U.S. DEPARTMENT OF COMMERCE. DANIEL C. ROPER, Secretary ALEXANDER V. DYE, Director Comparative Law Series By Charge d'Affaires a. i. Jefferson Patterson, Oslo DEDUCTION OF RESERVE FUNDS FROM TAXABLE INCOME IN SWEDEN By Assistant Trade Commissioner F. A. M. Alfsen INSURANCE IN CHILE. MEXICAN INSURANCE LAW APPLICABLE TO AUTOMOTIVE TOURISTS. By Assistant Trade Commissioner Katherine E. O'Connor COMMERCIAL LAWS FORUM. Commercial Law and Legal Notes. - Labor, Conscription ....... SELECTED STATISTICAL STATEMENTS: . . SURVEY OF LIFE INSURANCE SALES RESEARCH BUREAU. Subscription: $1 a year; single copies, 10 cents. Make remittances only to Superintendent of Documents, Washington, D. C. Published with the approval of the Director of the Budget By Charge' d'Affaires a. i. Jefferson Patterson, Oslo Introduction Two laws enacted by the Storting and approved by the King of Norway on April 8, 1938, have as their object the stabilization of Norway's economic life. The Workmen's Fund Law is designed to protect the employees of business enterprises against economic difficulties due to fluctuations in the enterprise employing them, and the Reserve Fund Law to protect the individual enterprise in periods of emergencies. The Workmen's Fund Law provides for the establishment of allowances to employees in the nature of unemployment and old-age insurance. Agriculture, forestry, gardening and related occupations, as well as fishing (other than whaling) are excluded from the provisions of the law. Application of the law is limited to enterprises having capital or net assets of at least 100,000 kroner, so that many small businesses are exempted. Joint-stock companies possessing this capitalization are to make payments into the workmen's fund in fiscal years wherein the companies' shareholders receive dividends in excess of 6 percent of their capital and assets. Similar obligations are imposed on associations other than joint-stock companies as well as on enterprises of individuals. The Reserve Fund Law provides for the laying aside of sums to safeguard private enterprises in emergencies. The passage of this law did not introduce a new principle in Norwegian economic life, since ordinary corporations, excluding those engaged in shipping or other special lines of activity, have in the past been obliged by law to set aside one-tenth of their annual surplus until a reserve fund reached one-tenth of the capital. In addition, the new law provides that if dividends are paid in excess of 5 percent, a sum equal to such excess must likewise be contributed to the reserve fund. Both of the new funds are exempt from the tax levied on undistributed profits (fondsskatt), the rate of which at the present time is 6.5 percent. TEMPORARY LAW OF APRIL 8, 1938, REGARDING THE WORKMEN'S FUND We, HAAKON, King of Norway, do hereby make known that the Storting's decision of March 29, 1938, as follows, has been presented to Us: SECTION 1 There shall be established a Workmen's Fund, the resources of which shall be applied: (a) To old-age and disability pensions and to the support of workers without employment in case industries suspend operations, undergo alterations or restrict operations, and (b) To increase the free-income limit for recipients of the old-age pension. Reference: Law regarding Old-Age Pensions of July 16, 1936, Section 7. The Fund forms an independent legal entity and its resources shall be administered separately from the State Treasury. Additional regulations regarding the organization and work of the Workmen's Fund will be prescribed by law. Until such regulations are established the funds will be administered by the King. SECTION 2 Every corporation which at the close of the fiscal year ending in 1937 had a share capital or net assets of at least Kr.100,000, or which will acquire such capital or net assets at the end of a later fiscal year, shall be obliged to make payment toward the Workmen's Fund pursuant to the rules contained in section 3, in case they employ one or more workers. The same applies to any other company with economic objectives, as well as an individual's enterprise, when the net assets for the periods mentioned above amount to at least Kr.100,000. For an individual's enterprise the basis shall be the gross assets invested in the industry with deduction of debts incurred by reason of operation. If the share capital and net assets of the business individual's enterprise company or as mentioned in the previous section, at the end of subsequent fiscal years, fall below the fixed minimum limit, the Department may decide that the obligation to pay the tax has ceased. The King may determine that a business shall be obliged to pay the tax, even though it has a smaller share capital or net assets than stated in the first section, provided, through possession of shares or in other manner, it exerts substantial influence over a business governed by the above section, or is itself subject to important influence by such businesses. Exempted from the provisions of the first and second sections are: (a) Agriculture, forestry, and gardening and related industries; (b) Fishing and trapping other than whaling; (c) Artistic work, and professions such as those of physicians, dentists, veterinaries, apothecaries, attorneys, architects, teachers, or expert advisers; (d) Savings banks; (e) Work carried on by the State or Commune or that in which these have substantial economic interests. The King may also exempt other activity. For the purposes of this law, a worker is anyone performing work outside of his home in the service of another person. Disputes as to the applicability of this chapter to a business will be determined by the Department. Payments to the Workmen's Fund shall be made pursuant to the following rules: A. Joint Stock Companies. Joint stock companies shall make payment for the fiscal year for which the shareholders receive dividends in excess of 6 percent of the sum of the share capital at the beginning |