COVID-19-related information for companies, associations and public-sector organisations
On this page, we have gathered COVID-19-related information that is relevant to you as a company, association or public-sector organisation.
Proposal for a temporary law on tax reductions for inventory investments
Under this proposal, individuals and legal entities with income from a business will be entitled to a tax reduction on purchases of tangible inventory. The proposed reduction is 3.9% of the purchase value of inventory acquired between 1 January and 31 December 2021. Certain additional conditions must be fulfilled in order for a business to qualify for the tax reduction. For example, the inventory must have been held for a certain period of time, and the purchase expense must be deducted annually as depreciation. Specific rules have been proposed regarding acquisition transactions between associated enterprises or persons.
If the Riksdag agrees the proposal, it will be possible for businesses to claim the reduction in their income tax return for the tax year ending on 31 December 2022. Alternatively, if their tax year does not end on 31 December 2022, the claim can be made in the return for the first tax year after that date. This reduction will be applied after all other existing tax reductions, and will be offset against state and municipal income tax, municipal property charges and state property tax.
If the tax reduction cannot be fully applied during the first tax year, it may be applied during the following tax year if tax is due that is eligible for the reduction.
The Riksdag is expected to make a decision during the fourth quarter of 2021, and this information will then be updated accordingly.
Information from the Swedish Government on the proposal to introduce a tax reduction for investments in inventory acquired during the calendar year 2021.
There are several ways to improve your financial situation, and we will guide you through the various options. Here you will also find information that is relevant if you have difficulty paying taxes or other charges on time. Please note that, since the rules vary for different types of organisations, this information is divided into separate sections addressing the following groups:
- sole traders and joint owners in partnerships
- limited companies, economic associations and tenant-owner associations
- non-profit organisations, foundations and registered religious organisations
- public-sector organisations
Please ensure that you read the information that is relevant to your organisation.
Sole traders and joint owners in partnerships
Here, we outline several examples of situations that apply to sole traders and joint owners in partnerships.
When to declare reorientation support in your tax return
Taxable business subsidy
Reorientation support is a business subsidy, in accordance with the definition used in chapter 29 of the Income Tax Act. The basis is that the company’s turnover is taxable and the fixed costs covered by the subsidy are tax deductible. In most cases, the allowance received must therefore be included in income taxation.
The time point when the allowance should be declared in the income tax return is specifically regulated in the legislation on reorientation support. Taxable reorientation support should be declared in full in the tax return for the tax year in which you were granted the subsidy. If the reorientation support relates to costs incurred in the previous tax year, you can instead choose to declare the part of the allowance relating to those costs in your tax return for the year in which they were incurred. This is to enable you to align the allowance received with the costs incurred.
How to declare your reorientation support allowance
You must book reorientation support as “other operating income”. This means that you must enter the allowance in box R1 or R2 of your NE annexe. As a rule: for a VAT-liable operation, revenue should be entered in box R1; and for a VAT-exempt operation, revenue should be entered in box R2. If you run an VAT-liable operation and wish to be able to reconcile the amounts entered in your VAT return with the NE annexe for your own accounting purposes, you can enter your allowance amount in box R2.
When reorientation support is granted to a partnership, the allowance must be entered in box 3.4 of Income Tax Return 4.
If the allowance has been entered in the accounts as revenue for the year in which reorientation support was granted, but you would like it to be taxed as income for the year in which you incurred the losses or costs it covers, you should make a tax adjustment in your income tax return. This is to ensure that your final tax is calculated correctly.
You make the necessary tax adjustment and enter the figure in box R14 “Booked revenue not to be recognised” (“Bokförda intäkter som inte ska tas upp”) or box R15 “Unbooked revenue to be recognised” (“Intäkter som inte bokförts men som ska tas upp”) of your NE annexe.
You make the tax adjustment for a partnership by entering the figure in box 4.5b “Booked revenue not to be recognised” (“Bokförda intäkter som inte ska tas upp”) or box 4.6c “Revenue to be recognised but which is not included in the declared results” (“Intäkter som ska tas upp men som inte ingår i det redovisade resultatet”) in Income Tax Return 4.
Repayment
If you have repaid all or part of a taxable business subsidy, you should claim tax relief for the repaid amount. You claim this in your tax return for the year in which you made the repayment.
If you have been notified that you must repay all or part of a subsidy, and you have entered this amount as a cost in your accounts but have not repaid the sum at the end of the tax year, you should make a tax adjustment to obtain the correct result for tax purposes.
The Swedish Tax Agency will not investigate the date of a deduction for repayment of a business subsidy in the income tax return for tax years ending during the period 1 March 2020 to 31 August 2022.
Examples of repayment of reorientation support
Anna is a sole trader who received a reorientation support allowance of SEK 200,000 in November 2020. This amount was granted for the May 2020 allowance period. Anna’s company’s reorientation support is therefore recorded as “other operating income” in its annual accounts for the financial year 1 January to 31 December 2020, in accordance with good accounting practice.
A few weeks after her company’s annual accounts had been finalised, Anna realised that in her application for reorientation support, the rental cost she had stated for her premises was too high. She reported the mistake to the Swedish Tax Agency and received a decision notification in April 2021 stating that she had to pay back SEK 5,000, which she did immediately.
In her bookkeeping, Anna entered the repayment as a cost in the income statement. When Anna fills in her NE annexe for the 2020 tax year, she will enter her allowance of SEK 200,000 in box R1 since she runs a VAT-liable operation. In Anna’s income tax return for the 2021 tax year, the repayment she made in April 2021 will be included in box R6, which is for other external costs.
When should details of other COVID-19 allowances be included in your income tax return?
Business subsidies
If you have received support for your business from, for example, the EU, the Swedish state, or a Swedish region or municipality, this counts as a business subsidy according to section 29 of the Swedish Income Tax Act. Whether or not you have to declare your subsidy as taxable income in your tax return depends on the purpose for which the subsidy was granted.
If you have received a conditional subsidy, you should enter it in your tax return as income and pay tax on it if the subsidy is to support your business activities. The same applies to any financial support to compensate for lost revenue and additional costs since such subsidies normally replace taxable income and deductible expenses.
Examples of grants and subsidies provided by government authorities include the following:
- emergency support for cancelled and postponed events provided by the Swedish Arts Council (“Kulturrådet”)
- short-time work allowance from the Swedish Agency for Economic and Regional Growth (“Tillväxtverket”)
- compensation for high sick pay costs from the Swedish Social Insurance Agency (“Försäkringskassan”)
- turnover-based support from the Swedish National Board of Housing, Building and Planning (“Boverket”), based on decisions made by the various County Administrative Boards (“Länsstyrelserna”)
A business subsidy or allowance may be tax exempt if all of the following apply:
- it is provided for economic security in terms of livelihoods
- it does not bestow any reciprocal obligations
- it is not paid out periodically
Examples of this kind of support include grants and stipends given by the Swedish Arts Grants Committee (“Konstnärsnämnden”) and the Swedish Authors’ Fund (“Sveriges Författarfond”).
