Calculating the subsidy amount for enterprises with mainly seasonal business activity

Last updated: 17.06.2020

Enterprises with seasonal business activity may adjust the subsidy amount upwards according to a seasonal factor for all their fixed unavoidable costs.

Who does this apply to?

In order for an enterprise to be considered to have «seasonal business activity», the enterprise must offer activities or experiences:

  • that mainly take place outdoors, and
  • that are characterised as being seasonal

The main part of the activity/experience must take place outdoors. Examples are alpine and winter resorts and summer and amusement parks. Outdoor dining and drinking  is not considered an activity or experience in itself, but it may be intrinsically linked to such business activity, see below. Previous variations in revenue as a result of a temporary halt in activity, for example during renovations or holidays, does not mean the business activity is considered to be seasonal.

By «that are characterised as being seasonal», we mean activities and experiences that for various reasons can only be provided during a limited period of time. Such reasons are typically natural conditions, for example weather conditions or conditions that are specific to a certain time of year.

Business activity that take place within the same geographic area as the seasonal activity, is considered «intrinsically linked business activity». This type of business activity does not have to take place outdoors. Typical examples are the restaurant in the alpine piste, kiosks and souvenir shops in amusement parks.

If the enterprise stays open in months when the seasonal activity does not take place, this indicates that it is not an intrinsically linked business activity. This could be a cafe located on a busy road right outside an amusement park.

Establishments that offer overnight accommodation are not consider to carry out intrinsically linked business activity, regardless of whether they are located nearby where the seasonal business activity takes place.

In order to apply the rules for seasonal business activity, more than 50 percent of the enterprise’s revenue must be generated by seasonal business activity or intrinsically linked business activity.

The enterprise must define a peak season as six consecutive months. In order to be granted a subsidy according to the rules for seasonal business activity, the peak season must include March, April or May 2019. In a normal year, the enterprise must generate 80 percent of its income during the peak season. If not, the enterprise must apply for a subsidy according to the general rules.

The seasonal enterprises must be registered on the first day of the previous year’s season at the latest.

With the exception of the rules relating to time of registration, enterprises that apply for a subsidy according to the rules for seasonal business activity must also follow the general rules.

This means that the subsidy amount may be limited according to limitation rules 1 and 2 . The maximum subsidy amount according to limitation rule 2 shall be multiplied by the seasonal factor.

The general rule pursuant to section 2-1 of the Regulations stating that the enterprise must have employees or be the owner’s main source of income will also apply for seasonal business activity.

How to calculate the seasonal factor

The seasonal factor is calculated as revenue in the same month in 2019 as the subsidy-month, multiplied by 12, divided by the revenue in the previous year’s season.

The enterprise’s season year must consist of an entire season. If the accounting year includes an entire season, it can be used as the season year. For enterprises that have a summer season, the season year will typically be the calendar year, provided that the enterprise does not have a deviating accounting year. Many enterprises that have a winter season will use a deviating accounting year that is adapted to their season, for example, from 1 May to 30 April or 1 July to 30 June. In these cases, the enterprise’s accounting year will constitute the season year.

If a winter season enterprise does not use a deviating accounting year adapted to their season, the accounting year will not consist of one whole season. The enterprise must then define a season year that includes an entire peak season.

The previous season year must be concluded before 1 March 2020. This means that the last possible season year is from 1 March 2019 to 29 February 2020.

The subsidy amount may then be adjusted upwards using the seasonal factor for all fixed unavoidable costs. This also includes the fixed unavoidable costs that are not related to the seasonal activity.

If the enterprise for example had a revenue of NOK 200,000 in March 2019 and a revenue of NOK 1,200,000 in the season year 2018/2019, the seasonal factor will be 12*200,000/1,200,000= 2.

You must use the same calculation method for all the months

When you apply for a subsidy, you must use the same calculation method for all the months for which you are applying for a subsidy. For example, you may not apply for a subsidy according to the rules for seasonal business activity in March and according to the general rules in April.

If you have already applied for a subsidy for one or more months according to the ordinary method, and you now want to apply according to the rules for seasonal business activity, you must change your previously submitted applications. This means you must submit new applications for these months to apply the rules for seasonal business activity. Previously granted subsidy amounts may then be offset.

How to apply

You must decide whether you want to calculate the subsidy amount according to the rules for seasonal business activity. Here you can get help calculating the subsidy amount according to the general rules. No functionality has been created to calculate the subsidy amount according to the rules for seasonal business activity or to compare the subsidy amount granted according to the different calculation methods.

If the enterprise is applying for a subsidy that is adjusted upwards using the seasonal factor, this calculation method must be used for all the months for which you are applying for a subsidy. The enterprise must then submit a new application that includes previous months.