Summary - COVID-19 financial measures - updated July 1, 2020

In this blog post you will find a summary of the most important financial measures introduced or proposed to mitigate the economic consequences of the outbreak of the coronavirus (COVID-19) in Norway. Please note that new measures are implemented frequently, and new updates may therefore be announced after the publishing of this article. 

This article was updated as of July 1, 2020.

Contents

1. Overview of deferred deadlines for payment of direct and indirect taxes
2. Compensation for businesses (the cash benefit scheme)
3. The Coronavirus and dividends, including reversal of dividends
4. Corporate tax
5. Payroll tax
6. Value added tax
7. Air Taxes
8. Excise duties
9. Delivery of food, etc. - use of the cash register to register sales
10. Sick pay
11. Care benefit
12. Management of laid-off employees with private pension schemes
13. Suspension of the provisions regarding reduction and cancellation of pensions
14. Temporary lay-offs
15. Right to unemployment benefits during the Easter and Christmas holidays
16. Self-employed persons and freelancers
17. Creation of a government loan guarantee and reintroduction of the Government bond fund
18. Board meetings and shareholders’ meetings
19. Temporary Reconstruction Act
20. Changes in mortgage regulations

1. Overview of deferred deadlines for payment of direct and indirect taxes

The tax authorities will revert with updated information on the practical implementation of the extended deadlines. We will update our readers when updates are available. Interest will not accrue as a result of the deferrals, cf. Prop. 67 S (Changes in the state budget 2020).

In addition, it should be noted that the Tax Administration is pausing the use of compulsory fines in the event of delayed delivery of the:

• A-melding (monthly report from the employer)  
• VAT-returns
• Corporate income tax return

This applies to the submission of notices due between March and June 10. However, PwC advises to comply with the filing deadlines as far as possible.

The Ministry of Finance proposes that self-employed individuals and other personal taxpayers who pay advance tax should be able to pay the second and fourth installment one month later than today. It is consequently proposed to pay the advance tax on these dates: 

• First term: 15 March 
• Second term: 15 June
• Third term: 15 September 
• Fourth term: 15 December 

The deadline for comments regarding the proposal is August 10, 2020.

2. Compensation for businesses (the cash benefit scheme)

On March 27, the government made a proposal to establish a cash support scheme for vulnerable companies. Businesses can now apply for compensation for decline in turnover due to the corona crisis. The compensation is determined on the basis of the fixed costs of a legal entity. The scheme is valid for March, April and May 2020.

The compensation scheme is intended to apply to taxable companies in Norway that have experienced a decline in sales as a result of the corona pandemic. The starting point for the right to compensation is that the company has experienced a sales decline of more than 30% (20% for March) compared with the same month last year. If the company did not operate in March 2019, or for other reasons had unnatural low turnover at this time last year, the average turnover for January and February 2020 can be used to calculate the turnover failure.

The scheme is not intended to apply to e.g. finance industry, oil and gas extraction, private kindergartens or airlines that are under their own support scheme, to name a few. The compensation scheme applies to so-called inevitable fixed costs. These are costs that arise although the business experiences a sales failure, e.g. rental costs.

The calculation of the compensation for companies that are not required by the authorities to shut down is done as follows: Reduction in turnover x (inevitable fixed costs - deductible of NOK 10,000) x adjustment factor of 80 per cent. 

Special rules have been provided for businesses that are required by the authorities to close as a result of the Coronavirus outbreak.

Applications for compensation must be submitted digitally via Altinn. 

The tax authorities will carry out inspections on the applications for compensation. Ongoing automatic inspections will also be carried out when the applications are submitted.

Since it has been emphasized by the authorities that incorrect applications will have consequences, it is crucial that the board records that the documentation has been reviewed and followed up correctly.

Regulation on the temporary compensation scheme

On April 17, regulations were passed for a temporary grant scheme for companies with a large decrease in turnover. The regulations provided several clarifications. 

The regulations introduced stringent requirements for applicants. For example, applicants must provide information about ownership, and companies that had financial challenges before the corona crisis are disqualified from applying for a compensation. These rules have been introduced to ensure that the support is granted to companies that were viable before the corona crisis and to prevent abuse of the scheme.

Clarifications in the regulation

Detailed rules have been provided on which costs make up the basis for compensation. It is required by the individual applicant to assess whether the costs they are experiencing are covered. Further, it is clarified that the decrease in turnover must be adjusted in relation to the change in turnover from January-February 2019 to January-February 2020. The adjustment must be made in relation to both increase and decrease in turnover from 2019 to 2020. 

The rules should treat businesses equally, regardless of how they are organised. 

Compensation of up to NOK 30 million will be paid in full. Compensation beyond 30 million will be reduced by 50%. Maximum grant per month is 80 million for an enterprise. Special rules have been introduced for groups. The application process is more comprehensive for groups than for ordinary enterprises. 

Rental income from real estate is also now confirmed covered, meaning that companies that experience a decrease in turnover from loss of rental income from real estate are included in the scheme. 

If the company has suffered a loss in 2020, and in January / February 2019, the grant may be reduced in accordance with the other provisions.

Responsibility and documentation

It is emphasized by the government and the tax authorities that it is important that applicants become familiar with the scheme. Applicants must declare  several strict statements when applying. 

The applicant requesting for compensation must prepare a statement documenting the amounts and calculations that formed the basis for their application. 

The applicant shall nevertheless submit such confirmation from the auditor or authorised accountant when filing the annual accounts for 2020, at the latest.

The deadline for applicants to submit a confirmation from their auditor or authorized accountant has been deferred until June 1, 2020.

Information on which companies have been granted compensation will be publicly available information.

Changes in the scheme 

From May 16 it became possible to apply for support under the compensation scheme for the month of April.

