Sweden

Tax and financial measures associated with COVID-19

24 April 2020

Across Sweden, all businesses, such as shops and restaurants are still open but with a lot less crowds. Therefore, these types of businesses, together with those in the travel industries, struggle. The government has released a package of relief which has been sent to the Swedish banks but as of today no further loans have been approved, as was intended.

Social security measures

From March to June the payroll tax is lowered from 31,42 % to 10,21 %. This is valid up to a gross wage of 25 000 SEK (above this there is still 31,42 % payroll tax)

Employee and employer supportive measures

For the Employer:
Short-term working means that employers can reduce their employees’ working hours and receive financial support from the central government to compensate for a significant part of the costs for retaining the employee. Please be advised that this form of financial support has not existed previously, so it may take time to get everything set up to make it available.

From 7 April, it is possible to apply for the financial support, however it will be retroactively applied to as early as 16 March. All applications received prior to 7 April will be disregarded. The short-term work allowance programme will remain in effect throughout 2020.

Companies that can show temporary and serious financial difficulties in coping with the challenges that have arisen in the wake of the COVID-19 pandemic. Thus, the difficulties must have been caused a relationship outside of the employer’s control and specifically negatively impacting the company’s business operations. All employers, except for certain governmental entities, may receive support in the event of short-term work if the requirements for the support are fulfilled.

In addition:

  • Sickness is deducted as before with salary deductions, sickness deductions and sick pay
  • Medical certificates need only be submitted after day 21. Valid March 13 – until further notice
  • Sickness costs are paid for by the state. Valid April 1 – May 31. Refunds will be made via deposit into your tax account.

For the Employee:

  • The support does not cover new employees, but rather only employees who were receiving wages three months prior to Tillvaxtverket’s, the Swedish Agency for Economic and Regional Growth’s approval for support.
  • The support applies to employees for whom the employer has been obligated to pay employer’s social insurance contributions during the month the support is received
  • Employees belonging to the employer’s family are not eligible under Section 11 of the Swedish Act (2013:948) on Support Related to Short-Time Working (Lagen om Korttidsarbete). Tillvaxtverket has made an interpretation in this regard that the only employers who can be considered to have a “family” in the context of the law are sole proprietorships/self-employed persons, due to that only these are natural persons. This is a broad interpretation against the background of the purpose and intention with the new short-time working allowance system and the very exceptional situation that now prevails. The interpretation means that employed owners and employees belonging to their family may also be encompassed within the system, with the exception of the sole proprietorship form of company. (However if a sole proprietorship has any employees other than the owner, these employees are encompassed within the short-time work allowance programme.) That the other criteria for support are fulfilled remains a prerequisite for receiving the financial support.

This financial support for short-time working is based on the Swedish Act on Support Related to Short-Time Working (Lagen om Korttidsarbete), which encompasses companies with employees. All these business enterprises are critically important to Swedish trade and industry. Tillvaxtverket are investigating and preparing information about how it is affecting Swedish business and industry, and are engaged in a dialogue with their mandator, the Government of Sweden, proposing measures to mitigate the difficult circumstances for all companies and business owners that are suffering financial consequences from the coronavirus pandemic.

Additional employee measures include:

  • The sick deduction day 1 is cancelled. Valid March 11 – May 31.
  • A medical certificate is required only after 21 days. Valid March 13 – until further notice
  • Compensation for the deduction day 1 is applied to the Swedish Social Insurance Agency and is also retroactive. Notification of remuneration takes place via the My Pages e-services when the decision is formally made.
  • Sickness is reported to the Employer as before.

Business support

The landlords may lower their rents to companies with up to 50 % and the government will repay 25 % of the rent (so the landlord gets 50 % less in rent but government covers 25 % of this). However, this is voluntarily so the landlords are not forced to accept this.

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