How to declare taxable public grants
Taxable public-sector grants awarded to cover operating expenses or to compensate for lost revenue should be declared as “other operating income”. This means that you must enter the allowance in box R1 or R2 of your NE annexe. For a VAT-liable operation, revenue should be entered in box R1; and for a VAT-exempt operation, revenue should be entered in box R2. If you run an VAT-liable operation and wish to be able to reconcile the amounts entered in your VAT return with the NE annexe for your own accounting purposes, you can enter your allowance amount in box R2.
If you are an owner in a partnership, you must declare your allowance as “other operating income” and enter the relevant amount in box 3.4 of Income Tax Return 4.
As a rule, good accounting practice will determine when you should be taxed for a business subsidy. If you have received a subsidy to cover an expense that you incurred during the previous tax year – an allowance for which you need to claim a deduction immediately – it is possible to claim the deduction for this expense in your income tax return for the year in which you are taxed on the subsidy. This allows you to match your expense with your revenue. You can then adjust the tax figures in your NE annexe or in Income Tax Return 4.
Unlike other subsidies, turnover-based support from the Swedish National Board of Housing, Building and Planning (“Boverket”) (which is based on decisions made by the various County Administrative Boards,“Länsstyrelserna”) is not designed to cover any specific expenses. Nor is it intended for the acquisition of any specific assets. There is no particular tax rule governing when turnover-based support must be declared. This means that the general rules of good accounting practice will determine when you should declare your turnover-based support. It is not possible to deviate from a booked entry made in accordance with good accounting practice; in other words, no tax adjustment should be made.
- Business subsidies (in Swedish)
- Bokföringsnämnden: Booking different COVID-19 allowances (in Swedish)
External link, opens in new window. - Legal guidance: Time point for taxation
External link. (in Swedish) External link.
Example
Johan is a sole trader, and he applied for turnover-based support for the March to April 2020 allowance period. He was granted an allowance in January 2021 and received a payment from the Swedish National Board of Housing, Building and Planning (“Boverket”). According to the Swedish Accounting Standards Board, since he applies the “K1 framework”, he could choose to declare his allowance as revenue in either his simplified 2020 annual financial report – which he prepared in February 2021 – or in his annual accounts for 2021, which he will draw up in 2022.
Both options are in line with good accounting practice, and Johan should therefore fill in his NE annexe according to his chosen option. He should not make a tax adjustment in connection with his turnover-based support.
Repayment
If you have repaid all or part of a taxable business subsidy, you should claim a tax deduction for the amount repaid.
In the case of repayment of a business subsidy to cover expenses, good accounting practice does not determine the time point for taxation. You claim the deduction in your tax return for the year during which you made the repayment. If you have been notified that you must repay all or part of a subsidy, and you have entered this amount as a cost in your accounts but have not repaid the sum at the end of the tax year, you should make a tax adjustment to obtain the correct result for tax purposes.
The Swedish Tax Agency will not investigate the date of a deduction for repayment of a business subsidy in the income tax return for tax years ending during the period 1 March 2020 to 31 August 2022.
There is no specific tax rule governing when a deduction for repayment of turnover-based support should be claimed. This means that the general rules of good accounting practice will determine when you should claim the deduction. It is not possible to deviate from a booked entry made in accordance with good accounting practice; in other words, no tax adjustment should be made.
Example of repayment
Simon is a sole trader. He received a turnover-based support allowance of SEK 40,000 in December 2020, which was granted for the May 2020 allowance period. Simon’s company’s reorientation support is therefore entered as “other operating income” in its annual accounts for the financial year 1 January to 31 December, in accordance with good accounting practice.
A few weeks after his company’s annual accounts had been finalised, Simon realised that the details he had provided in his application for reorientation support were incorrect. Once he had provided the correct details, Simon had to pay back SEK 15,000 to the Swedish Tax Agency in April 2021. He booked this repayment in his accounting records as a cost in his income statement. When Simon fills in his NE annexe for the 2020 tax year, he will enter his allowance of SEK 40,000 in box R2 since he runs a VAT-exempt operation. Simon made the repayment in April 2021. In his income tax return for 2021, he will enter SEK 15,000 in box R6, which is for other external costs.
Do you have employees?
There are several forms of financial support to cover staff costs.
Tax on benefits
Parking
The temporary tax exemption relating to free parking at work has been reintroduced and will apply until 31 December 2021.
- Swedish parliament: parking (in Swedish) External link, opens in new window.
- Parking and garage space (in Swedish)
Gifts
The temporary tax exemption for gifts to employees has been reintroduced and will apply until 31 December 2021. The tax-free value of gifts is SEK 2,000 including VAT per employee.
- Swedish parliament: gifts (in Swedish) External link.
- Christmas presents and other gifts to employees (in Swedish)
Testing for COVID-19
As an employer, you can pay for your employees to be tested to check whether they currently have or have previously been affected by a disease classified as a danger to the general public under the Swedish Communicable Diseases Act. COVID-19 is such a disease. This is a tax-exempt employee benefit; testing is considered to be a form of preventive occupational health care.
Taxi journeys
Taxi journeys and similar travel benefits to employees in order to reduce the risk of infection during the COVID-19 pandemic should be valued at the equivalent cost of public transport. This valuation applies from March 2020, for as long as the Public Health Agency of Sweden (Folkhälsomyndigheten) recommends restrictions to reduce the spread of infection in public transport.
Internal business entertainment
As an employer, in order to pay for a meal for your employees without them becoming liable to pay tax on it, the meal must count as internal business entertainment. It can only do so if the meal is eaten by employees at the same time in a space designated by the employer. So if you pay for a meal or any other food for your employees in any other way – for example, by having food delivered to those working from home – this will be considered a taxable benefit.
Meals provided by others to your employees
If your employees have received free meals from any party other than you as their employer – and there are no reciprocal obligations – they are not required to pay tax on them. Meals may, for example, be provided by the public as a means of showing appreciation. Such meals are tax-free – even if they have been provided to you as an employer and you distribute them among your employees. These regulations came into force on 1 January 2021, but they apply from 1 March 2020.
Face masks
Face masks provided to employees to limit the risk of COVID-19 infection at work, and during travel to and from work, are not taxable employee benefits. The provision of face masks in such situations may be regarded as a measure taken by an employer to ensure a safe work environment, and to prevent employees from experiencing health problems in the workplace and in connection with travel to and from the workplace.
Lowered employer contributions for young people
The Riksdag has decided to reduce employer contributions for young people who were between 18 and 22 years old at the start of the year.
The new rules mean that you will pay reduced employer contributions in 2021 for employees born between 1998 and 2002. The law came into force on 1 January 2021, and it applies to compensation for work that was paid after 31 December 2020.
This law will apply for a limited period, up to and including 31 Mars 2023.
The Swedish Tax Agency will calculate employer contributions automatically when you file your PAYE return.
Further reduction in employer contributions for June to August 2021 for those aged between 19 and 23.
The Riksdag has decided on a temporary reduction in employer contributions for persons born between 1998 and 2002. For compensation up to SEK 25,000 per month, the employer contribution rate is 10.21% for payments made during June, July and August 2021. For the part of the compensation that exceeds SEK 25,000, the full employer contribution rate applies: 31.42%.
The rules came into force on 19 June. If you filed your PAYE return for June before this date, you must request a review in order to benefit from the reduced rate. The PAYE return for the month of June must be filed by 12 July 2021.