Furthermore, some adjustments have been made to the scheme. Of the changes adopted on May 15, it can be mentioned that the individual share has been halved, so that the individual share as of April is 5000. Furthermore, companies can now receive gifts from private individuals up to NOK 3000 per month, without this being considered as turnover. For service activities where live animals are part of the service (e.g. dog sledding and riding schools), animal food, veterinary costs and unavoidable wages will be considered inevitable fixed costs. The aquaculture industry is not included. 

For seasonal businesses, the calculation model will change as of May (subject to ESA approval). 

Seasonal businesses are companies that offer services that involve activities or experiences that are mainly outdoors and are, by their nature, seasonal. This applies to, among others, resorts and amusement parks.

In a normal year, the enterprise must achieve 80% of its turnover during six consecutive months defined as peak season. In order to receive compensation according to the seasonal model, the peak season must include March, April or May 2019. If the enterprise does not meet these requirements, it must apply for compensation according to the regular rules.

Furthermore, it is also a condition for using the seasonal model that more than 50% of the enterprise’s turnover comes from seasonal or directly related activities.

Fixed inevitable costs for seasonal businesses will be scaled by a seasonal factor. The seasonal factor is calculated as turnover in the same month in 2019 as the grant month, multiplied by 12, divided by turnover in the previous season. The change will take effect from March. If a company has already been compensated for March and April, the application will be recalculated and any adjustments repaid. If an enterprise wishes to apply through the seasonal model, it must submit a new application for March and April with a new calculation.

A website has been created to guide companies on the calculation of compensation for seasonal activities:

https://kompensasjonsordning.no/sesong

A website has also been set up to provide clarifications and specifications regarding the provisions of the cash benefit scheme from the legal department of the Tax Administration:

https://kompensasjonsordning.no/en/clarifications

Another website has been set up to provide guidance regarding the auditor's and authorized accountant's confirmation of content in the application for compensation:

https://kompensasjonsordning.no/bekreftelse

From July 17, it will be possible to apply for compensation for the month of May. The deductible is removed, so no deduction will be claimed for May. 

The deadline to apply for compensation for the months of March, April and May is July 31. For the months of June, July and August, the deadline is September 30.

Furthermore, it can be pointed out that the government is considering an extension of the cash benefit  scheme, possibly a new scheme to replace it with.

3. The Coronavirus and dividends, including reversal of dividends

In light of the corona crisis, there are now clear political expectations for a more moderate dividend policy. There is great uncertainty regarding both the times ahead and the world economy, and the short-term consequences of this extraordinary situation are for many Norwegian companies e.g. weakened liquidity. When introducing the economic rescue package (government loan guarantees), it was also proposed to the Parliament that the scheme should not apply to companies that pay dividends in 2020. The proposal was voted down, but shows that there is political pressure in this direction.

Reversing dividend decisions

The tax authorities have recently received several inquiries regarding the possibilities for a company to reverse a dividend decision with the effect that taxation is not triggered. The reason for the inquiries are that companies that have already decided on dividends do not want to distribute the dividend due to the current financial situation.

According to the Norwegian Tax Act, dividends are taxable when the decision of the dividend is made by the General Meeting. Thus, even though no dividend has yet been paid, the decision will trigger dividend tax in the hands of the shareholders. This also applies if the reason for the company not wanting to pay dividends is due to liquidity problems. In practice, however, exceptions have been made for companies that have liquidity problems, as long as the company reverses the dividend payment decision before the payment has been made, and at the latest by the end of the year the dividend was adopted.

The tax authorities have now opened for the possibility that taxation of dividends in 2020 can be omitted if a decision to distribute dividends is reversed. On the tax authorities' website, the following is reported about when such a reversal can be carried out without any tax effects (i.e. office translation):

“The reversal must take place before the payment is made and at the latest by the end of this  year. Further, the reversal must be caused by measures taken by the company to secure sound equity and liquidity dealing with the corona pandemic. Furthermore, it is a condition that a decision to reverse the dividend decision is made by a competent body, and that the reversal decision is valid under Norwegian company law.”

4. Corporate Tax

Action

• The deadline for submitting the tax return for corporate income tax is deferred from May 31 to August 31. No postponement will be given beyond this date.
• The payment of advance tax for companies for the second term was initially due April 15, but the deadline is now extended to September 1, 2020. The deferral does not apply to companies that are subject to the hydropower and petroleum tax regime. 
• The deadline for payment of advance tax (for the first term) for self-employed persons, and other personal taxpayers who pay advance tax, was originally March 15, 2020. The deadline is now postponed to May 4, 2020. The advance tax for 2020 will be due for payment in four installments on May 4, July 15, September 15, and November 15, 2020.
• A personal owner of a business that incurs a negative annual result in the annual accounts for 2020 may claim to defer the payment of the wealth tax on capital stock.
• The valuation discount for the wealth tax is increased for shares, fixed assets, etc. (including commercial property) from 25% to 35% with effect from the 2020 financial year.
• It is possible to re-allocate a deficit in 2020 against taxed profits the previous two years. A limit of NOK 30 million has been set for the reallocation of the deficit for 2020. 
• A sole proprietorship, a company with full liability, a co-operative or Norwegian-registered foreign enterprise, which conducts activities within the meaning of the Tax Act, can according to further rules be converted tax-free to private limited companies. Companies wishing to carry out a tax-free transformation with effect from January 1, 2020 must normally have founded the company and sent a notification to the Register of Businesses by July 1, 2020. This deadline is now postponed to September 1 2020. Furthermore, the company must have implemented tax deductions and calculated its employers’ national insurance contributions no later than September 1, 2020. The same applies to the transformation of a Norwegian-registered foreign enterprise, (the founding of the company and notifications of this must be sent to the Register of Business Enterprises by September 1, 2020).
• The Norwegian Parliament has proposed a temporary scheme entailing an increase of the initial depreciation for balance group D (e.g. industry) from 20% to 30%, and the establishment of a temporary tax balance group for ships (not included in the tonnage tax scheme) in short sea shipping. The depreciation rate for this group is proposed to be 20%.
• The government wants to contribute to increased investments in start-up companies, and has therefore increased the limit for deductible amounts under the tax incentive scheme in section 6-53 in the Norwegian Tax Act. The limit for personal investors has been increased to NOK 1 million, while the limit for share deposits in enterprises has been increased to NOK 5 million. Employees can make use of the scheme. The changes in the amount limits applies for the income year 2020. 
• The tax-free benefits an employee can receive when buying shares, etc. from the employer company has been increased from NOK 3,000 to 5,000.

