020.
• Payment of employer social security contribution for May and June is postponed until 15 October 2020.

Additional information regarding employment-related measures, economic stimulus measures and other measures.