Temporary extra reduction of employer contributions for young people between June and August 2021
The Riksdag has decided on a temporary reduction in employer contributions for persons born between 1998 and 2002. For compensation up to SEK 25,000 per month, the employer contribution rate is 10.21% for payments made during June, July and August 2021. For the part of the compensation that exceeds SEK 25,000, the full employer contribution rate applies: 31.42%.
The rules came into force on 19 June. If you filed your PAYE return for June before this date, you must request a review in order to benefit from the reduced rate. The PAYE return for the month of June must be filed by 12 July 2021.
This applies for temporarily lowered employer contributions
Percentage | Day/month of payment |
19.73 | Up to 31 May 2021, then from 1 September 2021 to 31 March 2023 |
10.21 | 1 June to 31 August 2021 |
Example:
The company Jordgubbsförsäljning AB employs 21-year-old Kim to work during the period 1 June to 31 August 2021. Kim has a monthly salary of SEK 21000 before tax. Jordgubbsförsäljning AB pays the salary in arrears, which means that Kim receives salary payments in July, August and September. For the salaries paid in July and August, the company pays 10.21% in employer's contribution. For the salary paid in September, the company pays 19.73% in employer's contribution.
Short-time work allowance (Swedish Agency for Economic and Regional Growth; “Tillväxtverket”)
Short-time work allowance (often referred to as furlough, or as “permittering” in Swedish) means that employers can reduce employees’ working hours and receive state aid to cover a large parts of the cost of salaries. You apply to the Swedish Agency for Economic and Regional Growth for this allowance. You declare the compensation you have paid to employees in your PAYE tax return. You can print out supporting documents for your application from “My pages” (“Mina sidor”) on our website, skatteverket.se.
- Swedish Agency for Economic and Regional Growth: short-time work allowance (in Swedish) External link.
- Print out the documentation required for the short-time work allowance application (in Swedish)
Applying for short-time work allowance does not affect your right to reduced employer contributions
Example: calculating employer contributions in connection with short-time work allowance
The engineering firm Elmontering has agreed with its employees that their working hours will be reduced by 60%. According to the short-time work allowance rules, the government will cover 45% of salary costs and employees’ compensation will be reduced by 7.5%.
Karl, one of Elmontering’s electricians, usually earns SEK 30,000 per month.
His new monthly salary will be SEK 27,750 when his working hours are reduced (SEK 30,000 minus 7.5% of SEK 30,000). Elmontering must calculate and pay its employer contributions based on the gross salary of SEK 27,750 paid.
The engineering firm declares Karl’s new gross salary of SEK 27,750 in its PAYE tax return. SEK 27,750 will also be the basis for Karl’s pensionable earnings.
Compensation for companies from the Swedish Social Insurance Agency due to high sick pay costs
Protection against high sick pay costs is available for all employers in Sweden. This means that employers can receive compensation for sick pay costs if these are particularly high. The Swedish Government decided that all employers would be entitled to compensation for their entire sick pay costs for the April to July 2020 period. For the August 2020 to September 2021 period, compensation is not paid for all sick pay costs, although these are covered to a greater extent than normal. For more information about how much compensation you can receive as an employer, please contact the Swedish Social Insurance Agency (“Försäkringskassan”).
You do not need to make a special application for compensation. Declare the compensation you receive for sick pay costs in your PAYE return. The Swedish Tax Agency will forward details of your sick pay costs to the Swedish Social Insurance Agency which will then pay any compensation due into your tax account. Compensation for high sick pay costs is normally paid once a year (in March), but it was paid on a monthly basis during the April 2021 to September 2021 period. If you have no liabilities to offset against this payment, and you would like compensation to be paid to you, the easiest way to arrange this is via our tax account e-service, “Skattekonto”.
Is your business doing less well than expected?
Many companies have experienced a significant decline in revenue and business this year is going far less well than anticipated. If this is the case for your company, there are several things you can do to ease your tax situation.
Adjust your preliminary tax – file a new preliminary income tax return for the current financial year
Many companies have experienced a significant drop in revenue and lower levels of business than anticipated for the year. If this is the case for your company, there are several things you can do to ease your tax situation.
Adjust your preliminary tax – file a new preliminary income tax return for 2021
If business is going badly, you should adjust the forecast on which the tax that your company pays each month is based. The preliminary tax you pay should be at the right level to cover the income tax on the company’s actual earnings for 2021. For example, if you had expected to make a profit this year, but now expect to make less profit or even a loss, you can adjust the company’s preliminary tax for 2021. The company may then have to pay less or no preliminary tax for the rest of the financial year. If you now expect your company to make a loss, you will also receive a refund of the preliminary tax you have already paid during this financial year. If you still expect to make a profit, though less than previously predicted, you may also be entitled to a refund. The amount that will be refunded depends on how much less profit you expect to make.
You can submit a new preliminary income tax return as many times as you like during the year. By doing so, you will avoid paying too much preliminary tax.
What to do if things start going less well for your company
There are several ways for you to solve your problems as a business owner, buy communicating with your employees, customers, banks and investors. Here is an outline of what you can do in relation to the Swedish Tax Agency.
The Swedish Tax Agency is responsible for collecting taxes and contributions in a way that is both legally certain and economically effective for society. It has to be easy for everyone to do the right thing.
The Swedish Tax Agency works actively as a creditor in order to:
- get paid for established taxes and fees
- prevent liabilities from mounting
- promote fair competition and prohibit irresponsible business activities
Do you need to defer payment of your company’s taxes by being granted respite, even though the amount due is correct?
You can apply to defer payment of taxes and other contributions that you have already declared. This is known as payment respite.
If your company is granted payment respite, you will be charged interest on the deferred amount. For temporary payment respite, you also pay a monthly fee. The interest and fees are not tax deductible for your business.
Temporary payment respite for employer contributions, deducted tax and VAT due to the COVID-19 pandemic
You can be granted payment respite for a maximum of one year from the date of the decision, with the possibility of an extension for a maximum of one additional year. To be granted an extension, you must submit a new application. The easiest way to do this is via “My pages” (“Mina sidor”).
There is no deadline for applications. A payment respite period, including an extension period, can run until 12 March 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. For VAT reported for the full year, the respite period with extension may run until 17 January 2024 at the latest.
Apply for temporary tax-payment respite (in Swedish)
Tax-payment respite in case of temporary payment problems
Respite allows you to defer payment for up to one to two months, provided that:
- you can prove that you would benefit from a short respite period
- you will be able to make the payment at the end of the respite period (in the majority of circumstances, this is difficult to prove since the economic situation is uncertain for most members of society)
Given the far-reaching consequences of the COVID-19 pandemic, we can grant a respite period of up to four months with the possibility of an extension. You will pay interest at 1.25% on the respite amount.
Do you wish to extend your payment respite period?
If you have previously applied for and received temporary payment respite, but have not used the maximum respite period of one year, you can submit a new application for the same period(s).
If you then need an additional extension of a maximum of 12 months, you must submit a new application.
When the Swedish Tax Agency has process your application, you will receive a new decision. You can apply directly via “My pages” (“Mina sidor”). Alternatively, we offer another e-service that does not require you to log in.
How many payment respite requests can I make?
