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
Employers will get support from the Central Goverment for all sick pay costs in April-July 2020. Originally it was April and May, but a bill was passed in June to extend this to July 2020.
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 April-July, reported to Skatteverket the following respective month around the 12th (17th in August). For many employers this means absence in March-June.
See article at Regeringen.
Sickness benefit standard deduction temporarily discontinued
This concerns the first, normally unpaid, day of a sickness period, which will be compensated for by the Central Government.
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.
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.
This text is not quite done yet.
In the meantime, you may check out the 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 April 30, 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.
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.