Norway adopts tax measures in response to COVID-19
During March and April, Norway’s parliament has adopted several measures to meet the financial challenges created by COVID-19. A summary of tax-related measures and other proposed measures follows. Further measures are expected, and a reservation for future changes is also made with regards to the information presented below.
Payment of advance tax
The deadline for the second advance payment of taxes for companies (including limited companies) has been extended from 15 April 2020 to 1 September 2020. The extended deadline does not apply to companies’ subject to the special tax regimes for natural resources.
An extended deadline also applies to the financial activity tax. The deadline is extended from 15 May to 15 August 2020.
Companies may carry back losses incurred in 2020 of up to NOK 30 million per entity against the previous two years’ income. This measure does not apply
to entities and sole proprietorships newly-established in 2020, or sole proprietorships converted to joint stock companies in 2020.
The loss carryback will be applied automatically upon filing of the 2020 tax return (due in 2021). Companies may request to be excluded from this automatic loss carryback when the 2020 tax return is filed.
The tax return for the self-employed persons and businesses
Enforcement fines for delayed filing of the tax return for self-employed persons and businesses are temporarily stopped. The deadline for submitting the 2019 tax return has been extended from 31 May to 31 August. It is not possible to apply for further extensions to this deadline.
Simplification of the reporting obligation – interest limitation
Certain simplifications will be accepted in relation to the submission of the interest limitation forms RF-1315 and RF-1509 for the income year 2019.
Extension of due date for VAT payments
The due date for payment of VAT for the 1st VAT period (Jan-Feb) was extended from 14 April 2020 to 10 June 2020. The deadline to file the VAT returns, however, has not been extended and was still 14 April 2020.
Enforcement fines are temporarily stopped. This includes tax returns for the VAT due from March up to and including 10 June (1 and 2 periods), VAT returns that are submitted with an annual deadline (due 10 March), and the annual statement for the primary industry (due 14 April).
Reduction in certain VAT rates
The “low” VAT rate which applies for domestic travel, hotels and similar accommodations, and cultural and sporting events has been reduced from 12% to 6% as from 1 April 2020 through 31 October 2020.
Air passenger tax abolished
Air passenger tax has been abolished as from 1 January 2020 through 31 October 2020. Air passenger tax already paid by the airline companies during this period will be reimbursed.
Employers’ national insurance contributions
Status: implemented/Proposed – expected approval date end June
The deadline for the second-period payment of employers’ national insurance contributions, which is due on 15 May 2020, is extended to 17 August 2020.
Another proposed measure is to reduce employers’ national insurance contributions by 4ppt (from 14.1% to 10.1%) for a two-month period. The government’s plan is that this will concern the third term (May and June). The measures need to be approved by EFTA Surveillance Authority. The measures therefore need to be further evaluated. Final proposal will likely be proposed 12 May, together with the Revised National Budget. However, employers must continue to report their contributions using the regular rates.
Enforcement fines on employer reporting temporarily stopped
Employers required to file information reports on income and employees (referred to as the “a-ordning” report) will not be subject to late filing penalties starting with the report due on 5 March 2020. The reporting deadline has not been extended and is due still on the fifth of each month.
The deadline for paying the withholding tax for the second payment is not extended. The deadline is 15 May 2020.
Reversal of dividend decisions due to the coronavirus pandemic
In cases where the coronavirus pandemic leads to the reversal of decisions relating to dividends in the period between the time of the decision made in the general assembly and the payment date, the unpaid dividends may be exempt for taxation under certain conditions.
SAF-T (Standard Audit File – Tax)– Relaxation on the deadline 10 April
Companies liable to the Norwegian Bookkeeping legislation shall for reporting periods starting on or after the 1 January 2020 upon request be able to produce and submit a SAF-T file to the authorities, and where this could be requested by the authorities after the filing due date for the 1st VAT period, 14 April 2020. Companies that due to the corona pandemic will not be able to produce a SAF-T accounting file by 14 April do not have to apply for an exemption. The tax authorities will assume that work on SAF-T compliance will be completed at the earliest possible moment.