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly or quarterly can be granted for reporting periods that fall between:
- January 2020 and January 2021
- October and December 2021
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly can be granted for a maximum of nine reporting periods.
Payment respite for VAT reported quarterly can be granted for a maximum of three reporting periods.
Payment respite for VAT reported annually can be granted for a maximum of two reporting periods between 7 December 2019 and 17 January 2023.
Would you like your payment respite to be withdrawn?
If you have been granted temporary payment respite on taxes and contributions, but no longer need respite, please contact the Swedish Tax Agency and ask for your respite to be withdrawn. You will then have 30 days to pay off the amount for which you have been granted respite as well as any interest or respite fee that might be due.
You can request for your respite to be withdrawn via My pages (Mina sidor) or our e-service “Apply for temporary tax-payment respite” (“Ansök om tillfälligt anstånd med skattebetalning”). You can also contact us by post or by email. Alternatively, you can call us.
In order to have respite withdrawn, you need to provide us with the following details:
- your company’s corporate identity number
- a contact name and phone number
- the respite amount for which you wish respite to be withdrawn
- the period for which respite was granted
- the date from which you wish respite to be withdrawn
Is your unemployment insurance provider asking whether your operation is dormant?
Dormant company: sole trader
All unemployment insurance providers set terms and conditions for the right to compensation. Since these vary, you need to check with your unemployment insurance provider which terms and conditions apply to you.
In some cases, a requirement is that the company must be dormant. The term “dormant” has no basis in Swedish tax regulations; in other words, a company cannot be registered as dormant. However, it is possible to pause your operations; this means that you do not engage in any business activities whatsoever – either through the sale of goods or services, or by incurring additional costs through the marketing or development of the business.
There are two important things to consider.
You cannot pause operations for an unlimited period; your business might then be considered closed, which could have tax consequences.
If you pause your operations in 2020, for example, the business can only remain dormant until the end of 2021 at the latest. In order for the dormant period to be recognised as such, you must have the intention of starting up the business again at some point.
It is important to remember that you still have tax liabilities when your business is dormant. If your business has not closed completely, and you intend to start it up again, you must:
- declare your operations in your income tax return, even if you have zero to declare
- report VAT as long as the company is registered for VAT, even if no purchases or sales have been made (find out more about VAT when a business is dormant under “Have you paused your business operations?”
- declare employer contributions as long as your company is a registered employer – even if you have not paid any compensation
Example
Jelena runs an advertising agency, and her clients inform her that all ongoing and planned assignments are being cancelled due to the COVID-19 pandemic. Since there is no further demand for Jelena’s services, she decides to pause her business until the demand for her services increases.
In December, she starts working with her advertising agency a little again when a client gets in touch about an event scheduled to take place around Easter.
The pause in activities does not mean that Jelena has closed her business; she has simply taken a break. Although her business was dormant for several months, Jelena still filed her VAT and PAYE tax returns, with zeros entered in the relevant boxes. She must also file the NE annexe with her income tax return.
If you still wish to close and deregister your business, you can find out more here:
VAT
Some special situations can arise because of the COVID-19 pandemic, and many business owners have questions relating to VAT. To help answer these questions, we have gathered information about VAT in connection with the COVID-19 pandemic on a dedicated webpage.
On this page you, can find information about VAT with regard to the following:
- customer losses
- loans and grants received by your company in connection with the COVID-19 pandemic
- interrupting operations
- renting of premises and hotel rooms during the COVID-19 pandemic
- VAT when the company gives goods to hospitals, for example
- exemption from customs duties and VAT on imports of goods to combat COVID-19
- VAT when the company buys office equipment for employees to use at home
Further information about VAT and the COVID-19 pandemic is available in the Legal guidance section.
Do you need help with accounting and bookkeeping?
It can be difficult to know how to manage your bookkeeping if you have had to take various measure with regard to COVID-19. The Swedish Accounting Standards Board (“BFN”) has therefore collected answers to frequently asked questions and answers about this on its website.
Are you unable to file Income Tax Return 1 on time?
The deadline for filing tax returns was 3 May. If you applied for a deferral by 3 May, the deadline was extended to 31 May.
If you report VAT on an annual basis, the deferral does not apply to your VAT return; the 12 May deadline applies.
If an accountancy firm assists you with your tax return, it was possible for this firm to apply for a deferral until 15 June. Should your tax return be filed after that date due to the fact that your accountancy firm has been affected by, for example, sickness relating to the COVID-19 pandemic, we will take this into account in the assessment of the late filing penalty. If you are not sure whether a such a deferral has been granted, please contact your accountancy firm.
Tax returns filed after 3 May are subject to a late filing penalty if a deferral has not been granted. In this case, we will notify you of our proposed decision regarding the late filing penalty. If you disagree with the proposed decision, you can send us a reply stating your reasons.
Limited companies, economic associations and tenant-owner associations
Here we have collected information about taxation in different situations for limited companies, economic associations and tenant-owner associations.
When to declare reorientation support in your tax return
Taxable business subsidy
Reorientation support is a business subsidy, in accordance with the definition used in chapter 29 of the Income Tax Act. The basis is that the company’s turnover is taxable and the fixed costs covered by the subsidy are tax deductible. In most cases, the allowance received must therefore be included in income taxation.
The time point when the allowance should be declared in the income tax return is specifically regulated in the legislation on reorientation support. Taxable reorientation support should be declared in full in the tax return for the tax year in which you were granted the subsidy. If the reorientation support relates to costs incurred in the previous tax year, you can instead choose to declare the part of the allowance relating to those costs in your tax return for the year in which they were incurred. This is to enable you to align the allowance received with the costs incurred.
How to account for reorientation support in your bookkeeping
You must book reorientation support as other operating income. This means that you enter the subsidy in box 3.4 of Income Tax Return 2.
If the subsidy has been included in the accounts as revenue for the year in which the subsidy was granted, but you choose to include the subsidy in income taxation for the year in which you incurred the cost, you should make a tax adjustment in your income tax return . This is to ensure that your final tax is calculated correctly.
You make the tax adjustment in box 4.5c (booked revenue not to be recognised) or 4.6e (revenue to be recognised but not included in the reported profit or loss) of Income Declaration 2.
Repayment
If you have repaid all or part of a taxable reorientation support subsidy, you should claim a deduction for the repaid amount. You claim the deduction in your tax return for the year in which you made the repayment. If you have been notified that you must repay all or part of a subsidy, and you have entered this amount as a cost in your accounts but have not repaid the sum at the end of the tax year, you should make a tax adjustment to obtain the correct result for tax purposes.
The Swedish Tax Agency will not investigate the date of a deduction for repayment of a business subsidy in the income tax return for tax years ending during the period 1 March 2020 to 31 August 2022.
When should details of other COVID-19 allowances be included in your income tax return?
Business subsidies
If you have received support for your business from, for example, the EU, the Swedish state, or a Swedish region or municipality, this counts as a business subsidy according to section 29 of the Swedish Income Tax Act. Business subsidies are normally taxable as they usually compensate for taxable income and deductible expenses.
Examples of business subsidies include emergency support for cancelled or postponed events from the Swedish Arts Council (“Kulturrådet”), short-time work allowance from the Swedish Agency for Economic and Regional Growth (“Tillväxtverket”) and compensation for high sick pay costs from the Swedish Social Insurance Agency (“Försäkringskassan”).
