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Law360 (March 20, 2020, 7:45 PM EDT ) Norway's government presented legislation Friday that would temporarily reduce the value-added tax, postpone tax filing deadlines and add worker and business protections under a 280 billion kroner ($24 billion) plan to boost the economy amid the coronavirus pandemic.
The measures, which were announced earlier this week, are targeted and designed "to secure viable businesses and jobs" in the country of 5.4 million people, Finance Minister Jan Tore Sanner said in a statement.
In separate bills submitted to the Storting, the single-house Norwegian legislature, the government is seeking to cut the nationwide VAT to 8% from the current 12%, from Friday through Oct. 31. The reduction would cost the government about 1.24 billion kroner this year, according to the statement.
In addition, businesses and individuals responsible for VAT will have until June 14 to make first-quarter payments. The current deadline is April 14.
Companies liable for employee withholding taxes won't have to make second-term payments until Sept. 1 rather than the scheduled cutoff of April 15. Employees' payroll contributions to social programs will be deferred to Aug. 15 from May 15, the government stated.
The various tax deferrals will affect about 117 billion kroner in payments, according to an official estimate.
The government has invoked emergency powers in recent days to shut numerous public and private institutions and warned residents against foreign travel. The number of confirmed coronavirus cases in Norway rose to 1,742 on Friday, with seven confirmed deaths, the Institute for Public Health said.
In presenting an outline of the stimulus package Sunday, Prime Minister Erna Solberg had said her country's economy was "facing a very challenging situation." She pledged the government would "do what is needed and provide the necessary funding to safeguard the Norwegian economy and support Norwegian businesses, large and small."
Along with the tax provisions, the legislative package includes two proposed lending programs that the government said would provide up to 100 billion kroner in support for Norwegian businesses, improving their access to credit to ensure liquidity.
The first program will provide state guarantees for banks' new loans to small and medium-sized domestic enterprises that are suffering losses as a result of the pandemic. The initial package, worth 50 billion kroner, will be increased if needed, the government said.
The second lending initiative calls for reinstating the government bond fund, which was last used in the aftermath of the 2008 global financial crisis. The fund would contribute to increased liquidity and access to capital in the Norwegian bond market, where larger companies typically raise their financing.
The government bond fund will provide up to 50 billion kroner to be invested in bonds issued by Norwegian companies. It will be managed by Folketrygdfondet, the entity that oversees Norway's government pension fund.
--Editing by Joyce Laskowski.
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