News / 18.03.2020

Tax relief measures to the COVID-19 virus in Norway

Author(s) Espen Nordbø

On March 13, 2020, the Norwegian Government proposed the first phase of emergency measures to reduce the economic consequences caused by the corona virus pandemic.

Extended Deadline for Payment of Advanced Tax Payments (Forskuddsskatt)

The deadline for payment of the first term advanced tax payment has been extended from March 15, 2020 to May 1, 2020. This applies for all self-employed business operators and individual taxpayers in tax transparent entities.

Tax Loss Carry Back in 2020 – Refund of 2019 and 2018 Income Tax

Limited companies will have the opportunity to carry back up to NOK 30 million of their 2020 tax losses to offset 2018 and 2019 tax profits. This implies a potential refund of up to 6.6 million Norwegian kroner in paid tax for 2019 and 2018. Several conditions apply.

The refund would normally become due in connection with the tax assessment for 2020, occurring in August to October 2021.

Reduction of Advanced Tax Payment by Utilization of New Loss Carry Back Rule?

The proposal does not indicate any possibility to reduce/set-off tax loss against the advanced instalment payment of 2019 income tax, due by April 15. However, the Tax Payment Act allows a taxpayer that can substantiate that its advanced instalment is set too high by the tax collector, to apply for a reduction. This should imply that a company by reference to the new carry-back rule can apply for a reduction of its advance tax charge payable by April 15.

Postponement of Wealth Tax Payment – Reduction of Advanced Tax Payments (Forskuddsskatt) and Advanced Tax Deductions (Forskuddstrekk)

Owners of businesses with losses in 2020 will have the opportunity to apply for a one-year postponement of the wealth tax assessed on the basis of the value of their business assets.

The wealth tax for 2020 is normally due in two advance instalments in the spring of 2021, with a final assessment in late summer 2021. The Government proposal implies that if the business owner can substantiate that the business will have a negative result in 2020, the owner can apply for reductions in the advanced tax instalments for 2020, corresponding to the expected postponed wealth tax.

The measure will contribute to strengthen the liquidity of businesses in with losses, as they will not have to distribute dividends to enable their owners to cover the wealth tax in 2020.

Temporary Repeal of Air Passenger Tax and Airport Tax

The air passenger tax will be temporary repealed until the end of October 2020. Already paid tax for flights in 2020 will be repaid to the airline companies.

All airport taxes are temporarily repealed from March 13, 2020 until June 30, 2020.

Global epidemics and economic impact