The main principle is that good accounting practice should determine the time point for taxation of business subsidies. If you have received a subsidy to cover an expense that you incurred in the previous tax year, and which is to be deducted immediately, it is possible to include the tax deduction for the expense in the income tax return for the year in which you are taxed for the subsidy. This allows you to align the expense with the revenue. You will then have to make tax adjustments in your tax return.
- Bokföringsnämnden: Accounting for different forms of COVID-19-related support External link, opens in new window.
- Legal guidance: Tax point (in Swedish) External link, opens in new window.
Example
A limited company received crisis support from the Swedish Arts Council for an event in August 2020 that was cancelled due to the COVID-19 pandemic. The company was granted a subsidy, which was paid out in December 2020. The company had already prepared its annual accounts for the financial year 1 September 2019 to 31 August 2020. At the time the company prepared its annual accounts, there had not been a decision from the government regarding crisis support. The company had not received any subsidy and could not therefore account for a revenue, in accordance with good accounting practice.
The company received the subsidy in December 2020 and accounted for it as a revenue. Following good accounting practice, the company also entered the subsidy as a revenue in its income tax return for the financial year 1 September 2020 to 31 August 2021.
Part of the subsidy was to cover additional costs incurred by the company in August 2020 due to the cancellation of the event. These costs are recognised as expenses in August 2020, but the company may choose to claim a deduction in its tax return for 1 September 2020 to 31 August 2021. In this case, the expenses should be entered as a tax adjustment in box 4.4b. The company should also make a tax adjustment in box 4.3c in the income tax return for the financial year 1 September 2019 to 31 August 2020, as the deduction will not be made that year.
Repayment
If you have repaid all or part of a taxable business subsidy, you should claim a tax deduction for the amount repaid.
In the case of repayment of a business subsidy to cover expenses, good accounting practice does not determine the time point for taxation. You claim the deduction in your tax return for the year during which you made the repayment. If you have been notified that you must repay all or part of a subsidy, and you have entered this amount as a cost in your accounts but have not repaid the sum at the end of the tax year, you should make a tax adjustment to obtain the correct result for tax purposes.
The Swedish Tax Agency will not investigate the date of a deduction for repayment of a business subsidy in the income tax return for tax years ending during the period 1 March 2020 to 31 August 2022.
Example of repayment
A limited company received a preliminary short-time work allowance payment of SEK 30,000 for the period May to July 2020. At its check-in in August, the company was informed by the Swedish Agency for Economic and Regional Growth (“Tillväxtverket“) that its final subsidy entitlement was SEK 10,000. The company therefore paid back SEK 20,000.
When the company received its preliminary allowance payment, it entered SEK 30,000 as other operating income in its accounts. The repayment meant that the company’s other operating income decreased by SEK 20,000 in its accounts. The decisions, payment and repayment were made during the company’s financial year: 1 January to 31 December 2020. When the company files its income tax return for 2020, these transactions will result in a revenue of SEK 10,000, which corresponds to the final subsidy entitlement.
Do you have employees?
There are several forms of financial support to cover staff costs.
Tax on benefits
Parking
The temporary tax exemption on free parking at work has been reintroduced and will apply until 31 December 2021.
Gifts
The temporary tax exemption for gifts to employees has been reintroduced and will apply until 31 December 2021. The tax-free value of gifts is SEK 2,000 including VAT per employee.
- Swedish parliament: gifts (in Swedish) External link.
- Christmas presents and other gifts to employees (in Swedish)
Testing for COVID-19
As an employer, you can pay for your employees to be tested to check whether they currently have or have previously been affected by a disease classified as a danger to the general public under the Swedish Communicable Diseases Act. COVID-19 is such a disease. This is a tax-exempt employee benefit; testing is considered to be a form of preventive occupational health care.
Taxi journeys
Taxi journeys and similar travel benefits to employees in order to reduce the risk of infection during the COVID-19 pandemic should be valued at the equivalent cost of public transport. This valuation applies from March 2020, for as long as the Public Health Agency of Sweden (Folkhälsomyndigheten) recommends restrictions to reduce the spread of infection in public transport.
Internal business entertainment
As an employer, in order to pay for a meal for your employees without them becoming liable to pay tax on it, the meal must count as internal business entertainment. It can only do so if the meal is eaten by employees at the same time in a space designated by the employer. So if you pay for a meal or any other food for your employees in any other way – for example, by having food delivered to those working from home – this will be considered a taxable benefit.
Meals provided by others to your employees
If your employees have received free meals from any party other than you as their employer – and there are no reciprocal obligations – they are not required to pay tax on them. Meals may, for example, be provided by the public as a means of showing appreciation. Such meals are tax-free – even if they have been provided to you as an employer and you distribute them among your employees. These regulations came into force on 1 January 2021, but they apply from 1 March 2020.
Face masks
Face masks provided to employees to limit the risk of COVID-19 infection at work, and during travel to and from work, are not taxable employee benefits. The provision of face masks in such situations may be regarded as a measure taken by an employer to ensure a safe work environment, and to prevent employees from experiencing health problems in the workplace and in connection with travel to and from the workplace.
Lowered employer contributions for young people
The Riksdag has decided to reduce employer contributions for young people who were between 18 and 22 years old at the start of the year.
The new rules mean that you will pay reduced employer contributions in 2021 for employees born between 1998 and 2002. The law came into force on 1 January 2021, and it applies to compensation for work that was paid after 31 December 2020.
This law will apply for a limited period, up to and including 31 March 2023.
The Swedish Tax Agency will calculate employer contributions automatically when you file your PAYE return.
Further reduction in employer contributions for June to August 2021 for those aged between 19 and 23.
The Riksdag has decided on a temporary reduction in employer contributions for persons born between 1998 and 2002. For compensation up to SEK 25,000 per month, the employer contribution rate is 10.21% for payments made during June, July and August 2021. For the part of the compensation that exceeds SEK 25,000, the full employer contribution rate applies: 31.42%.
The rules came into force on 19 June. If you filed your PAYE return for June before this date, you must request a review in order to benefit from the reduced rate. The PAYE return for the month of June must be filed by 12 July 2021.
This applies for temporarily lowered employer contributions
Percentage | Day/month of payment |
19.73 | Up to 31 May 2021, then from 1 September 2021 to 31 March 2023 |
10.21 | 1 June to 31 August 2021 |
Example:
The company Jordgubbsförsäljning AB employs 21-year-old Kim to work during the period 1 June to 31 August 2021. Kim has a monthly salary of SEK 21000 before tax. Jordgubbsförsäljning AB pays the salary in arrears, which means that Kim receives salary payments in July, August and September. For the salaries paid in July and August, the company pays 10.21% in employer's contribution. For the salary paid in September, the company pays 19.73% in employer's contribution.
The Swedish Agency for Economic and Regional Growth’s short-time work programme
Short-time work allowance (often referred to as furlough, or as “permittering” in Swedish) means that employers can reduce employees’ working hours and receive state aid to cover a large parts of the cost of salaries. To be granted this allowance, you apply to Swedish Agency for Economic and Regional Growth. You declare the salary you have paid to your employees in your PAYE tax return. You can print out the documentation required for the application from “My pages” (“Mina sidor”) on the Swedish Tax Agency’s website.
