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State Aid

State aid: Norway allowed to renew important regional aid scheme

18.6.2014

PR(14)37

The EFTA Surveillance Authority today decided to approve the system of regionally differentiated social security contributions in Norway, notified by the Norwegian government earlier this year. Thus the aid scheme can be renewed for another seven years.

«This scheme is an important tool in Norwegian regional policy. With the adjustments that are now in place, the scheme can be prolonged under the new guidelines on regional state aid,» said Ms. Oda Helen Sletnes, the president of the Authority.

The system with differentiated social security contributions is the most extensive aid scheme in Norway. The total annual reduction in social security contributions for undertakings affected by the state aid rules is estimated to be more than 900 million euros. The new rules require that such aid schemes are thouroughly evaluated.

«I welcome the Norwegian authorities' commitment to carry out a comprehensive evaluation of the effect of the scheme, both with regard to economic development and impact on competition,» said Ms. Sletnes.

All employers in Norway are subject to compulsory contributions to the national social security scheme, calculated on the basis of the gross salary paid to the employees. The general tax rate is 14.1%. This tax rate is reduced in the five geographical zones covered by the scheme, from 10.6% in the southernmost zone down to 0% for the northernmost zone covering Finnmark county and certain municipalities in Troms county.

The tax reductions at issue represent operating aid to the beneficiaries as it reduces the aid recipients' current expenditure.  

Norwegian authorities have expanded the scheme geographically to include 31 new municipalities. At the same time, the sectoral scope of the new rules is tighter than before, meaning that some sectors will no longer receive aid by means of a reduced social security contribution

The Authority considers the aid to be appropriate and necessary for the common objective of reducing depopulation in very sparsely populated areas. The scheme was assessed under the new guidelines on national regional aid, adopted in 2013.

 

Documents

 

For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187




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