Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure NO-2020-36/1651 – Updated – measures in Norway
|Country||Norway , applies nationwide|
|Time period||Temporary, 01 September 2020 – 31 December 2021|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Aasmund Arup Seip, FAFO and Eurofound|
|Measure added||05 January 2021 (updated 04 February 2022)|
The Norwegian parliament passed 18 December 2020 a new temporary cash benefit scheme for enterprises with a large fall in turnover after August 2020. The scheme was introduced to ensure continued compensation for businesses that experience a large fall in turnover due to the corona situation for the period September 2020 to February 2021.
The scheme is largely based on the compensation scheme that applied for the period March - August 2020 NO-2020-10/730 .
The new compensation scheme applies to the same industries as the previous compensation scheme and is open to enterprises with a more than 30% loss in turnover as a result of the coronavirus pandemic. The new scheme emphasises a serious assessment and control of the applicant businesses before payment. Applicants must use an authorised accountant or auditor and the auditor or authorised accountant has to confirm the application before it is submitted.
Companies with a fall in turnover of at least 30% can apply for a subsidy. If the fall in turnover has been 100%, the scheme will cover 70% of the company’s unavoidable fixed costs for the period September and October, 85% of the costs for November and December and 80% for January and February 2021. If the company has had a lower fall in turnover, the subsidy is reduced proportionately. The scheme is applicable to all industries with a few exceptions (finance, oil drilling, electricity production and trade, aviation, kindergartens). The new compensation scheme is administered by the Brønnøysund Register Centre, while the first compensation scheme was administered by the Tax Administration.
Funding of the scheme is estimated at approx. NOK 6 billion (€573 million) for the period from 1 September 2020 to 28 February 2021. The budget proposal is an estimate allocation, which follows from regulations laid down by the Storting.
Summary of the scheme by 06 April 2021:
The top 5 industries to receive support, measured in NOK, are in descending order: accommodation, food and beverage service activities, passenger water transport abroad, passenger water transport inland and sport activities.
|Does not apply to workers||Applies to all businesses||Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Any other form of consultation, institutionalised (as stable working groups or committees) or informal||Any other form of consultation, institutionalised (as stable working groups or committees) or informal|
Social partners' role in the implementation, monitoring and assessment phase:
Social partners have been consulted regularly during design and implementation of the measure.
The social partners are supportive of the measure.
Both the employers and the unions criticised the Government’s proposal of 6 January 2021 to extend the Business Compensation Scheme. The Confederation of Norwegian Enterprise (NHO) asked for better compensation rate and that compensation must not be limited by the scheme’s total budget. The Norwegian Confederation of Trade Unions (LO) wanted to prolong the scheme further than the government, to reduce uncertainties for business. The social partners largely support the Parliament’s amendments to the Government’s initial proposals.
Regarding the amendment to the business compensation scheme for November and December 2021, Confederation of Norwegian Enterprise (NHO) expressed in its consultation response of 4 January 2022 to the amendment that the government's proposal provides more unpredictability. The employer’s organisation does not support that a company must repay grants if the company makes profit for the year as a whole. Neither does it support the requirement to repay grants before the company pays dividend. Confederation of Norwegian Enterprise (NHO) regards the grants as compensation for loss caused by the authorities’ infection control measures and believes this should also apply to companies that are able to make a profit. Regarding the restriction on pay of dividend, the employer’s organisation argues that company owners with weak liquidity who want to move capital from one company to another to secure necessary investments and jobs will not have the opportunity to do so. Owners who need to take out dividends to pay wealth tax can not do so either, without repaying grants. Hence, the requirement to repay grants before the company pays dividend can work against its purpose, in that the support does not go to those who need it most, the employer’s organisation argues.
Eurofound (2021), New business compensation scheme for enterprises with large fall in turnover, measure NO-2020-36/1651 (measures in Norway), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/NO-2020-36_1651.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.