Practical approach 

Companies are awaiting the payment of the tax deduction for the second term. The measure will have an immediate effect on liquidity as a result of the deferred payment of advance tax. 

Companies that made a profit in 2018 and or 2019, will in the tax return for 2020 be able to re-allocate company losses against previous years' profits. Therefore, the liquidity effect will not arise until 2021. 

There are currently no measures regarding deferred wealth tax for the 2019 income year, which is due for payment in 2020. The owners must therefore pay wealth tax for the 2019 income year.

Measures from the Research Council on SkatteFUNN (R&D incentive scheme) and other research initiatives

• Companies may, under specific conditions, claim a tax deduction on 20% of the costs associated with a granted SkatteFUNN (R&D) project.   
• R&D projects that are delayed due to the spread of the coronavirus can request a one-year extension via a new SkatteFUNN application in 2021.
• Applications will be processed within three weeks until the summer.
• The Research Council is investing NOK 1.2 billion in new innovation projects and will therefore issue grants for new projects three or four times during 2020.
• There will be an ongoing processing of applications received by the Research Council for Innovation Projects (IPN) through 2020.
• Grants for new companies are strengthened by NOK 2.5 billion through the innovation grants- and establishment grants schemes.
• Increment in the loan limit from NOK 1.6 billion to NOK 3 billion for innovation loans that can be used for part financing of specific investment projects. 
• The maximum loan amount for start-up loans from Innovation Norway is increased from NOK 1.5 to 2.4 million. The requirements for equity and bail are lowered while it is possible to obtain an extra six months interest exemption on existing and new start-up loans.
• Innovasjon Norge can now also grant 75% of the total cost of a project.
• Start-up companies can receive both market clarification grants, grants for commercialisation (phase 1), grants for commercialisation (phase 2) and start-up loans.
• An interest support fund of NOK 300 million which will contribute to payment relief through installment deferral and deferral of interest payments for existing or new innovation loans and district-directed risk loans. 
• Innovasjon Norge increases the maximum loan for innovation loans per customer from NOK 25 million to NOK 50 million, and offers interest-free exemption for one year and deduction for two years.
• It has been proposed to provide a grant of 50 mNOK to private innovation environments. The scheme will hopefully contribute to the private innovation environment upholding its offers to start-ups and companies in growth.

The Research Council of Norway will receive additional grants to keep R&D activity going. The grant is increased by NOK 250 million.

Furthermore, it has been proposed to increase the allocation to the innovation grant scheme by NOK 100 million and the allocation to industry clusters by NOK 50 million.

In a request, the Norwegian Parliament also asked the government to propose more grants related to research and development, as well as initiatives that could support the green shift/environmentally beneficial policies.

Investinor

The Government has previously proposed increasing the capital of Investinor by NOK 1 billion. The measure will make it easier for companies to raise start-up capital. There is now a new proposal which suggests that it should be considered whether Investinor's framework should be increased further (given that Investinor has the opportunity to use the funds quickly and accurately).

Socially beneficial acquisitions and restructuring

Furthermore, it is proposed to adopt a new legal framework that will help to facilitate socially beneficial acquisitions and restructuring in listed companies. The amendment opens the way for a regulation that allows listed companies to raise capital without the offer price for mandatory offers being based on prices that do not reflect the current situation.

Interest deduction limitation rule

Due to the situation that has arisen as a result of the corona pandemic, the tax authorities have eased up on the  reporting obligations  in regard to the interest deduction limitation rules for the income year 2019. 

All companies, etc. in a group are initially obliged to submit the form RF-1315 on the limitation of interest deductions. Companies, etc. that are part of the Norwegian part of the group, where the total net interest costs do not exceed the threshold amount of mNOK 25, can however, subject to a few conditions, now omit to deliver RF-1315.

The tax authorities state that the following conditions must be met in order to omit filing RF-1315:

• The top company in the Norwegian part of the group (if there are several "branches" into Norway, one of the top companies) has filed RF-1315 and completed part A of RF-1315 including the list in item 24 of which entities  that are included in Norwegian part of the group. In this overview, the total net interest expenses for the Norwegian part of the group will be shown, and the net interest costs are specified for each of the companies in the Norwegian part of the group.
• The company's net interest expenses included in the table in item 24 are mNOK 5  or lower. (The company's net interest expense in item 24 is the same as would have been entered in item 140 if the company had provided its own form).
• The company discloses in the attachment to the tax return the name and organisation number of the company that has supplied RF-1315 with the above information on behalf of the other Norwegian companies in the group, and confirms that this information is correct and complete.
• The company has not carried forward interest from previous years, cf. Part VII of the form.

If the total net interest expense in the Norwegian part of the Group exceeds the threshold amount of mNOK 25, all Norwegian entities in the Group must file the RF-1315. If the exception rule in the Norwegian Tax Act § 6-41 (8) letter b number 2 is used at national level,  RF-1509 must also be provided.

The tax obligation for filing RF-1509 for FY2019, has, as stated by the tax authorities, been simplified in the following matter:

• The top company in the Norwegian part of the group (if there are several "branches" into Norway, one of the top companies) must file a  completed RF-1509 (i.e. information on entities included in the Norwegian part of the group in item 160, as well as the other the entries in the form filled in at the national level). This form must be signed by the company and the responsible auditor.
• The other companies that apply the exemption rule at national level must also file  RF-1509, but need only provide the following information in the form:
• Name and Business Register Number
• Information in the text box in item 295 (irrespective of the instructions in the form) that the company applies the exception rule at national level, the name and organisation number of the company that has completed the full RF-1509, and that a copy of the completed form is attached to the tax return.
• The company and its auditor must sign RF-1509, and as such approve the contents of the enclosed copy of the form.

