26 March 2020

COVID-19 in Norway. Emergency plan for the support of the national economy

At the time of writing this article, the statistics show that in Norway there are 2.385 confirmed cases of infections, with 7 deaths related to the virus. Everything indicates that the economic crisis is posing a real threat to the Norwegian, as well as the worldwide economy. Due to that, the government has stepped up to meet the expectations of domestic enterprises and employees, who have found themselves in a difficult situation. The Emergency Plan is a set of proposed provisions that will override the current in an attempt to help the national economy.

Mind that some of the proposed measures are still in the project stage. They can be readjusted or superseded before they undergo the entire legislative path from the law project to the King’s definitive approval.

Support for the business and employees

The proposed plan assumes set of facilities, reliefs, and delays, adjusted to the situation of small business as well as employees that are eventually left without the sources of income (due to contracts of mandate/work lack of the employment security) or have to balance their everyday functioning between working remotely and taking care of their children, parents, and family.

The first part of the Emergency Plan includes the crisis financial package of 100 billion NOK towards funding government-guaranteed loans, which will be available to small and medium-sized entrepreneurs facing insolvency or stoppages in trade turnovers.


As for the new regulations regarding the tax system, there is a proposition of indefinite deferment of deadlines for:

  • payment of VAT – due April 14th;
  • payment of the withholding tax – due April 15th;
  • employers’ contributions – due May 15th;
  • wealth tax (temporary agreement applied only for businesses with a negative annual result for 2020).

Additionally, the government proposes the retroactively applicable reduction of the VAT low rate from 12% to 8%, which can be applied retroactively for every transaction from January 1st, 2020.

Benefits for employees

Employees can expect special provisions related to their work time and available days of leave. The project assumes the doubling of the care allowance day limit for most parents from 10 to 20 days (per parent). The employer period will be reduced to 3 days. Furthermore, the employer period related to sick leave pay will be reduced to 3 days.

In the case of layoffs (permitteringer), the laid-off employees will get full pay for 20 days in advance (up to 6G). The employer period will be reduced from 15 to 2 days.


Because B2B contracts and flexible self-employment work agreements represent an increasing percentage of all contracts concluded in Norway, there should be dedicated solutions that can compensate for the losses resulting from the lack of certain benefits that are present within the full employment contract.

According to the governmental plan, self-employed and freelancers will receive sickness benefits starting from 3rd day of absence and care allowance (financial benefit) from 4th day of absence. Moreover, those of them who lose all of their income (or a significant part of it) due to the pandemic will be given the right for the compensation with the coverage rate of 80% of last year’s average income (limited up to 6G).

Other sectors

The second part of the emergency plan relates to culture, health, education, and infrastructure. It starts with a nationwide reduction in employer’s contributions by 4% for the period of two months which amounts to 10 billion NOK. On par with that, the hubs, centers, municipalities, and the health care system will be financially compensated for extra costs as a result of the pandemic.

As for the education, as a result of the social distancing requirement, the government advises the educational institutions to share the online means of education – universities, colleges, and vocational schools shall switch to remote schooling.

Along with that, a compensation scheme for loss of income for the educational sector will amount to 300 million NOK for the sports and voluntary activities sector – 600 million NOK.

Apart from listed above, the government will work on the additional provisions. We can expect information in a span of a few days. Among the new ideas, we can list a temporary Student Loan Fund scheme for students who experience income loss and proposals that will reduce tariffs on national highways for a limited period.


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