The Finance Committee in Norway’s Storting (parliament) has agreed to a temporary reduction in the employer's contribution equivalent to 4 percent in the months of May and June in light of the effects of COVID-19 on Norway’s business sector. The reduction in the employers' contributions will apply in all zones where the contribution is calculated.
The Finance Committee in Norway’s Storting (parliament) has agreed to a temporary reduction in the employers’ contribution equivalent to 4 percent in the months of May and June in light of the effects of COVID-19 on Norway’s business sector. The proposal has now been tabled in the revised government budget.1 (For related coverage, see GMS Flash Alert 2020-140, 1 April 2020.)
These measures, which lighten employers’ contributions burden and defer payment of the contributions, are intended to support employers that have taken a financial "hit" during this pandemic and the relief is expected to be welcome.
As mentioned in the proposal, a reduction in the basis for calculating the employers’ contribution in period 3 will be more significant than a corresponding reduction in period 2,2 as many employers have holiday payments in this period.
The government is also proposing that the due date for payment of the employers’ contribution should be postponed from 15 July to 15 October. Interest would not accrue as a result of the postponement.
It should be noted that employers must report the employers’ contribution as usual in the A-form. This means that the employer determines the basis for the employers’ contribution and reports with the usual rates. The tax authorities will calculate the reduction accordingly in the employers’ contribution.
The reduction in the employers' contributions will apply in all zones where the contribution is calculated – for example, from 14.1 percent to 10.1 percent in the main cities and certain other areas. The reduction will also apply to employers' contributions paid at a reduced rate for employees sent out from the U.S. and Canada to Norway and who have partial exemption from membership in the Norwegian national social security system.
For companies in zone V (the “measure zone”) and in Svalbard, it is proposed to provide compensation corresponding to the benefit that other employers receive through the reduced contributions rate. Employers that do not have to pay employers’ contributions regardless of the zone in which they are located, such as non-profit institutions, will not receive such compensation.
The tax authorities administer this scheme and there is no need to apply. The tax authorities base their calculation on the A-form and determine the size of the contribution. They will also make the payment to the companies in zone V and in Svalbard.
Furthermore, it is also being proposed that no payment will be made if the contribution is less than NOK 1,000.
[NOK 1 = EUR 0.0916 | NOK 1 = USD 0.099 | NOK 1 = GBP 0.082]
1 For the revised 2020 national budget (in Norwegian), see: https://www.regjeringen.no/no/dokument/statsbudsjettet/statsbudsjettet-2020/revidert-nasjonalbudsjett-2020/id2700940/ .
2 Already, the deadline for the second-period payment of employers’ national insurance contributions, which was due on 15 May 2020, has been extended to 17 August 2020.
The information contained in this newsletter was submitted by the KPMG International member firm in Norway.
To subscribe to GMS Flash Alert, fill out the subscription form.
© 2021 KPMG AS and KPMG Law Advokatfirma AS, Norwegian limited liability companies and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.