Tax and financial measures associated with COVID-19
21 April 2020
The Finnish Government activated the Emergency Powers Act and announced several measures to support companies and its citizens affected by the COVID-19 pandemic.
It’s possible to agree on payment arrangements flexibly (up to 21 payment instalments) with the Finnish tax administration. They have lowered their interest rate from 7% to 4% and if you have completed your tax declarations on time and you have no tax debt, you will be able to make a payment arrangement.
Support for employers and employees
Temporary lay-offs are possible on the same grounds as usual: the employer’s possibility to offer work has temporarily decreased and there is no other work or necessary training available to the employees (maximum lay-off period 90 days). The employer can also lay off employees for a longer period of time, when the company has grounds to permanently reduce workforce. Employee consultations are usually necessary, if the company employs at least 20 employees. Under new temporary COVID-19 legislation, the process takes 15 days, including the lay-off notification period. Please remember to check the applicable collective bargaining agreement – collective bargaining agreements contain provisions on the consultation and lay-off notification periods that may be different from the legislation. It is also possible to delay mandatory pension contributions by three months.
The Government has agreed on a comprehensive package to safeguard jobs and livelihoods. According to the Government’s estimate, the overall scale of the measures will be approximately EUR 15 billion. For those employees that have been furloughed, it is still possible to receive unemployment benefits from the state.
The Finnish government has promised direct support of €1 billion for Finnish businesses during the coronavirus crisis. Of this, €700 million is aimed at assistance awarded by Business Finland and €300 million at assistance awarded by the ELY centres (Centres for Economic Development, Transport and the Environment). To receive any of these forms of support, a business must be in good standing and viable.
- Subsidies are available for companies of all sizes
- The state guarantees the loans up to 80%
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