The temporary relaxation of the requirements to destroy goods
The duty to send a report to the Tax Administration 48 hours in advance of the destruction of goods is abolished until further notice. This applies to all excise duties. In addition, the requirements to obtain approval from the Tax Administration before destroying goods is abolished. This applies in cases where the destruction occurs within the registered enterprise’s own approved premises, and in cases requiring special approval to perform the destruction somewhere else.
Deferred wealth tax
In order to improve cash-flow for business owners, the government implemented a measure allowing certain business owners to apply for deferral of the 2020 wealth tax payment to 2022 (ordinarily due in 2021). This deferral applies to individual taxpayers that own a business that incurs losses in 2020. The wealth tax due must be at least NOK 30,000 in order to qualify for the deferral. With respect to advance payments of wealth tax, if a taxpayer can show that the business likely will incur losses in 2020, then the taxpayer may apply for a deferral of advance tax payments due on 15 May, 15 September, and 15 November 2020.
Compensation for certain operating costs
The government has implemented a Business Compensation Scheme for businesses suffering from financial hardship caused by COVID-19 for operating costs such as rent, lease payments, utilities, insurance, and accounting fees. The scheme will apply to the months of March, April, and May. Compensation would be granted proportionally based on the percentage of reduced income for businesses with at least a 30 % decrease in trade. Businesses prohibited from operating due to COVID-19 (e.g., hairdressers, physiotherapists) will be compensated with up to 90 % of their operating costs. Other businesses that were not prohibited from operating will be compensated with up to 80 % of their operating cost.
Extended reporting- and payment deadline for some excise duties
Reporting- and payment deadlines for April and May are postponed to June 18 for the following excise duties:
- Road use duty on fuels
- The basic fee on mineral oil etc
- Lubricating oil tax
- CO2 excise duty on mineral products
- The excise duty on alcohol
- Excise duty on non-alcoholic beverages
- Beverage packaging tax
Duties on cars and other vehicles
As a result of the coronavirus situation, temporary relief has been granted for the short-term use of foreign-registered vehicles in Norway. Permission has also been granted to privately store foreign-registered vehicles in Norway. The changes apply until further notice.
Taxation of employees
Tax exemption for necessary payments in kind received as a result of the coronavirus situation
Home office equipment, telephone and internet service, and healthcare financed by the employer are tax-free and should not be reported. The tax exemption is grated provided the benefit is temporary, proportional, and based on the need to maintain operations and prevent spreading the virus. Employers should not report these benefits or include as taxable benefits for the employees. The benefits will then not be included in the basis for employers' national insurance contributions. Benefits, such as free electronic communication, provided before the coronavirus situation will still be taxable and subject to reporting.
Use of company cars while laid off- tax liability, withholding tax and duty to report
Private use of a company car is taxable and subject to employer reporting and withholding. If an employee is temporarily laid off, travel distance to the workplace may make it difficult to return a company car. If the car is parked at the employees' home due to the coronavirus situation, taxation for private use could be avoided if it is substantiated that the car has not been used for any private purposes. If the laid-off employee uses the car for private purposes, regardless of the extent, the benefit must be calculated and reported as normal.
Commuter status: The requirement for the number of visits for single commuters during the coronavirus situation
Usually, single commuters are required to travel home every third week to maintain their commuter status. If, as an effort to prevent spreading the virus, a home visit is not carried out every third week, the commuter will still be considered a commuter. He or she will then potentially be eligible for deduction or expense allowances pursuant to the ordinary rules.
Permitted stay in Norway under the one-year rule as a result of the coronavirus
When applying the one-year rule for work in another country, an employee cannot stay in Norway for more than 6 days on average per month during the work period abroad.During the coronavirus situation, specific guidelines clarify that the current situation is seen as an extraordinary event that results in possibilities to extend the stays in Norway. An additional number of days should be evaluated in each case.
Relevant links to more information
The Norwegian Tax Administration
Deloitte Norway’s legal helpdesk
Deloitte Tax & Legal is organized as a law firm offering a wide range of tax and legal services. Click here to access our webpage covering articles in relation to the COVID-19 pandemic and contacts for our legal helpdesk (in Norwegian language only)
Deloitte Global COVID-19 Tax & Fiscal Measures
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