The Swedish Government has proposed additional measures due to the Coronavirus. In short, the proposed measures are as follows.
Deferral with payments
Deferral with payment of VAT now includes and may be granted for companies that report VAT on a yearly basis. This change is proposed to enter into force 8 April 2020, albeit with retroactive effect that will be valid from 27 December 2019.
The earlier proposed changes regarding the possibility for the Tax Agency to grant companies a deferral with payments of withheld wage tax, social security contributions and VAT are proposed to enter into force 30 March 2020 (changed from the earlier proposal of 7 April 2020).
Social security contributions
A temporary reduction of employer’s social security contributions (only the retirement pension fee of 10,21% is to be paid). Similar reductions will also apply for social security contributions for sole traders (”egenavgifter” or ”Own fees”).
The reduction is limited to 30 employees and up to SEK 25 000 of the monthly salary. The reduced fee is claimed in the PAYE tax return.
The means a reduction of up to SEK 5 300 per employee and month.
This change is proposed to enter into force 6 April 2020 and will be valid for period 1 March – 30 June. In order to avoid unnecessary reassessments and administration the Tax Agency recommends that any employer that wish to claim the reduced fee do not file the PAYE tax return until the proposed changes enter into force.
Transfer to tax allocation reserve
A temporary possibility for sole traders to set aside 100% (instead of 30%) of the taxable profits for 2019 in the tax allocation reserve. This is a possibility to get back the preliminary tax paid in 2019 to get an improved liquidity.
A transfer to tax allocation reserve means that a part of the tax (taxable profits) can be carried forward to a later financial year (up to six years). This makes it possible to set of profits of 2019 against future losses or balance the taxable profits between financial years.
These changes also apply to partners in trading partnerships (natural person), but not limited liability companies or other forms of business enterprises.
It is possible to submit a new preliminary tax return for 2019 no later than 30 June 2020 in order to receive a refund of a part, or all, of the paid preliminary taxes during 2019. Otherwise a refund will be made after a deduction has been made in the ordinary income tax return and the final tax has been calculated.
This change is proposed to enter into force during April 2020, albeit with retroactive effect that will be valid for 2019.
Central government loan guarantee
A Central government loan guarantee is proposed to make it easier for affected companies to access financing.
The state will guarantee 70% of new loans provided by banks up to SEK 75 million (per company). This means that if credit guarantee has to be redeemed, the central government will pay the guaranteed loan amount.
Enterprises can apply for a loan with a government loan guarantee by contacting a bank, which will carry out a risk assessment. Interests are set by the bank, with consideration of the loan guarantee. Respite with payments of interest are issued for the first 12 months.
The loan guarantee primarily targets small and medium-sized enterprises, but there are no formal restrictions regarding company size.
The loan guarantees should be provided as soon as possible, but no date has yet to be determined.
Discount of rental costs in vulnerable sectors
To reduce costs for companies in sectors such as durable consumer goods, restaurants, hotels and certain other sectors, a support to facilitate and speed up renegotiation of rents will be provided.
The proposal mean that the government will cover 50% of the rental reduction up to 50% of the fixed rent (albeit with a cap of 25 % of the original rent). The tenant will have to negotiate a reduction of the rent with the landlord. The landlord is then able to apply for the support and receive 50% of the rent reduction.
The support can be applied for after the fact and will apply for the period 1 April – 30 June 2020.
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