Norway notifies the reintroduction of regionally differentiated social security contributions

Today, the Norwegian government formally notified the EFTA Surveillance Authority (ESA) of its intention to reintroduce the scheme of regionally differentiated social security contributions in large parts of Norway with effect from 1 January 2007.

15/08/2006 :: “We have had a thorough dialogue with ESA and now have every reason to believe that the scheme will be approved,” say responsible Ministers Kristin Halvorsen and Åslaug Haga.

Finance Minister Halvorsen stresses that the government has done its utmost to be able to get acceptance for a scheme that is as similar to the previous one as possible.  It has thus been an aim to reintroduce the system in all areas which were previously eligible for regionally differentiated social security contributions.

Minister of Local and Regional Development Haga points to the new stringent guidelines on regional aid that apply to the scheme and states that “it is nevertheless a very good result for rural Norway and a large step forward for Norwegian regional and rural policy” that the new scheme may be introduced in large parts of the area covered by the previous one. Haga stresses that all areas in which the new system is not reintroduced will be compensated.  Municipalities where this is the case will continue to benefit from a tax reduction through a de minimis scheme. Regions that will have a higher rate than in 2003 will receive funding for regional development as an alternative.

The scheme that the Norwegian government now asks ESA to approve covers all of Northern Norway. Finnmark and Northern Troms will retain the zero-per cent tax rate. In Southern Norway, all municipalities within zones 3 and 4, as well as more than half the municipalities within zone 2, will be covered by the scheme. Tromsø and Bodø will have a somewhat higher tax rate than under the previous scheme, but 7.9 per cent is still a substantial reduction compared to the full rate of 14.1 per cent. The new scheme will furthermore exclude fewer sectors than the previous scheme.

(Published 12.06.06)

Send this article to a friend
Print version

Minister of Local and Regional Development Åslaug Haga and Finance Minister Kristin Halvorsen