- The Swedish Agency for Economic and Regional Growth: Short-time work allowance External link, opens in new window.
- Print out supporting documents for your short-time work allowance application (in Swedish)
Examples of how to calculate employer contributions for short-time work
The engineering firm Elmontering has agreed with its employees that their working hours will be reduced by 60%. According to the short-time work allowance rules, the government will cover 45% of salary costs and employees’ compensation will be reduced by 7.5%.
Karl, one of Elmontering’s electricians, usually earns SEK 30,000 per month.
His new monthly salary will be SEK 27,750 when his working hours are reduced (SEK 30,000 minus 7.5% of SEK 30,000). Elmontering must calculate and pay its employer contributions based on the gross salary of SEK 27,750 paid. The engineering firm declares Karl’s new gross salary of SEK 27,750 in its PAYE tax return. SEK 27,750 will also be the basis for Karl’s pensionable earnings.
Compensation for companies from the Swedish Social Insurance Agency due to high sick pay costs
Protection against high sick pay costs is available for all employers in Sweden. This means that employers can receive compensation for sick pay costs if these are particularly high. The Swedish Government decided that all employers would be entitled to compensation for their entire sick pay costs for the April to July 2020 period. For the August 2020 to September 2021 period, compensation is not paid for all sick pay costs, although these are covered to a greater extent than normal. For more information about how much compensation you can receive as an employer, please contact the Swedish Social Insurance Agency (“Försäkringskassan”).
You do not need to make a special application for compensation. Declare the compensation you receive for sick pay costs in your PAYE return. The Swedish Tax Agency will forward details of your sick pay costs to the Swedish Social Insurance Agency which will then pay any compensation due into your tax account. Compensation for high sick pay costs is normally paid once a year (in March), but it was paid on a monthly basis during the April 2021 to September 2021 period. If you have no liabilities to offset against this payment, and you would like compensation to be paid to you, the easiest way to arrange this is via our tax account e-service, “Skattekonto”.
Is your business doing less well than expected?
Many companies have experienced a significant drop in revenue and lower levels of business than anticipated for the year. If this is the case for your company, there are several things you can do to ease your tax situation.
Adjust your preliminary tax – file a new preliminary income tax return for the current year
If your business is not going as well as expected, you should adjust the forecast that forms the basis for the tax your company pays each month. The preliminary tax you pay should be at the right level to cover the income tax on the company’s actual earnings for the current financial year. For example, if you expected to make a profit for the year, but now expect a lower profit or a loss, you can adjust the company’s preliminary tax for the financial year. The company may then pay less or no preliminary tax for the rest of the financial year. If you now expect a loss, you will also receive a refund of the preliminary tax you have already paid so far in this financial year. You may also be entitled to a refund if you still expect a profit, but at a lower level. The amount that can be refunded depends on how much lower you expect the profit to be.
You can submit a new preliminary income tax return as many times as you need to during the year. By doing this, you will avoid paying too much preliminary tax.
Preliminary tax refunds for the previous financial year if the company has paid too much – adjust the company’s preliminary tax return for the financial year
If it turns out that the company paid too much preliminary tax in the previous financial year, you can obtain a refund of the excess amount by adjusting the preliminary tax for that year.
If you have recently filed your income tax return, or are about to do so, you can await the result and then, if the company is due a tax refund, file a new preliminary income tax return for the previous year using the same details and results.
Submitting a new preliminary income tax return means you make a retroactive adjustment for the previous financial year and can be granted a refund of the excess preliminary tax that you have already paid.
You can file a new preliminary income tax return up to six months after the end of the last financial year.
Calculate preliminary tax for the next financial year
You can submit a forecast for the next financial year, where you estimate the result you expect the company to achieve. This estimate will serve as a basis for calculating the preliminary tax your company will be due to pay next year.
You can file a preliminary income tax return through our e-service or using a paper form.
What to do if things start going less well for your company
There are several ways for you to solve your problems as a business owner, buy communicating with your employees, customers, banks and investors. Here is an outline of what you can do in relation to the Swedish Tax Agency.
The Swedish Tax Agency is responsible for collecting taxes and contributions in a way that is both legally certain and economically effective for society. It has to be easy for everyone to do the right thing.
The Swedish Tax Agency works actively as a creditor in order to:
- secure revenue for established taxes and charges
- prevent liabilities from mounting
- promote fair competition and prevent irresponsible business activities
Are the company’s taxes correct but you need to defer payment?
You can apply to defer payment of taxes and other charges that you have already declared. This is known as payment respite.
If your company is granted payment respite, you will be charged interest on the deferred amount. For temporary payment respite, you also pay a monthly fee. The interest and fees are not tax deductible for your business.
Temporary payment respite for employer contributions, deducted tax and VAT due to the COVID-19 pandemic
You can be granted payment respite for a maximum of one year from the date of the decision, with the possibility of an extension for a maximum of one additional year. To be granted an extension, you must submit a new application. The easiest way to do apply is via “My pages” (“Mina sidor”).
There is no deadline for applications. A payment respite period, including an extension period, can run until 12 March 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. For VAT reported for the full year, the respite period with extension may run until 17 January 2024 at the latest.
Apply for temporary tax-payment respite (in Swedish)
Tax-payment respite in case of temporary payment problems
Respite allows you to defer payment for up to one to two months, provided that:
- you can prove that you would benefit from a short respite period
- you will be able to make the payment at the end of the respite period (in the majority of circumstances, this is difficult to prove since the economic situation is uncertain for most members of society) Your company will pay interest at 1.25% on the respite amount.
Do you wish to extend your payment respite period?
If you have previously applied for and received temporary payment respite, but have not used the maximum respite period of one year, you can submit a new application for the same period(s).
If you then need an additional extension of a maximum of 12 months, you must submit a new application.
When the Swedish Tax Agency has process your application, you will receive a new decision. You can apply directly via “My pages” (“Mina sidor”). Alternatively, we offer another e-service that does not require you to log in.
How many payment respite requests can I make?
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly or quarterly can be granted for reporting periods that fall between:
- January 2020 and January 2021
- October and December 2021
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly can be granted for a maximum of nine reporting periods.
Payment respite for VAT reported quarterly can be granted for a maximum of three reporting periods.
Payment respite for VAT reported annually can be granted for a maximum of two reporting periods between 7 December 2019 and 17 January 2023.
Would you like your payment respite to be withdrawn?
If you have been granted temporary payment respite on taxes and charges, but no longer need respite, please contact the Swedish Tax Agency and ask for your respite to be withdrawn. You will then have 30 days to pay off the amount for which you have been granted respite as well as any interest or respite fee due.
You can request for your respite to be withdrawn via My pages (Mina sidor) or our e-service “Apply for temporary tax-payment respite” (“Ansök om tillfälligt anstånd med skattebetalning”). You can also contact us by post or by email. Alternatively, you can call us.
To have your respite withdrawn, please provide the following details:
- your company’s corporate identity number
- a contact name and phone number
- the respite amount you wish to be withdrawn
- the period for which respite was granted
- the date from which you wish respite to be withdrawn
VAT
Some special situations can arise because of the COVID-19 pandemic, and many business owners have questions relating to VAT. To help answer these questions, we have gathered information about VAT in connection with the COVID-19 pandemic on a dedicated webpage.
