The Government’s crisis package for Swedish companies and jobs
The proposed measures of an agreement between the Social Democrats, the Center Party, the Liberals and the Green Party. The proposal is therewith assessed to be able to be adopted by the Parliament within short and is included in the additional amending budget to be decided by the Government on March 19 and subsequently submitted to the Parliament.
The main features of the proposal are described below.
Deferment of payment of employer contributions, preliminary tax on salary and value added tax
One of the proposals implies that companies should be able to defer tax payments for a limited period in order to boost companies’ liquidity.
- Deferred payment includes employer contributions, preliminary tax on salary and value added tax that are reported monthly or quarterly.
- Deferred payment covers a maximum of three months’ tax payments during the time period January to September 2020.
- Deferred payment is granted for a maximum of 12 months.
- Deferral is granted after application to The Swedish Tax Authorities.
- Deferral should be granted unless special reasons so warrant. The Swedish Tax Authorities must, thus, test each case individually to determine whether deferral should be granted.
- Deferral will, however, not be granted to companies that mismanage their finances or are otherwise rogue. Deferral will not be granted to companies with major tax debts.
- Interest of the current 1,25 percent equivalent to a base interest rate and a deferral fee of 0,3 percent per commenced calendar month will be charged for granted deferred amounts.
- The new rules are proposed to apply on April 7, 2020, but can be applied retroactively from January 1, 2020. This means that companies that have paid taxes to their tax accounts in February and March may receive tax refunds from The Swedish Tax Authorities.
Costs for short-term lay offs
Another of the proposals means that employers’ salary costs can be reduced by half by the state bearing responsibility for a larger cost for short-term lay-offs.
- The state is proposed to pay for three-quarters of the total cost for reducing personnel working hours by 20, 40 or 60 percent.
- Employees that reduce their working hours receive over 90 percent of their salary. The employer must subsequently request financial support from the state.
- The employer’s labour costs can be reduced by up to 50 percent for personnel who reduce their working hours.
- Employers that are legal entities or who are natural persons and conduct business activity are included.
- Aid will, however, not be granted to companies who mismanage their finances or are otherwise rogue. Support will also not be granted to companies with major tax debts.
- Aid will be granted after application to the Swedish Tax Authorities. Such application must have been received by the Swedish Tax Authorities within two calendar months from the end of the month for aid. There is also an option to file an application for aid consent by the Swedish Agency for Economic and Regional Growth
- Please note that the state aid requires that the employer has financial difficulties that are temporary and serious. The introduction of reduced working hours will also require e.g. agreement by collective bargaining agreement or individual written agreement with at least 70% of the employees concerned. There are also many additional formal requirements that must be fulfilled.
- The rules are proposed to apply during 2020, i.e. up to and including December 31, 2020.
- The new rules are proposed to start on April 7, 2020, but can be applied retroactively from March 16, 2020.
The state assumes sick pay liability for two months
A third proposal means that the state is proposed to temporarily assume the entire costs for all sick pay for April and May.
Self-employed persons are also compensated by receiving standardized sickness benefit for days 1-14.
Proposal for removal of waiting period deduction
The benefit deduction will be set aside between March 11 and May 31 by the state paying sick pay for the first day of sickness.
- The measure means that the employee may subsequently apply for compensation for the first day of sick leave from the state.
- The application is made retroactively to the Social Insurance Office (sw. Försäkringskassan).
Employers shall make a benefit deduction as usual.