The EFTA Surveillance Authority (ESA) has approved an amendment to Norway’s tax refund scheme for employers of Norwegian and European Economic Areas (EEA) nationals on vessels in the Norwegian International Ships Register (NIS).

The current scheme offers a 26% reimbursement of income tax and social security contributions made by employers for ships generally in the NIS.

This will be increased to 100% for vessels over 10,000 dwt involved in long-distance trading, including tankers, chemical carriers, gas carriers and ro-ros.

The Norwegian government applied for the amendment last month on the grounds that the refund aid has only marginally increased employment of Norwegian and European seafarers, as the 26% amount is “insufficient to equalise the wage differences in high-cost countries compared to low-cost countries”.

The ESA approval is intended to stimulate such employment and also to make the NIS more competitive versus other flags.

The Norwegian Maritime Directorate (NMD) says the decision will cover over 400 seafarers. It is estimated to apply to 90% of the 81 vessels currently listed in the NIS.

Vessels from 3,000 dwt up to 10,000 dwt engaged in shortsea trading between European ports, including Norway, are not included in the amendment.

The amendment takes effect retrospectively from 1 July with a deadline of 25 September for applications for the July-August tax period.

The ESA estimates it will cost the Norwegian government an extra NOK 80m ($10.2m) per year.

“This is great news. The broadened scheme will boost the competitiveness of Norwegian seafarers on NIS ships in foreign trading,” said Norwegian Maritime Directorate head Olav Akselsen.

His sentiments were echoed by trade and industry minister Monica Maeland: “Norwegian maritime competence is decisive for the competitiveness of the entire maritime cluster. Broadening the refund scheme ensures that we can maintain Norway’s special competence in overseas shipping.”

The Norwegian government in total will allocate NOK 2.18bn towards the employment of Norwegian seafarers in 2017, according to the Ministry of Trade, Industry and Fisheries.

The refund scheme runs for 10 years from 2016 to 2026 as part of the government's maritime strategy.