On this page you, can find out about VAT in relation to the following:
- customer losses
- loans and grants received by your company in connection with the COVID-19 pandemic
- interrupting operations
- renting of premises and hotel rooms during the COVID-19 pandemic
- VAT when the company gives goods to hospitals, for example
- exemption from customs duties and VAT on importing goods to help combat COVID-19
- VAT when a company buys office equipment for employees to use at home
Further information about VAT and the COVID-19 pandemic is available in the “Legal guidance” section (in Swedish).
Do you need help with accounting and bookkeeping?
It can be difficult to know how to manage your bookkeeping if you have had to take various COVID-19-related measures. The Swedish Accounting Standards Board (“BFN”) has therefore collected answers to frequently asked questions and answers about this on its website.
Transfer Pricing and the Consequences of the COVID-19 Pandemic
The OECD has published a guidance on how the arm's length principle and the OECD's guidelines for transfer pricing should be applied to issues that arise or become more significant as a result of the COVID-19 pandemic.
Non-profit associations, tax-exempt foundations and registered religious organisations
There are several things to do or to consider with regard to the effects of the COVID-19 pandemic.
When to declare reorientation support in your tax return
Business subsidies
Reorientation support is a business subsidy an association, foundation or registered religious organisation must pay tax on the allowance if it covers fixed costs that are deductible in a tax-liable operation.
However, you should not pay tax on reorientation support if it covers fixed costs in a tax-exempt operation.
- Income that may be tax-exempt in a non-profit association
- How income is taxed for a foundation (in Swedish)
The time point when the allowance should be declared in the income tax return is specifically regulated in the legislation on reorientation support. Taxable reorientation support should be declared in full in the tax return for the tax year in which you were granted the subsidy. If the reorientation support relates to costs incurred in the previous tax year, you can instead choose to declare the part of the allowance relating to those costs in your tax return for the year in which they were incurred. This is to enable you to align the allowance received with the costs incurred.
How to declare your reorientation support allowance
You must book reorientation support as other operating income. An association or registered religious organisation that has used the allowance in a tax-exempt operation should declare it in box 4.2 of the annexe “Special information for non-profit organisations and religious organisations” (“Särskild uppgift för ideella föreningar och registrerade trossamfund”; INK3SUF, in Swedish). An foundation that has used the allowance in a tax-exempt operation should declare it in box 3.2 of the annexe “Special information for non-profit organisations and religious organisations” (“Särskild uppgift för ideella föreningar och registrerade trossamfund”; INK3SUF, in Swedish).
If the allowance has been used in a tax-liable operation, you should declare it in box 6.3 of the annexe “Schedule of accounts” (“Räkenskapsschema”).
If the subsidy has been included in the accounts as revenue for the year in which the subsidy was granted, but you choose to include the subsidy in income taxation for the year in which you incurred the cost, you should make a tax adjustment in your income tax return . This is to ensure that your final tax is calculated correctly. You make the tax adjustment by moving the tax-liable allowance amount to the right-hand column of box 6.3 or 7.5d of Income Tax Return 3.
Repayment
If you have repaid all or part of a taxable reorientation support subsidy, you should claim a deduction for the repaid amount. You claim the deduction in your tax return for the year in which you made the repayment. If you have been notified that you must repay all or part of a subsidy, and you have entered this amount as a cost in your accounts but have not repaid the sum at the end of the tax year, you should make a tax adjustment to obtain the correct result for tax purposes.
When should details of other COVID-19 allowances be included in your income tax return?
Business subsidies
If you have received support for your business from, for example, the EU, the Swedish state, or a Swedish region or municipality, this counts as a business subsidy according to section 29 of the Swedish Income Tax Act. An association, foundation or registered religious organisation is usually required to pay tax on business subsidies if the allowance relates to income and deductible expenses in a taxable operation.
However, you are not required to to pay tax on the allowance if it relates to income and deductible expenses in a tax-exempt operation.
- Income that may be tax-exempt in a non-profit association
- How income is taxed for a foundation (in Swedish)
Examples of business subsidies include emergency support for cancelled or postponed events from the Swedish Arts Council (“Kulturrådet”), short-time work allowance from the Swedish Agency for Economic and Regional Growth (“Tillväxtverket”) and compensation for high sick pay costs from the Swedish Social Insurance Agency (“Försäkringskassan”).
The main principle is that good accounting practice should determine the time point for taxation of business subsidies. If you have received a subsidy to cover an expense that you incurred in the previous tax year, and which is to be deducted immediately, it is possible to include the tax deduction for the expense in the income tax return for the year in which you are taxed for the subsidy. This allows you to align the expense with the revenue. You will then have to make tax adjustments in your tax return.
Repayment
If you have repaid all or part of a taxable business subsidy, you should claim a tax deduction for the amount repaid.
In the case of repayment of a business subsidy to cover expenses, good accounting practice does not determine the time point for taxation. You claim the deduction in your tax return for the year during which you made the repayment. If you have been notified that you must repay all or part of a subsidy, and you have entered this amount as a cost in your accounts but have not repaid the sum at the end of the tax year, you should make a tax adjustment to obtain the correct result for tax purposes.
The Swedish Tax Agency will not investigate the date of a deduction for repayment of a business subsidy in the income tax return for tax years ending during the period 1 March 2020 to 31 August 2022.
Do you need help with accounting and bookkeeping?
It can be difficult to know how to manage your bookkeeping if you have had to take various COVID-19-related measures. The Swedish Accounting Standards Board (“BFN”) has therefore collected answers to frequently asked questions and answers about this on its website.
Do you have employees?
There are several ways for you to receive financial aid for the costs you have for your employees. There are also temporary rules on tax exemption for gifts up to SEK 1,000 and free parking for employees.
Tax on benefits
Parking
The temporary tax exemption on free parking at work has been reintroduced and will apply until 31 December 2021.
- Swedish parliament: parking (in Swedish) External link, opens in new window.
- Parking and garage space (in Swedish)
Gifts
The temporary tax exemption on gifts to employees has been reintroduced and will apply until 31 December 2021. The tax-free value of gifts is SEK 2,000 including VAT per employee.
- Swedish parliament: gifts (in Swedish) External link.
- Christmas presents and other gifts to employees (in Swedish)
Testing for COVID-19
As an employer, you can pay for your employees to be tested to check whether they currently have or have previously been affected by a disease classified as a danger to the general public under the Swedish Communicable Diseases Act. COVID-19 is such a disease. This is a tax-exempt employee benefit. Testing is considered to be a form of preventive occupational health care.
Taxi journeys
With regard to travel to and from work, taxi fares or other employee travel benefits to limit the risk of infection during the COVID-19 pandemic should be valued at a rate comparable to the cost of public transport. This assessment should be applied from March 2020 for as long as the Public Health Agency of Sweden recommends restrictions to reduce the spread of infection on public transport.
Internal business entertainment
As an employer, in order to pay for a meal for your employees without them becoming liable to pay tax on it, the meal must count as internal business entertainment. It can only do so if the meal is eaten by employees at the same time in a space assigned by the employer. So if you pay for a meal or any other food for your employees in any other way – for example, by having food delivered to those working from home – this becomes a taxable benefit.