• In addition, a copy of the completed RF-1509 must be attached (cf. first bullet point) 

The tax authorities state that if the exception rule is applied at company level, the entire RF-1509 must be completed and signed by the company and the auditor.

5. Payroll Tax

Action

The Standing Committee of Finance and Economic Affairs asks the government to submit a proposal to reduce the employer's contribution by 4 percentage points from 14.1% to 10.1% for the third term.  The payment of the employer's contribution for the second term is postponed from May 15 until August 17. Further, the payment for the third term (May and June) is postponed from July 15 to  October 15, 2020.

Practical approach 

The measures will have an immediate liquidity effect as a result of the reduction and deferred payment. 

The companies continue to submit the A-meldingen (payroll reporting) each term in accordance with the specified deadlines. This also applies to the financial tax, which is set at 5% of the basis for employer's contribution.

The tax authorities have announced that they will not impose  compulsory penalties for late filing of A-meldingen due between March and June 10. 

The tax authorities also state that they will not impose compulsory fines on late filing of the personal income tax return for self-employed individuals. We assume that this is valid until June 10.

Recently, the Tax Authorities has issued several statements of principle that temporarily makes an exception from the current regulations.

Employees who work abroad - the one-year rule 

The one-year rule is used to reduce double taxation for employees who work abroad and are liable for taxation there. The rule contains certain conditions, including the number of permitted days of residency in Norway and requirements for continuous work outside Norway. The recent statement applies to the conditions regarding residence days and suspends the term which demands continuous work outside Norway.

Single commuters - frequency of visits

The Tax Authorities state that the requirement to return home every three weeks to be considered a commuter is not absolute. If there are circumstances such as closed boundaries, lack of flights or if travel entails quarantine, one can deviate from the requirement of returning home.

Benefits in kind due to the corona situation

Because of the current situation, many employees receive various benefits in kind from the employer to be able to effectively use a home office. The Tax Authorities states that when benefits are granted for reasons of reducing infection and to keep the activity going, benefits that would otherwise have been taxable will now be treated as tax-free benefits. It is the employer who is closest to assessing the purpose of a measure.

The Tax Authorities have further stated that company cars parked at home during layoffs will not trigger taxation for the employee. It is a condition that the company car is not used privately during the period.

6. VAT

Action

• Deferred payment deadline for the first VAT term. The payment was due this year on April 14, but is now postponed to June 10, 2020.
• The low value-added tax rate is reduced from 12% to 6% from April 1 until October 31, 2020. 

Practical approach 

The decision entails a liquidity benefit for the time the deferral applies, and the companies can thus await payment of the 1st VAT-term (jan/feb) until June 10, 2020. Reporting, i.e. submission of a tax return for VAT is due on April 14 as normal.

The low value-added tax rate is reduced from 12% to 6% from April 1 until October 31. This will mean that the following services will initially be slightly cheaper (to the extent that they are traded):

• Passenger transport services (passengers in cars on ferries, taxi rides, bus trips, etc.) 
• Transport of vehicles (e.g. ferry service including transportation of the driver) 
• Rental of hotel rooms 
• Movie tickets 
• Museum tickets 
• Entrance tickets to amusement parks and adventure centers (e.g. water parks) 
• Access to football matches, handball matches, and other sport events. 

On March 16, the Norwegian Parliament asked the Government to propose a reduction of the low VAT rate from 12 per cent to 8 per cent, and that the change should take effect from January 1, 2020.

The Government followed up the Parliament's request in Prop. 58 LS (2019-2020) with a proposal to reduce the low VAT rate from 12% to 8% from March 20, 2020 to October 31, 2020. The Government suggested that the change of the low VAT rate would not have retroactive effect, and instead should take effect from March 20. The original proposal that the rate changes should apply from January 1 was disregarded with reference to the limitations of the EEA Agreement.

The Finance Committee considered that a late entry into force of the rate change would drastically reduce the effect of the measure and in this connection asked the government to further reduce the low value added tax if the changes in value added tax were not given retroactive effect.

In line with the guidelines of the Stortings’ Finance Committee, the Ministry of Finance proposed to reduce the rate by further one percentage point, from 8% to 7% from April 1, 2020 to October 31, 2020. This was made clear in the Cabinet of Ministers on March 27, 2020, where changes in the state budget 2020 were proposed by Second, the Ministry of Finance, as part of new financial measures to mitigate the economic effects of the coronavirus outbreak, cf. Prop. 67 S (2019-2020).

Furthermore, the government assumes that the VAT rate with time can be further reduced, down to 5% without contravening the EEA agreement. 

On March 31, 2020, the Storting decided to further reduce the low-VAT rate to 6%, cf. the Stortings’ request decision no. 443 (2019-2020). The rate change applies from April 1 to October 31, 2020.

The billing and accounting systems must be adapted to the new VAT rate when the government takes effect of the changes. 

The proposal entails a number of practical consequences and we refer to our blog which covers this proposal for a more detailed description of these.

7. Air taxes

Action

• The air passenger tax to the State will be lifted for the period from January 1, 2020 to October 31, 2020 
• Passenger charge, take-off charge and security charge to Avinor AS will be lifted from March 13, 2020 to June 30, 2020

Practical approach 

The airlines themselves or the airlines through a representative must be registered with the tax authorities as taxable persons and report the excise duty through the excise duty return in Elsær. The cancellation of the excise duty from January 1, 2020 to October 31, 2020 means that the excise duty will also be lifted for the excise duty that has already been paid for flights earlier this year.

