About this blog post
Account Factory handles bookkeeping, payroll and taxes for Swedish small businesses. However, many of our clients are not Swedish speakers, and communicate with us mainly in English. This blog post is a summary for our English-speaking clients (as well as anyone else interested) of the Swedish Government’s Corona support measures.
It’s not a complete description of the support measures that have been presented during the Corona crisis, but rather a brief summary we’ve done to keep primarily our clients informed. There are plenty of other blogs that write better and more in detail about these measures.
Our selection is based on what we think is interesting for our clients (i.e. very small companies). Some measures we’ve described in separate posts and we link to these below – some may still only be in Swedish, however.
We try to keep these posts as updated as we can, and we write at the top of each when they were last updated.
We sometimes include Swedish terms in parentheses, to make cross-referencing with other sources easier.
Deferred tax payments (“Anstånd med skattebetalningar”)
Companies can defer a certain number of tax payments for up to a year.
This is possible for social fees and withheld tax on payroll for up to three months during January-September 2020.
Furthermore, this is (additionally) possible for VAT payments for one of the following:
- Annual VAT: VAT for one period (year) with the normal reporting due date being between Dec 27, 2019 and January 17, 2021.
- Quarterly VAT: VAT for one period (quarter) during January-September 2020. So basically, either Q1, Q2 or Q3 2020.
- Monthly VAT: VAT for up to three periods (months) during January-September 2020. For example March, April and July 2020.
You have to declare your VAT before applying for the deferred payment. Application is done in Skatteverket’s web services. You can apply for the whole amount or part of it, and for up to a year.
The cost for the deferred tax payment is a 1,25% annual interest, and after the first six months an additional fee of 0,2% per month. Note that this is lower than the cost in the initial set of rules, as it was lowered 2020-05-28. None of these costs are tax-deductible for the company.
Central Government assumes sick pay responsibility in April-July 2020
(Update 2020-10-14: support in August-December 2020 will be according to normal rules, but with lower threshold amounts)
Employers will get support from the Central Goverment for all costs for sick pay in April-July 2020. Originally it was April and May, but a bill was passed in June to extend this to July 2020.
In October was decided that support for sick pay costs in August-December 2020 will be given according to normal rules, but with lower threshold amounts. So in brief:
- In January-March 2020 support is paid out for costs for sick pay above a certain threshold. The threshold varies depending on the size of a company’s payroll. These are the same rules that have been around for the last couple of years.
- In April-July 2020 support is paid out for all costs for sick pay.
- In August-December 2020 we’re back to the normal rules (as until March 2020), although with lower threshold amounts. In other words, employers will get reimbursed for sick pay costs above a certain level as usual, but this level is lower than normal for these months.
Employers do their payroll the same way as normal. Costs for sick pay are reported in the PAYE return (employer tax return) the same way as normal. The State will pay out compensation automatically to employers based on their PAYE returns.
This concerns sick pay paid out in the respective months, and reported to Skatteverket the following respective month around the 12th (17th in August and January). For many employers, support in e.g. April-July would mean absence in March-June.
See article at Regeringen.
Sickness benefit standard deduction temporarily discontinued
(Update 2020-10-14: this support measure has been prolonged until December 31, 2020)
This concerns the first, normally unpaid, day of a sickness period, which will be compensated for by the Central Government from March 11 through December 31, 2020.
Employers do their payroll as normal. Employees can then apply to Försäkringskassan for compensation for the first sick day. The compensation is a fixed amount of 700 kr, which from June 1, 2020 was increased to 804 kr.
Sole traders (enskilda firmor) can apply for compensation as well, at a fixed amount of 804 kr.
See article at Regeringen.
Reduced social fees in March-June 2020
For salaries paid out in March-June 2020, social fees will be reduced from the normal 31,42% to 10,21%. The reduction is done on each employee’s salary up to 25 000 SEK per month, and for up to 30 employees per month.
To get the reduced social fees, you need to check box 062 for each employee in your PAYE (employer) return.
If you get social fee reductions for research and development, this will be applied on the part of the salary above 25 000 SEK for employees who get this temporary social fee reduction.
For sole traders (enskilda firmor) and handelsbolag, social fees will be reduced from 28,97% to 10,21% on the first 100 000 SEK income in 2020. This is however handled automatically in your income tax return.
Companies that have ran into economic difficulties because of covid-19 can lower the worktime for their employees by 20%, 40%, 60% or (for Maj-June 2020) 80%. Employees keep nearly the same pay as for 100% work, which for the most part is financed by the state. This support measure is available March 16 through December 31, 2020.
