Written by: Økland
The government has decided to propose the following measures within the field of taxes:
- Reversal of previously taxed profits
- Deferred payment of capital gains tax from businesses
- Deferred payment of withholding tax to 1 May 2020
- Suspension of air passenger duties
Here you can find a summary of key changes for you and your business. Please note that the proposals have not yet been passed by the Norwegian parliament and that there could be changes.
The proposition is enclosed here (Norwegian):
Reversal of previously taxed profits
The government has proposed a temporary scheme that allows limited companies to reverse up to NOK 30 million of the company’s 2020 deficits against previously taxed profits in the previous two years, i.e. 2018 and 2019.
Currently, such losses must be carried and deducted from future profits. The tax value of deficits in 2020 will not be paid to the businesses before the 2021 tax settlement. 2020 deficits can be carried in accordance with the ordinary rules. Currently, the intention is for the scheme to apply only to limited companies and not to self-employed individuals. Reversal will take place automatically and businesses who do not want to be covered by the scheme must therefore opt out separately.
It has been proposed that special control measures be conducted if business transfers have taken place during the year in which the deficit arose. Businesses that have completed mergers/demergers in 2018 – 2019 should therefore be aware of how the deficit is reversed and seek advice from a lawyer or accountant if necessary.
Deferred payment of capital gains tax
Furthermore, a temporary scheme has been proposed for deferred payment of capital gains tax on business capital for the 2020 fiscal year. The proposed scheme applies to personal taxpayers who own businesses that have a statutory obligation to keep accounts and have a negative net income for the 2020 fiscal year. The scheme means that the taxpayer can apply for a one-year deferral of payment of capital gains tax for the 2020 fiscal year when it falls due for payment in 2021.
Deferred payment of withholding tax
For self-employed persons, withholding tax falls due for payment four times a year, with the first term due on 16 March. The intention is now that the first term of withholding tax will be given a deferred payment deadline until 1 May 2020. The change has already been accepted by the Tax Administration.
Air passenger duties
The government has also proposed abolishing air passenger duties on flights during the period from January up to and including October 2020. According to the proposal, the duties will be reintroduced from 1 November 2020. Airport duties will also be temporarily abolished.
A proposal has been made to increase support for skills development and internal training. The county administrations will therefore receive increased funding for this purpose in order to meet regional needs. An increase in the allocation of discretionary funds to local authorities that have experienced high additional expenses in connection with the virus outbreak has also been recommended.
It has been announced that there will be further changes within the field of taxes and duties. It is likely that measures will be implemented to provide more immediate effects for businesses that are highly affected by the ongoing situation. This will apply in particular to the industries that are most affected by travel restrictions, closures, etc.
For businesses, deferred deadlines for the payment of value-added tax and withholding tax have been agreed.
Furthermore, low rate value-added tax has been reduced from 12 to 8 per cent. This will apply, among other things, to passenger transport and hotel accommodation.
Changes for private individuals – no changes so far
For private individuals who are not self-employed, there has so far not been any proposed changes with regard to tax liability or the rates applicable to tax calculations. The tax return will arrive between 18 and 31 March 2020.