In order to be reimbursed for air passenger tax paid so far in 2020, registered companies have to correct previously submitted excise duty returns in Elsær, so that the basis for calculation of the excise duty is set to zero. The tax authorities will, based on the corrections, refund the excise duty, including an interest compensation in accordance with section 11-4 of the Tax Payment Act. If the air passenger tax for January and February was paid after the deadline, and late interest rates therefore were calculated, these will be waived and possibly repaid.

No air passenger tax shall be paid for the period up to and including October 2020. The registered companies must submit an excise duty return in Elsær each month, but select "Nothing to report". 

From November 1, 2020, flights will again be subject to air passenger tax. It is irrelevant when the flight ticket was sold. Persons who have purchased an flight ticket that includes the air passenger tax cannot claim the refund from the tax authorities, but must contact the airline. 

With regard to passenger charge, take-off charge and security charge paid to Avinor AS, the Ministry of Transport and Communications, in regulation of March 13, 2020, No. 275, has exempted the said fees in the period March 13, 2020 at 4 am to June 30, 2020 for all commercial aviation. In case of doubt, the Ministry of Transport and Communications decides whether individual flights or categories of flights are covered by the exemption.

8. Excise duties

In addition to the air passenger tax, the Ministry of Finance has also considered measures for other excise duties. The measure below is a proposal from the Ministry of Finance, approved by the Cabinet of Ministers on March 27, 2020 but is not yet processed in the Storting.

Action

• Relief in the terms for destruction of goods subject to excise duties in order to obtain tax exemption
• Deferred reporting and payment deadline for excise duties related to the fuel industry and the brewery industry
• Temporary exemption from CO2 duty on natural gas and LPG used in certain processes

Practical approach 

In Norway, there are over 20 different excise duties. The excise duties are intended to provide the state with income, and some excise duties also have environmental considerations, such as excise duties on various emissions. For goods that are subject to excise duties, the excise duty arises on domestic production or upon importation. It is mandatory to register for excise duties for manufacturers of goods subject to excise duties, while importers have a possibility to register. For registered businesses, the tax liability arises on withdrawals from the company's approved warehouse. The excise duty will therefore be included in the price of the goods when registered businesses sell the goods to customers. 

Registered companies can return a product to their approved warehouse and credit the customer for the excise duty paid. The registered business can then deduct previously paid excise duty in the excise duty return. This way, the goods are returned to untaxed condition. Under specific conditions, it is possible to apply for the destruction of goods subject to excise duties, and obtain a refund. The tax authorities can, on request, consent to destruction being performed at a location other than the approved warehouse.

At a time when many traders are experiencing a loss in revenue, the Ministry of Finance proposes to introduce relief in the terms for destruction of goods subject to excise duties in order to obtain a tax exemption. The tax authorities will waive the requirement for a separate consent, and give a general consent that destruction can be performed at another location, typically at the customer’s location. The tax authorities will provide further information on notification deadlines, process and requirements for the audit trail. 

As a measure to improve liquidity in the fuel industry and in the brewery industry, reporting and payment deferral until June 2020 has been granted for businesses registered with the tax authorities for the following excise duties:

• Road tax on fuel
• Basic fee on mineral oil, etc.
• Tax on lubricating oil 
• CO2 excise duty on mineral products 
• Excise duty on sulfur 
• Excise duty on alcohol, including technical ethanol
• Excise duty on non-alcoholic beverages 
• Excise duty on beverage packaging: environmental tax and basic tax

The excise duties covered by the deferral must normally be reported and paid on April 18 and May 18, respectively. However, due to the postponement, these excise duties must now be reported and paid by June 18. This means that the tax liability arising for the above-mentioned excise duties from March to May is due at the same time for reporting and payment on June 18. Companies using the deferral must submit excise duty returns for the three taxation periods March, April and May separately. It is possible to report and pay the aforementioned excise duties within the ordinary due dates.

A temporary exemption from the CO2 duty on natural gas and LPG has been granted for chemical reduction or electrolysis, metallurgical and mineralogical processes. The exemption is implemented as a reimbursement scheme. This means that businesses registered for the CO2 duty with the tax authorities must sell gas including the CO2 duty and report / pay this to the tax authorities, while the user can apply to the tax office for reimbursement. The excise duty will gradually be raised to the current level over a four-year period. The exemption was introduced with effect from April 1.

Customs - import and export of goods

In the case of imports of goods to Norway, there are mainly only customs duties on imports of food, clothing and other textiles. No relief has been given for custom taxes in connection with the current situation so far, but the Customs Directorate has implemented some relief in the procedures to ensure that freight traffic may proceed as normal.

9. Delivery of food, etc. - use of the cash register to register sales

Action

• Operators who sell food products, etc. as a home delivery service, and who have not adapted the cash system to other means of payment (Vipps, etc.), can register the sales on the cash system in the store as an ordinary cash sale.

Practical approach 

As a result of the coronary pandemic, there is a need to implement schemes for dispensing food, etc. to people who do not visit the place of business. In a statement from the Directorate of Taxes the directorate has assumed that such sales can be registered on the cash system and treated as cash sales, although payment is made only upon delivery to the customer. 

The advantage is that the seller does not have to bring a mobile cash system out to the customer, nor wait for the cash system in the store to be adapted to accept a new payment method, such as Vipps. The seller can register the sale as an ordinary cash sale on the cash register in the store, print the receipt, and bring it out to the customer - ie without the correct payment method (Vipps etc.) being registered on the cash system. Thereafter, the receipts, together with an overview of payments made through Vipps, can be used to reconcile sales in relation to the daily settlement.

However, this is intended as a temporary solution, pending the cash register is being adapted to register the correct means of payment (Vipps, etc.) before the sales receipt is printed.

