Legal implications of Covid-19

As the rest of the world – Norway is heavily affected by the coronavirus. The Norwegian Government has taken several initiatives in order to reduce the negative impacts of the ongoing crisis.


The situation is changing from day to day and foreign companies and employers doing business in Norway are of course effected by the crisis. Please find below a brief summary of some specific topics related to foreign business doing business in Norway. Please note that due to the uncertainty it is in general necessary to have a constant focus on possible changes. The highlights below are updated as of 17 March 2020


Import of goods

For the time being, there are no specific restrictions on import of goods into Norway.


This means that transportation of goods by trailer, train, vessel or aircraft, are “business as usual”. Please note that this might be changed on short notice.


The opening hours of the Norwegian Custom Authorities offices on the border are as usual. However, due to the development opening hours may be reduced if quarantine provisions are implemented.


Personnel crossing the Norwegian border

Due to the Corona-crisis the authorities are given an extended right to deny foreign citizens passing the Norwegian border. In general, a 14 days quarantine period has been implemented. For instance, if a German employee shall do some installation work in Norway, the employee needs to be in a 14 days quarantine before he can start working in Norway. This will of course cause delays and needs planning.


So far it is not decided any new specific labour law regulations regarding foreign workers in Norway. The amendments so far due to the Corona-crisis, is related to Norwegian employment contracts and mostly about the possibility employers have to use layoffs as a tool for saving the business in this difficult situation. The Norwegian government has, with support from all the political parties, made amendments where the government supports the businesses taking over the economic responsibilities for the employees on an earlier stage compared to a normal situation.


VAT – postponed due date

Foreign businesses VAT registered in Norway (or via VAT Representative) are obliged to pay VAT at certain deadlines. The next deadline is 15 April, but this deadline is postponed. There are for the time being no additional information related to the postponement but we expect new information from the Ministry of Finance soon.


VAT – reduced rate

The standard VAT rate in Norway is 25 %. Some VAT liable activities in Norway has a reduced VAT rate at 12 % (e.g. food, transportation of personnel, hotels etc). With effect from 1 January 2020 this reduced VAT rate has been further reduced to 8 %.


Tax issues

The Norwegian government has taken some tax initiative to reduce the economic effect of the crisis. Among others, a possibility to use a taxable loss for the income year 2020 against profit in 2018 and 2019 has been implemented. There are also some changes in deadline for paying some taxes.


In general, foreign employees working in Norway shall visit an ID office. To help prevent spreading the virus, the ID offices are closed and new routines for ID has been implemented.


So far, the deadline for filing tax returns has not been postponed. However, it is obvious that the corona crisis may have influence on the practical situation. If the Norwegian accountant or auditor are in isolation, or even worse sick due to the disease, the risk for delay is obvious. In general, our advice is that foreign businesses should plan for delays.


Contract law – Force Majeure

For existing contracts, the Corona situation may in some cases be defined as a force majeure. If for instance a German company has signed a contract with a Norwegian party in August 2019, none of the parties could foresee the Corona virus and the implications worldwide. After the outbreak of the Corona virus, the German company’s liabilities may be impossible to fulfill due to for instance quarantine provisions in Germany or Norway.


In some contracts, a force majeure event could give a party a right to postpone deadlines, but not necessarily a right to claim the other party to cover additional costs. It may also give the other party a right to terminate the contract.


In general, the party may also in force majeure events have a legal obligation according to the contract to inform the other party about possible delays due to force majeure. Since the Corona virus is a worldwide event, a contract party should also focus on subcontractors. If a contract party has engaged a subcontractor, the subcontractor may not be in a position to fulfill the contract.


In general, all foreign companies should review contracts with Norwegian parties to clarify any force majeure events and make sure that the force majeure event is treated in accordance to the applicable contract clauses.


For new contracts, the situation is different. The Corona situation is well known and accordingly, in general, the consequences may not be defined as a force majeure. If a non-Norwegian company considers entering into a contract with a Norwegian party, the parties need to consider the new Corona situation before signing. This also implies risk for future restrictions from the Government. In Norway, for instance, as mentioned above the Government recently decided to implement restrictions for employees working in Norway. If for instance a German employee shall work in Norway, the employee, according to the new provisions, is allowed to work in Norway after a 14 days quarantine.


For new contracts, the parties need to consider possible new restrictions – both in Norway and in the other state.


Rune Andersen

  • Partner | Lawyer

Frode Heggdal Larsen

  • Partner | Lawyer