EFTA State Aid Report Released

December 21, 2009 International Tax CooperationTaxation in EUTaxation in IcelandTaxation in LiechtensteinTaxation in Switzerland

EFTA Minesterial MeetingOn December 18th, 2009, the European Free Trade Association (EFTA) released the fourth report covering state aid granted in Iceland, Lichtenstein and Norway, for the period between 2004 to the end of the 2008 year. The paper was prepared in co-operation with European Commission and includes comparisons with countries of the EU.

A total of €2,234.88 million was granted in state aid across the three surveyed countries in 2008, indicating an overall increase in grants across the countries. 98.9 percent of this amount was accounted for by aid granted by the Norwegian government.

The report shows that the primary contributions to the 2008 state aid increase were Norway’s tax relief schemes to the maritime sector and compensation to Norwegian farmers for pollution reductions. Lichtenstein increased state aid by 29 percent in 2008, all through funding of cultural and heritage projects. Between the three surveyed countries only Iceland decreased state aid in 2008, lowering their grants by 32.3% compared to 2007.

Norway provided 0.54 percent of it’s GDP in governments grants, compared to Iceland’s 0.13 percent and Liechtenstein’s 0.03 percent. The EU average for the same period was 0.42 percent of GDP. However, if crisis package aid is included in the statistics, then the level of aid granted in Norway is only a quarter of that is average for the countries of EU.

The European Free Trade Association is an intergovernmental organization set up for the promotion of free trade and economic integration to the benefit of its four member states: Iceland, Liechtenstein, Norway and Switzerland.

Photo by NHD-INFO

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