10. Sick Pay

Action

• The employer-financed period of care benefits linked to the corona pandemic is reduced from sixteen to three days.
• The mandatory waiting period for freelancers and self-employed persons is reduced to three days for absence in connection with the Coronavirus.
• Persons who break national travel boards and receive quarantine duty upon returning to Norway may be denied sick pay

Practical approach 

In connection with the pandemic situation we are now facing, a number of businesses are experiencing many employees getting sick. Regulations adopted with effect from March 16, 2020 state that it is sufficient to fulfill the conditions of disability that the member must be absent from work due to covid-19 or suspected of such illness. If such absence occurs, the employer shall pay sickness benefits for three days, including days with partial absences. The employer then pays benefits from day 4 til 16 and claims a refund from the social security.

The same regulation states that the requirement for a medical certificate for entitlement to benefits under the National Insurance Act may be waived, while at the same time it is pointed out that the Ministry of Labor and Welfare can consider what should be the requirement for necessary documentation in each case. It may be difficult to understand what lies in this, but the purpose behind the exception is to allow the healthcare system to focus all its time and expertise on treating patients. 

On April 17, 2020 regulations stipulated that persons who are subject to quarantine duty after breaking the national authorities' travel advice may be denied sick pay. The change was made after seeing examples of the fact that several with the knowledge and will defied travel authorities.

The Ministry of Labor and Social Affairs is now working on drawing up more detailed guidelines related to the specific measures mentioned above.

11. Care benefit

During the corona pandemic several adjustments were made in the regulations for care benefits. There was given a right to care benefits in relations to closed schools and kindergartens, the quota was expanded, and it was opened for transferring of care benefit days between parents. In addition the employer financed days were reduced to three days. Now that society is slowly reopening, the government is suggesting that the measures are terminated and that the care benefits quota is reset to point zero from July 1. 

Resetting to point zero will mean that the normal yearly quota is set for disposition for the last half of 2020. This is justified since many will probably need more care benefit days in the fall due to stringent demands for infection control in schools and kindergartens. At the same time the reset makes sure that those who have not used the extra quota so far cannot transfer a big quota for the last half of 2020. 

When the employer financed period increases from three to ten days, the government suggests that all employers shall cover what remains from the normal employer financed period before applying for a refund from the social security scheme.

12. Management of laid-off employees with private pension schemes

Action

• It has been proposed that employers may let temporary laid-off employees remain members of the company's occupational pension scheme during the lay-off period, even though it is basically stated in the insurance agreement that these agreements are to be terminated.
• The employer will only be obliged to pay administrative costs for the employee's pension scheme

Practical approach 

The measure only applies to employers who have not already included in their insurance contract that temporary laid-off employees shall remain members of the company's occupational pension scheme. The employer must actively choose this solution for it to apply to the laid-off employees. It has been proposed that during the employer financed term, the employer should not be obliged to pay premiums or contributions to pension accruals or premiums for contribution exemptions on disability for the laid-off employees. The same is also meant to apply to disability and survivor benefits under the scheme.

The temporary laid-off employees are nevertheless entitled to take out continued insurance in accordance with section 19-7 of the Insurance Contract Act, as if the scheme had been canceled. There will also apply certain special provisions for cases where the employee becomes sick during the termination period, and where the employee is still sick when the termination expires.

The mentioned changes will be repealed on October 17, 2020, unless an extension is decided.

13. Suspension of the provisions regarding reduction and cancellation of pensions

Action

Amendments to several of today's pension schemes have been adopted, see:

• Act on the State Pension Fund (Act of July 28, 1949, no. 26)
• The Pharmacist Pensions Act (Act of June 26, 1953, no. 11) 
• The Nurse Pensions Act (Act of June 22, 1962, no. 12 ) 
• Regulations on the combination of contractual pensions for members of the government pension fund, and income from work

The decisions implies that the provisions on shortening and cancellation of pensions based on specified terms will be suspended until November 20, 2020. The Ministry of Finance assumes that the proposed schemes will apply correspondingly to persons receiving pensions from municipal occupational pension schemes that are not covered by the laws mentioned above.

Practical approach

In a pandemic situation, it is very important that the public health sector can provide necessary health care. A large number of sick people will require increased staffing, and the government wants to facilitate the mobilization of qualified personnel. It is assumed that such mobilization will be possible through voluntary recruitment and possibly ordering, and it is hoped that the above measures will make it more interesting for old-age pensioners to register for voluntary service.

14. Temporary lay-off

Action

• The employer-financed period during temporary lay-off is reduced from 15 to 2 days.
• The state compensates salary up to 6 G for the first 18 days during the temporary lay-off. 
• The unemployment benefit basis for lay-offs is increased to 80% of the previous salary up to 3G and 62.4% of the basis over 3G and up to 6G.
• Waiting days for unemployment benefit have been set aside.
• The income limit for entitlement to unemployment benefit during temporary lay-off is reduced to 0.75 G for the last 12 months or 2.25 G for the last 36 months
• The requirement for reduced working hours for entitlement to unemployment benefit is reduced from a minimum of 50% to a minimum of 40%
• Employer's exemption from pay duty after the employer period is extended to employees who were already laid off before March 1, 2020. The measure is valid until October 2020.

Practical approach 

About temporary lay-off

Temporary lay-off means that an employee is temporarily released from the obligation to work, and the employer is temporarily released from the duty to pay remuneration. Since January 1, 2019 until now, the rules have been that the employer has had a pay obligation for the first 15 days of the temporary lay-off period, after which the employees have been able to apply for unemployment benefit from NAV for up to 26 weeks over an 18 month period before the employer's duty of remuneration applied again.  

The Parliament has now provisionally decided that the employer-financed period is reduced from 15 days to 2 days. This measure is intended to contribute to businesses’ liquidity and help to avoid terminations. Employers who have already paid two or more days of salary during temporary lay-off before March 20, 2020 are not obligated to pay salary after this. From this point the state compensates the salary for 18 days, before the employees can receive unemployment benefits from NAV. 

