– Task impossible to determine if the rotation drop is due to a virus – E24

The goal of the state’s cash support scheme has been to expand it to cover as much as possible. Although some automatic and manual checks are done in advance, extensive checks will only be done later.

So far, E24 has mentioned two restaurants that should have closed in all or part of March as a result of the renovations, which have received cash support related to declining revenues as a result of the crown crisis.

KPMG’s attorney and tax manager, Ørjan Ravna Rørmoen, is currently helping many companies with questions about cash support. He says there are several uncertainties with the regulations that make it difficult for many to apply.

– Unclear rules combined with disclosure of companies receiving funds can have unfortunate consequences. Companies trying to interpret the regulations as best they can can be accused of abusing the scheme, says Rørmoen.

He believes this may ultimately lead to companies qualifying for the scheme not seeking compensation or making conservative decisions, and thus receiving less support than they are entitled to.

Impossible to control

KPMG’s lawyer says, among other things, that groups have many questions related to whether they should apply to individual companies or collectively as a group, which can mean different support payments.

There can be many reasons why a company has a drop in billing, and it can also be a challenge for the company to know if revenue is falling due to the crown or other reasons.

– It seems that the scheme as it is now, makes it difficult for the Tax Administration to verify that the loss of people’s income is related to the crown?

– Yes, in most cases it will also be impossible. It is one thing that the purpose of the law is to provide support to companies affected by coronaviruses, but it is quite an impossible task to determine if the drop in turnover is due to viruses or something else, such as the drop in the price of oil, he says. Rørmoen.

That said, the Norwegian Tax Agency controls all companies that receive support against various public registries, and another NOK 70 million was subsequently reserved for the control of that agency.

The plumbing at KPMG is supported by colleagues from Deloitte who are also working to advise their clients on cash support.

– There are many doubts about this scheme, and it is regrettable that the Tax Administration obtains a judge role. Now, many unclear issues are being filed with the Ministry of Finance, so we hope that much will be resolved in the future, says tax attorney and head of Deloitte’s law firm in Norway, Rolf Saastad.

Both KPMG’s lawyer and Deloitte’s partner praise the Ministry of Finance for what they have accomplished in a short time, despite the shortcomings.

At E24 we trust the advice of our readers. Contact E24 journalists by email [email protected] and [email protected], or in an encrypted message through Signal or WhatsApp at +4741381407

Deloitte – can receive cash assistance regardless of crown drop

What has been clear since the cash subsidy was introduced in April is that the law and regulations are interpreted very differently.

It is the Ministry of Finance who has drafted the law, and both Deloitte and KPMG believe that it is not necessarily the case that the interpretation of the Tax Administration is correct.

Deloitte Summit Saastad goes as far as to say that while interpreting the regulations, you can get legitimate support even without the drop in billing being linked to the virus.

“When it comes to regulations, I’m not sure if the drop in rotation is due to the crown, I don’t assume that the drop in rotation is due to the virus,” he says, adding:

– The billing concept is demanding for many. It applies a lot to the costs to be included in the application. Managing a store is fairly straightforward, but for larger complex businesses there are many questions about what to include.

Foreign companies blame themselves for negative public relations

As of Sunday, May 10, the Tax Administration had approved 19,082 requests for cash aid.

The government itself has estimated that they can apply for up to 100,000 companies, but Rørmoen explains that there is a particular type of company that is not comfortable with the amount of the cash subsidy and other data that the Tax Agency makes public.

– Many groups with branches outside of Norway consider not applying for funding because they don’t like the publication, he says.

– What is the fear of publication?

– The information that is published contains information that may be sensitive from a competitive perspective. In our view, companies receiving support should also expect media attention if, for example, dividends are distributed or management wages are increased in the future.

Saastad at Deloitte also says they have experienced the same problem with foreign companies.

– There is considerable reputational risk here, he says.

– The tax authorities do not have the function of a judge.

The tax has been presented to the statements of KPMG and Deloitte, and responds that it can be difficult to verify that the loss of income is related to the crown, and not to other causes, such as the fall in the price of oil:

– The purpose of the law is to grant subsidies to companies that have a large drop in turnover due to the corona virus. This means that companies that have a decrease in turnover that is clearly not due to the corona virus will not be covered by the scheme. Examples of this are companies that had already planned closure during the period of redevelopment or renovation of facilities, says Hanne Kjørholt, section manager in the legal department of the Tax Administration.

She further responds to Saastad’s assertion that it is unfortunate that the Tax Agency can be assigned a judge role to assess who receives the support.

– The tax administration has no judicial role, but administers the scheme in the same way that other schemes are responsible for the agency. Decisions can be appealed and ultimately tried in court.

Check which companies have received cash assistance in the daily updated E24 overview: