Section 3a-2 of Chapter 3a of the Regulation includes provisions concerning the repayment of grants if the enterprise makes a profit. An enterprise making a profit of more than NOK 50,000 in the accounting year relevant to the support period must repay the amount exceeding NOK 50,000. This does not apply to compensation that is received for lost stock. Information about the calculation rules is provided below:
Concerning the grant periods November and December 2021: If the enterprise makes a profit, any deficit in 2020 may be deducted from the profit.
Concerning the grant periods January and February 2022: If the enterprise makes a profit, any deficits in 2021 and 2020 may be deducted from the profit.
This provision applies to private limited companies, public limited companies, co-operatives, partnerships covered by the Partnerships Act, and foreign enterprises engaged in commercial activity which are registered either in Norway or on the Norwegian continental shelf. Sole proprietorships are not covered.
It is the accounting profit (ordinary result before tax) which is used as the basis for the profit calculation. The calculation must follow the financial year used by the enterprise.
Concerning the application periods November and December 2021:
If the enterprise made a profit greater than NOK 50,000 during the financial year to which the grant period belongs, a deduction must be made for any negative ordinary result before tax from the previous year. Any profit from the previous year should not be included.
Any grants received by the enterprise under this scheme must be taken into account in the accounting profit in 2021. This is because, under the deferral rules, income must be recognised in 2022 (see the section on accrual).
If the profit, including the grant from this scheme, results in a profit greater than NOK 50,000, you will receive a repayment demand from the grant authority.
Before applying for grants for November and December, you should therefore consider whether your enterprise will make a profit of more than NOK 50,000 during the income year.
Example calculation for the periods November and December 2021
|Grant for December||110,000|
|Calculated profit 2021||140,000|
|Repayment demand (140,000 – 50,000)||90,000|
Concerning the application periods January and February 2022
In order to calculate whether the enterprise has made a profit greater than NOK 50,000 during the financial year to which the grant period belongs, a deduction must be made for any negative ordinary result before tax that the enterprise would have recorded if the financial year 2020 and 2021 were to be added together.
Grants from this scheme received for the grant periods November and December 2021 must be deducted (see accrual of the grant below).
If the profit according to the calculations exceeds NOK 50,000, you will receive a repayment demand from the grant authority.
Before applying for a grant to cover fixed, unavoidable costs, you should therefore consider whether your enterprise will make a profit of more than NOK 50,000 during the income year.
Example calculation of deficit/profit for the periods January and February 2022
|Deficit 2020||– 70,000|
|= Total negative result 2020 and 2021||– 10,000||– 10,000|
|Grant for December 2021||– 50,000|
|Calculated profit 2022||30,000|
Accrual of the grant:
Applies to enterprises with a financial year ending 31 December 2021:
As the regulations relating to the grant scheme were not available until 2022, the grants for November and December 2021 must be recognised as income in 2022.
Even if the grant is recognised as income in 2022, the grant must still be included in the calculation to determine whether or not the enterprise made a profit in 2021. You should perform the calculation yourself to determine whether your enterprise made a profit under this provision. The calculation will also be performed automatically by the grant authority when your enterprise has reported the accounting information for the financial year via its tax return.
It is therefore important that the grant is accrued correctly and not recognised in the enterprise’s accounts as income during 2021. If the grant is accrued incorrectly, the grant will be calculated as income twice in the same year through the automatic calculation and the enterprise may receive a repayment demand as a result.
If the grant is greater than the profit, the enterprise will only have to repay an amount equal to the profit in excess of NOK 50,000.
Enterprises do not have to repay the grant if the profit is less than NOK 50,000.
The repayment demand will not apply to compensation that is received for lost stock.
It is the enterprise that received the grant that is responsible for repaying the grant.