The employers duty of remuneration

The employer-financed period has been reduced from 15 till 2 days. The employer shall pay full salary the first two days after the temporary lay off has commenced, without any limitations. The employer-financed period applies for work days, which are the days the employee was supposed to work and receive salary, not time of duty. If the temporary lay-off is partial the amount of lay-off must be combined, so that the total equals to to work days. E.g if the employee has a 50 % temporary lay-off the employer-financed period is 4 days. 

These adjusted rules will apply till October 2020 for all employers that by the end of June had less than 19 weeks remaining of the period. The days for entitlement to employment benefits is extended equally.

Temporary regulation for salary compensation for employees on temporary lay-off

There is passed a temporary regulation for salary compensation for employees on temporary lay-off to relief the consequences of Covid-19. This regulates the states’ compensation for salary from day 3 to 20 during temporary lay-offs. The benefit is provided to employees who has received salary according to the Obligation to pay wages during temporary redundancy Act (unofficial office translation for “Permitteringslønnsloven”) and applies regardless of whether or not the employees fulfill the terms for receiving unemployment benefits. 

The compensation is given with a daily rate for 18 calendar days with exception for saturdays and sundays, regardless of whether the employees should have had a day off or absence. The period with compensation is therefore equal for whole and partial temporary lay-offs. The benefit can be granted from March 20, 2020, even if the application is put forward later. The benefit is paid out as a lump sum.

The temporary regulation section 4 regulates the calculation of the salary compensation. 

The salary compensation shall be equal to gross lay-off salary according to the “temporary lay-off salary regulation”. The compensation is limited to 6G divided by 260. 

Employers who have offset te benefit in the form of wages  for the period in which the state’s wage compensation applies, can be reimbursed paid salaries upwards limited to 6G per year. The employer can also receive a refund for salary paid out during the compensation period for temporary lay-offs that began before April 20, 2020. Salary paid out during the compensation period after this date will not be refunded. The deadline for applying for refund is August 31, 2020. For temporary lay-offs that commence after April 20, 2020 it will not be possible to receive compensation if the employer gives an advance of salary. 

Unemployment benefits 

After two days of  salary from the employer, and 18 calendar days with compensation from the state, the employee can receive unemployment benefits for 26 weeks for a period of 18 months. Employees who meet the terms for unemployment benefits should apply for this as soon as a notice for temporary lay-off is received. 

Unemployment benefits is given after applying, given that the terms are fulfilled. 

For unemployment benefits a scheme has been introduced whereas employees receive an income of min. 80% of unemployment benefit up to 3G and 62.4% of unemployment benefit over 3G and up to 6G

In addition, the income limit for entitlement to unemployment benefit is reduced to 0.75 G in the last 12 months or 2.25 G in the last 36 months. 

After the termination of the employer-financed period, employees who have applied for unemployment benefits previously had to wait three days before the unemployment benefit was paid out. These waiting days are now temporarily suspended with effect from March 20.

Normally the employers salary obligation will resume after 26 weeks of unemployment benefit from NAV. Many workers were already laid off before the outbreak of the coronavirus, and several of them are now approaching the maximum allowance period from NAV. The Government has therefore implemented a scheme whereby the employer 's exemption from pay duty is extended to the employees who were already laid off before March 1 2020. The extension is valid until October 2020. The extension applies for everyone who has less than 19 weeks left of the unemployment benefit period by June 2020. 

NAV has received a large number of applications for unemployment benefits which can make the processing of applications take long. The Government has on March 27, decided that NAV can prepayparts of the unemployment benefits. The arrangement will allow NAV to pay out about 60% of the salary, before this is later settled against the final unemployment benefits. To receive an advance payment one must apply for and fulfill the requirements for unemployment benefits.  In addition the employee must apply for an advance payment. An application form will be available at nav.no.

15. Rights to unemployment benefits during the Easter and Christmas holidays

The government has decided that laid-off employees are entitled to unemployment benefits during the Easter and Christmas holidays, provided that the employee meets the general conditions for receiving unemployment benefits. The amendment applies from March 20, 2020. 

Before the amendment, the rules were such that during the Easter and Christmas holidays, no unemployment benefits were granted without an application from the employer. The demand for an application applied to the period from Palm Sunday to Easter Monday, and from December 20 to January 1. This special rule applied for employees who were laid off for six weeks or less, and was introduced to avoid employers using layoffs to give employees leave at holidays.

The change implies that unemployment benefits will be handed out as normal during the Easter and Christmas holidays, without the need for an application from the employer. This means that as a general rule, you will receive unemployment benefits equivalent to five working days per week, also during the Easter and Christmas holidays.

16. Self-employed and freelancers

Action

• From day 17 after documented loss of income, self-employed persons and freelancers can receive compensation for 80% of the compensation basis.
• The basis for compensation is calculated differently depending on whether you are self-employed or freelancer.
• You must be in the age group of 18-67 years, have personal income from industry or assignment above 0.75 G and have lost all or part of the income as a result of covid-19 outbreaks.
• The application function is expected to be in place in early May

Practical approach

A temporary regulation on compensation benefits for self-employed persons and freelancers who have lost income as a result of the outbreak of covid-19 has been passed. 

If the loss of income triggers the right to other benefits for subsistence, you are not entitled to compensation benefits according to the regulations based on this loss of income. 

It is self-employed persons or freelancers with personal income from industries or assignments above 0.75 G, in the age group of 18-67, who can apply for compensation if they have lost all or part of this income as a result of covid-19 outbreaks.  

Compensation benefit is not granted to self-employed persons and freelancers who have earned income, including the right to unemployment benefit, sickness benefit or care benefits pursuant to Chapter 4, 8 or 9 of the National Insurance Act totaling 6 G or higher. 

If one meets the conditions for the benefits, compensation will be granted with 80% of the compensation basis limited up to 6 G. Compensation is granted from day 17 after documented loss of income. 

As a general rule, the compensation basis for self-employed persons is calculated based on the gross employment income from 2019. 

