(Updated 2023-02-17, section Deferred tax payments)
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 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 it easier to cross-reference with other sources.
Deferred tax payments (“Anstånd med skattebetalningar”)
(Updated 2023-02-17, more tax periods and extended time periods)
Companies can defer a certain number of tax payments for up to two years.
This is possible for social fees and withheld tax on payroll for up to twelve months during January 2020 – January 2021, October – December 2021 and April-June 2022.
Furthermore, this is (additionally) possible for VAT payments for one of the following:
- Annual VAT: VAT for up to two periods (years) with the normal reporting due date being between December 27, 2019 and January 17, 2023.
- Quarterly VAT: VAT for up to four periods (quarters) during January – December 2020, October – December 2021 and April-June 2022.
- Monthly VAT: VAT for up to twelve periods (months) during January 2020 – January 2021, October – December 2021 and April-June 2022. For example March, April and July 2020.
You have to declare your VAT and/or tax+social fees 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. After the year has passed you have the possibility to prolong another year. In February 2022 the possibility was introduced to apply for further extensions of up to three more years.
One part of the cost for the deferred tax payment is the normal “low interest rate” on your tax account. It has long been at the minimum 1,25%, but has in 2022 and 2023 been raised to 3,75% as of today (February 2023). Additionally, for applications approved up until February 4, 2021, an additional fee of 0,2% per month is added after the first six months. For applications approved after February 5, 2021, the fee is charged from the first month but is only 0,1% per month.
None of these costs are tax-deductible for the company.
More information in our blog post Tillfälligt anstånd med skattebetalningar (in Swedish) and at Skatteverket (in English).
Central Government assumes sick pay responsibility
Since a couple of years back, employers have received support from the state for sick pay costs above a certain level. For example, for employers with annual payroll costs of up to 3 MSEK, the state has on a yearly basis reimbursed all sick pay costs above 0,5% of total payroll costs. By sick pay costs and payroll costs we here mean salary and social fees.
During the Corona crisis, this support has been expanded. During April-July 2020 employers have been reimbursed for all sick pay costs. And during August 2020-September 2021, employers are reimbursed according to normal rules, but with lower thresholds. For example, employers with payroll costs of up to 250 KSEK per month are reimbursed on a monthly basis for any sick pay costs above 0,35% of total payroll costs. During the Corona crisis support is paid out monthly instead of yearly. After September 2021 it’s back to the old rules again. Buuuut only for two months, then between December 2021 and March 2022 we went back to the same rules as September 2021 and before.
Employers do their payroll the same way as before. Costs for sick pay are reported in the PAYE return (employer tax return) the same way as before. 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 sick leave in March-June.
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 from March 11, 2020 through September 30, 2021, as well as from December 8, 2021 through March 31, 2022. The decision for the latter time period was passed in early February 2022 and applications can be made retroactively back to December 8, 2021.
Employers do their payroll as normal. Employees can then apply to Försäkringskassan for compensation for the first sick day. The compensation was a fixed amount of 700 kr until May 31, 2020, was increased to 804 kr between June and December 2020, and was increased to 810 kr from January 2021.
Sole traders (enskilda firmor) can apply for compensation as well, at a fixed amount of 804 kr in 2020 and 810 kr in 2021.
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 run into economic difficulties because of covid-19 can lower the worktime for their employees by 20%, 40%, 60% or 80%. Employees keep nearly the same pay as for 100% work, which for the most part is financed by the state. This temporary support measure is available from March 16, 2020 to September 30, 2021.
After September 2021 there is a permanent set of regulations for short-term work-allowance, with slightly different rules and threshold amounts. More information (in Swedish) at Tillväxtverket.
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-May 2020
For tax returns normally due between March 12 and May 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
For companies that due to Covid-19 have suffered a large loss of turnover compared to the same period the previous year, 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.
Support is given for individual months or groups of months during March 2020 – September 2021 and December 2021 – February 2022. The details vary for different months, such as how months are grouped, how much turnover has to have been lost, how much of costs are reimbursed, how numbers are calculated and when applications need to be submitted. If you’re interested in applying for this support, please read up on the current rules at Skatteverket.
Note that companies that receive the reorientation support cannot pay out dividends during April 2020-December 2021.
Turnover-based support to sole traders (enskilda firmor)
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 our Government decided on November 5, 2020 on a turnover-based support directed specifically towards sole traders.
The support measure concerns large losses of turnover during March 2020 – September 2021 and December 2021 – February 2022, and is given with up to 75-90% of the loss of turnover (depending on the month).
A requirement for the support is a loss of turnover, compared to the same time period the previous year, of at least 30-40% (depending on the month). The loss of turnover needs to be pretty much only caused by the spreading of covid-19. You also need to have had a turnover of at least 200 000 SEK during 2019 and be approved for F-tax.
The details vary for different months, such as how much turnover has to have been lost, how much is reimbursed and when applications need to be submitted. If you’re interested in applying for this support, please read up on the current rules at Länsstyrelsen in Östergötland.
Applications are submitted through Boverket’s web service, decisions are made by the County Administrative Boards (Länstyrelser) and the support is paid out by Boverket.
Read more at Verksamt.se, Boverket and Länsstyrelsen in Östergötland (that coordinates the support) (all links in Swedish).
Tax-free parking spaces and tax-free gifts for employees
Normally, if an employer offers an employee a parking space by the workplace free of charge, this is a taxed benefit. However, from April 2020 through June 2022 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 give their employees tax-free gifts only in a few circumstances, e.g. of a value of up to 500 kr at Christmas (450 kr until 2020). During June-December 2020 employers can now offer their employees a tax-free gift of up to 1000 kr (incl VAT), and during all of 2021 a gift of up to 2000 kr (incl VAT).
You can combine several gifts up to a total value of 2000 kr (example for 2021). You can combine this gift with e.g. a Christmas gift, and during 2021 e.g. give a Christmas gift with a value of up to 2500 kr.
If a “Corona gift” has a value that exceeds the tax-free amount, the recipient is only taxes for the exceeding amount. So a gift worth 2300 kr (2021) is taxed only for the exceeding 300 kr. While Christmas gifts are taxed for the whole value if their value exceeds 500 kr.
This works for all employees including owners of aktiebolags, but we have to assume that business owners with enskilda firma (sole traders) and handelsbolag are not included.
Note that the gift has to be paid by the employer. The employee cannot buy the gift themselves and get reimbursed by the employer as an expense.
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.
Tax Reduction for Investments in Equipment
Parliament has passed a law for a temporary tax reduction for companies’ investments in equipment (inventarier), in order to incentivise companies to make investments now rather than later. The tax reduction is 3,9% of the equipment’s purchase value and it is available to all kinds of companies with business activities (sole traders, limited companies etc). It is based on physical equipment purchased during 2021 and that are depreciated over multiple years. So no “short-time equipment” (korttidsinventarier) or “equipment of lesser value” (inventarier av lägre värde), that are typically put in the income statement directly. The tax reduction is requested in the income tax return for the income year that ends on December 31, 2022 or later. Only equipment that is still in the company on December 31, 2022 is eligible for this tax reduction. Tax reductions that can’t be used in the first possible year, e.g. due to income tax being too low, can be saved to the following year.
There are a number of additional limitations, so make sure to read up on the rules before applying them.
Temporary Tax Reduction for Individuals
Parliament has passed a law for a temporary tax reduction for individuals in 2021 and 2022, as a support for increased working costs during the pandemic. The tax reduction is for individuals with an annual income of between 60 000 kr and 500 000 kr. Like other tax reductions, it is automatically deducted from your income tax and most probably there is nothing you have to manually do in order to get this tax reduction.