The Norwegian Government has implemented several measures to help our businesses through this corona-period and to prevent businesses having to file for bankruptcy.
The measures taken by the government during the last weeks was by prime minister Erna Solberg said to be “the most far-reaching measures Norway’s population has ever experienced in peacetime.” It was decided to close kindergartens, schools, universities and everybody who has the possibility to work from home was asked to do so, in addition, the borders are also closed for travelers. All events, sports arrangements, organized sports and culture events are cancelled, and all swimming pools, cinemas, gyms, hairdressers, beauty salons and several shops are closed. In addition to those being closed by order many restaurants and shops have decided to close due to lack of customers and guests.
Tax measures and financial aid
The government has unveiled three financial packages to help keep businesses afloat through the coronavirus pandemic. The packages include reduction of employer’s social security contribution and VAT rates, duties, reduction of penalties for late filings and extension of deadlines, along with reduced sanctions (enforcement fines) and moderation of applicable bookkeeping regulations.
The financial packages include, among several other measures:
- Cash payments to business who have suffered a significant drop in their turnover due to the corona outbreak and measures taken to reduce the spread of the virus to cover a portion of their costs related to rent, insurance etc.
- The government will also, on certain conditions provide a loan guarantee for loans offered by banks to affected businesses covering 90% of the borrowed amounts.
- Suspending fees and taxes for the airline industry
- The Government will take most of the bill for the salaries of employees temporarily laid off/furloughed due to lack of work in a bid to improve companies' liquidity.
- Implementing a change in corporate tax regulations so that companies that are loss-making can re-allocate their losses towards the previous years’ taxed surplus. It will also change the tax regulations so that owners of loss-making companies can postpone payments of net wealth tax.
- Postponement of VAT payments due April 14th, 2020
- Reduction of the low rate VAT from 12 % to 6 %, effectuated from April 1st, 2020.
- Postponement of the payment of payroll taxes/employee taxes and advance tax for the second term, due April 15th, 2020.
In addition to the packages we have also seen two significant cuts in the interest rate from the Central Bank, Norges Bank. The interest rate is now at a record low 0.25% down from 1.5%.
The Norwegian Government and The Norwegian Tax Administration have launched the following sites in English, to keep you updated on the situation and the measures in force:
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