For freelancers, the compensation basis is generally calculated based on the average income that the freelancer has commissioned and reported to the scheme in the last 12 months prior to March 2020. For freelancers who started their business between March 1, 2019 and March 1, 2020 the entire operating period is used. 

17. Creation of a government loan guarantee and reintroduction of the Government bond fund

The government has adopted two rescue packages totaling NOK 100 billion to help companies in crisis:

• The creation of a government loan guarantee with a limit of NOK 50 billion, aimed at new bank loans to small and medium-sized enterprises in need of external financing.The loan scheme is approved by ESA (EFTA's supervisory body) and the banks can as of now apply it. Work is underways on a delimitation of the companies eligible for loans under the scheme.
• Reintroduction of the Government Bond Fund with a limit of up to NOK 50 billion, with the intention of providing increased liquidity and capital access in the bond market.

The Government has recently decided that the loan guarantee scheme will also apply to larger companies. Larger companies are companies that have the right or duty to register in the Register of Business Enterprises (Brønnøysundregisteret) and who do not meet the requirements of the regulations for small and medium-sized companies.

The guarantee scheme is based on the state guaranteeing 90% of bank loans to companies that have an urgent need for liquidity as a result of the virus outbreak and the ongoing infection control  measures. For large companies, the borrowing limit is set at MNOK 150.

On March 27, the State Guarantee Scheme for Loans to Small and Medium Enterprises came into force. A supplementary regulation has also been given by the Ministry of Finance.

The regulations given by the Ministry of Finance contain conditions regarding who is eligible to receive support from the loan guarantee scheme. It is also stated how the NOK 50 billion guarantee framework should be distributed among the recipient financial institutions. It is the regulations that have now been amended to include a scheme for larger companies.

Some of the key conditions for receiving a loan under the loan guarantee scheme are that there is an acute liquidity shortage, and that the company because of the current situation would have had difficulty in obtaining external financing. The main reason for the company's liquidity shortage must be the direct or indirect effects of the virus outbreak. Companies that were in financial trouble on December 31, 2019 cannot make use of the scheme.

A ban has also been placed on using loans under the scheme for early repayment of existing debt. Loans under the scheme will have a maximum term of three years from disbursement, and the financial institution issuing the loan must, on behalf of the state, demand an annual guarantee commission from the borrower. 

In principle, the banks are to administer the scheme and ensure that the loans are distributed in accordance with the terms set in the regulations. GIEK (“Export Credit Guarantee Institute”) shall receive reports from the banks once a month.

In a request, the Norwegian Parliament’s  majority has asked the government, in special cases, to arrange for loans under the scheme to be granted to small and medium-sized enterprises exceeding NOK 50 million. The Norwegian Parliament  also asked the government to provide a broader assessment of the structure of the loan guarantee scheme.

The Ministry of Finance has decided that the loan guarantee scheme will be extended, and banks can therefore provide guaranteed loans even after 1 June. The Scheme might be extended for the remainder of the year, subject to an assessment of the Norwegian economy. The extension beyond June 1 must be approved by ESA (EFTA's monitoring body). Regulations will be established as soon as such approval is obtained.

18. Board meetings and shareholders’ meetings

• For limited private companies, it is possible to arrange a shareholders’ meeting without meeting in person, if no shareholders oppose this, cf. the Norwegian Limited Liability Act section 5-7. The public limited companies do not have the same options as limited private companies to arrange a simplified shareholders’ meeting. However, the Norwegian Public Limited Liability Companies Act allows the board to decide that shareholders may attend the shareholders meeting by using electronic means.
• The Norwegian Limited Liability Act also opens for board meetings to be held in any way that the board considers appropriate. This opposed the situation for public limited companies, where a physical meeting is required by the Public Limited Companies Act. 
• The detailed requirements for digital meetings were implemented on March 27, 2020 through the Corona Act.

During Easter weekend, new temporary regulations were given to facilitate a simplification of the conduction of shareholders meetings and annual meetings under the current conditions. Access to digital meetings was also expanded for joint housing ownerships, housing cooperatives and co-operative building society. In addition, certain companies were granted the right to postpone shareholder meetings / annual meetings.

The Government proposes to postpone the deadlines for establishing annual accounts, annual report and audit report, as well as for holding the annual general meeting and annual meeting, by two months.

19. Temporary Reconstruction Act

In order to prevent initially healthy businesses from going bankrupt, and the subsequent loss of jobs and values, the government has on April 15, 2020 proposed a new temporary law to achieve more effective debt negotiations. In order to distinguish this from the current provisions regarding debt negotiation, the proposed scheme is called reconstruction. The law is proposed to apply until January 1, 2022. 

The proposal is similar to the US "Chapter 11" negotiations, and includes, among other things, rules on super-priority for loans that finance the restructuring plan, i.e. mortgages with priority over existing mortgages.

The purpose of the proposal is to give vulnerable companies more instruments in negotiations with creditors than what is available to them  under current legislation. Some examples of such instruments are that restructuring could be initiated earlier than today, while the debtor still has funds left. It will be easier to adopt a restructuring plan by removing the requirement for equal distribution of creditors and minimum dividend requirements, as well as giving greater access to full or partial sale of the business and conversion of debt to share capital, just to name a few.

20. Changes in mortgage regulations

The Ministry of Finance has decided to increase the flexibility ratio for the housing loan regulations by 10 percentage points, from 10% to 20%. The change enables the banks to more freely give exemptions from repayment to its mortgage customers. The change takes effect from April 1 for the second quarter of 2020, but may be extended. The Ministry of Finance also states that banks can grant a deferral of interest and repayments for up to six months.                                              

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This blog post is written by Erik Stenvik Granly, Ronja Sommer, Henrik Smeby, Kjetil Øpstad, Anni Haugen, Lene Sakariassen, Ida Solberg Henning, Hanna Brodersen, Torbjørn Stokke, Marit Barth and Ståle Wangen.