There are a number of requirements and details to get acquainted with if you wish to use this support measure. You can check out our Swedish post Korttidspermittering and read the English information pages at Tillväxtverket, the agency responsible for this support measure.
Defer up to 100% of income in periodiseringsfond
Sole traders (enskilda firmor) and owners in handelsbolag can defer up to 100% of their business profit in 2019 through the so called “periodiseringsfond”. Normal cap is 30% of your profit.
Other than the increased cap, the periodiseringsfond works as normal, i.e. it has to be brought back for taxation no later than six years after the original income year.
This possibility can be a valuable tool. It is however not always a good idea to defer all of your income in a year. It can for example make your tax so low that you need to pay back ROT and RUT deductions. And deferred income sooner or later needs to be taxed – if this is done in a high income year, it may get expensive. So always make an informed decision of your optimal strategy for your tax return.
No penalty fees in March and April 2020
For tax returns normally due between March 12 and August 31, 2020, Skatteverket will not charge penalty fees for late tax returns, provided they are submitted no more than a month after their original due date. This concerns e.g. VAT returns, PAYE returns and EU sales reports. Note however that the high interest rate (16,25%) will be charged after the original due date, as it normally is.
Reorientation support to companies
(Updated 2020-10-20: support extended to May-July 2020)
For companies that due to Covid-19 suffered a loss of turnover of at least 30% during March-April 2020 (compared to March-April 2019), there is a possibility to apply for a turnover-based “reorientation support”. This support is available for companies with a turnover of at least 250 000 SEK in their last financial year, that are approved for F-tax, and that do not have debts with Kronofogdemyndigheten or are in default. For support amounts of 100 000 SEK or more, a statement from an auditor is needed. Applications have to be submitted by September 1, 2020.
In October 2020 this support was extended to include also May-July 2020. Companies need to show a loss of turnover of 40% in May and 50% in June-July, compared with the samt time period 2019, to qualify for this support. Applications can be submitted starting now and until November 30, 2020.
Read more at Skatteverket.
Turnover-based support to sole traders (enskilda firmor)
(Added 2020-09-29, updated 2020-10-06)
Many sole traders have been hit hard financially by the pandemic, and have had difficulties using some of the earlier support measures, such as the reorientation support (omställningsstöd) or the short-term work allowance (korttidspermittering). Therefore the Government proposed on September 9, 2020 a turnover-based support directed specifically towards sole traders.
The support measure concerns large lossed in turnover during March-July 2020, and is given with up to 75% of the loss of turnover. Maximal amounts are 48 000 SEK for March-April, 24 000 SEK for May and 48 000 SEK for June-July.
A requirement for the support is a loss of turnover (compared to the same time period in 2019) of at least 30% in March-April, at least 40% in May and at least 50% in June-July. You also need to have had a turnover of at least 200 000 SEK during 2019.
According to an updated proposal by the Government on 2020-10-01, these rules will come into effect on 2020-10-29 and applications must be submitted by 2021-01-31.
However, this is still only a proposal, you can’t apply for the support yet and we don’t know more details until it has been passed and/or more information is given.
Read more at Regeringen och Verksamt.se.
Tax-free parking spaces and gifts up to 1000 kr for employees
Parliament just passed a law that temporarily allows employers to pay for parking spaces by the workplace for employees as a tax-free benefit, as well as tax-free gifts to employees of a value of up to 1000 kr.
Normally, if an employer offers an employee a parking space by the workplace free of charge, this is a taxed benefit. However, during April-December 2020 this can be done tax-free. The idea is to make it easier for employers to facilitate for their staff to avoid public transportation when going to and from work.
Employers can normally offer their employees tax-free gifts only in a few circumstances, e.g. of a value of up to 450 kr at Christmas. During June-December 2020 employers can now offer their employees a tax-free gift of up to 1000 kr (incl VAT).
We haven’t seen anything explicitly written about this, but we’re assuming this can be done once per employee during this time period, that it works for all employees including those with their own aktiebolags, but that business owners with enskilda firma (sole traders) and handelsbolag are not included.
Corona tests tax-free
Skatteverket has issued a statement that employers can pay for Corona tests for their employees as a tax-free benefit. This regards tests to see whether someone has or has had Covid-19.
As usual they don’t mention enskilda firmor (sole traders) or handelsbolag, but as Skatteverket sees this as part of a company’s ongoing, preventive health care work (“företagshälsovård”), these tests should be tax-deductible even for these groups.