Meals provided by others to your employees
If your employees have received free meals from any party other than you as their employer – with no claim for compensation – they are not required to pay tax on them. Meals may, for example, be provided by the public as a means of showing appreciation. Such meals are tax-free – even if they have been provided to you as an employer and you distribute them among your employees. These regulations came into force on 1 January 2021, but they apply from 1 March 2020.
Face masks
As an employer, when you provide your employees with face masks for use at work, and on journeys to and from work to limit the risk of COVID-19 infection, this is not a taxable employee benefit. The provision of face masks in such situations may be regarded as a measure taken by an employer to ensure a safe work environment, and to prevent employees from experiencing health problems in the workplace and in connection to journeys to and from the workplace.
Lowered employer contributions for young people
The Riksdag has decided to reduce employer contributions for young people who were between 18 and 22 years old at the start of the year.
The new rules mean that you will pay reduced employer contributions in 2021 for employees born between 1998 and 2002. The law came into force on 1 January 2021, and it applies to compensation for work that was paid after 31 December 2020.
This law will apply for a limited period, up to and including 31 March 2023.
The Swedish Tax Agency will calculate employer contributions automatically when you file your PAYE return.
Further reduction in employer contributions for June to August 2021 for those aged between 19 and 23.
The Riksdag has decided on a temporary reduction in employer contributions for persons born between 1998 and 2002. For compensation up to SEK 25,000 per month, the employer contribution rate is 10.21% for payments made during June, July and August 2021. For the part of the compensation that exceeds SEK 25,000, the full employer contribution rate applies: 31.42%.
The rules came into force on 19 June. If you filed your PAYE return for June before this date, you must request a review in order to benefit from the reduced rate. The PAYE return for the month of June must be filed by 12 July 2021.
This applies for temporarily lowered employer contributions
Percentage | Day/month of payment |
|---|---|
19.73 | Up to 31 May 2021, then from 1 September 2021 to 31 March 2023 |
10.21 | 1 June to 31 August 2021 |
Example:
The company Jordgubbsförsäljning AB employs 21-year-old Kim to work during the period 1 June to 31 August 2021. Kim has a monthly salary of SEK 21000 before tax. Jordgubbsförsäljning AB pays the salary in arrears, which means that Kim receives salary payments in July, August and September. For the salaries paid in July and August, the company pays 10.21% in employer's contribution. For the salary paid in September, the company pays 19.73% in employer's contribution.
Short-time work allowance (Swedish Agency for Economic and Regional Growth; “Tillväxtverket”)
Short-time work allowance (often referred to as furlough, or as “permittering” in Swedish) means that employers can reduce employees’ working hours and receive state aid to cover a large parts of the cost of salaries. You apply to the Swedish Agency for Economic and Regional Growth for this allowance. You declare the compensation you have paid to employees in your PAYE tax return. You can print out supporting documents for your application from “My pages” (“Mina sidor”) on our website, skatteverket.se.
- Swedish Agency for Economic and Regional Growth: s External link, opens in new window.hort-time work allowance (in Swedish) External link, opens in new window.
- Print out the documentation required for the short-time work allowance application (in Swedish)
Applying for short-time work allowance does not affect your right to reduced employer contributions.
Examples of how to calculate employer contributions for short-time work
A handball association has agreed with its employees that their working hours will be reduced by 60%. According to the short-time work allowance rules, the government will cover 45% of salary costs and employees’ compensation will be reduced by 7.5%.
Coach Carina’s normal salary is SEK 30,000 per month.
Her new monthly salary during short-time work will be SEK 27,750 (30,000 SEK: 7.5% of SEK 30,000). The association will calculate and pay employer contributions on the actual gross salary paid: SEK 27,750. The association will declare Carina’s new gross salary of SEK 27,750 SEK in its PAYE tax return. Carina’s pensionable income will also be based on her salary of SEK 27,750.
Compensation for companies from the Swedish Social Insurance Agency due to high sick pay costs
Protection against high sick pay costs is available for all employers in Sweden. This means that employers can receive compensation for sick pay costs if these are particularly high. The Swedish Government decided that all employers would be entitled to compensation for their entire sick pay costs for the April to July 2020 period. For the August 2020 to September 2021 period, compensation is not paid for all sick pay costs, although these are covered to a greater extent than normal. For more information about how much compensation you can receive as an employer, please contact the Swedish Social Insurance Agency (“Försäkringskassan”).
You do not need to make a special application for compensation. Declare the compensation you receive for sick pay costs in your PAYE return. The Swedish Tax Agency will forward details of your sick pay costs to the Swedish Social Insurance Agency, which will then pay any compensation due into your tax account. Compensation for high sick pay costs is normally paid once a year (in March), but it was paid on a monthly basis during the April 2021 to September 2021 period. If you have no liabilities to offset against this payment, and you would like compensation to be paid to you, the easiest way to arrange this is via our tax account e-service, “Skattekonto”.
Do you need payment respite for taxes or other charges?
Temporary payment respite for employer contributions, deducted tax and VAT due to the COVID-19 pandemic
You can be granted payment respite for a maximum of one year from the date of the decision, with the possibility of an extension for a maximum of one additional year. To be granted an extension, you must submit a new application. The easiest way to do apply is via “My pages” (“Mina sidor”).
There is no deadline for applications. A payment respite period, including an extension period, can run until 12 March 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. For VAT reported for the full year, the respite period with extension may run until 17 January 2024 at the latest.
Apply for temporary tax-payment respite (in Swedish)
Do you wish to extend your payment respite period?
If you have previously applied for and received temporary payment respite, but have not used the maximum respite period of one year, you can submit a new application for the same period(s).
If you then need an additional extension of a maximum of 12 months, you must submit a new application.
When the Swedish Tax Agency has process your application, you will receive a new decision. You can apply directly via “My pages” (“Mina sidor”). Alternatively, we offer another e-service that does not require you to log in.
How many payment respite requests can I make?
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly or quarterly can be granted for reporting periods that fall between:
- January 2020 and January 2021
- October and December 2021
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly can be granted for a maximum of nine reporting periods.
Payment respite for VAT reported quarterly can be granted for a maximum of three reporting periods.
Payment respite for VAT reported annually can be granted for a maximum of two reporting periods between 7 December 2019 and 17 January 2023.
Would you like your payment respite to be withdrawn?
If you have been granted temporary payment respite on taxes and charges, but no longer need respite, please contact the Swedish Tax Agency and ask for your respite to be withdrawn. You will then have 30 days to pay off the amount for which you have been granted respite as well as any interest or respite fee due.
You can request for your respite to be withdrawn via My pages (Mina sidor) or our e-service “Apply for temporary tax-payment respite” (“Ansök om tillfälligt anstånd med skattebetalning”). You can also contact us by post or by email. Alternatively, you can call us.
To have your respite withdrawn, please provide the following details:
- your company’s corporate identity number
- a contact name and phone number
- the respite amount you wish to be withdrawn
- the period for which respite was granted
- the date from which you wish respite to be withdrawn
More detailed information about VAT in relation to the COVID-19 pandemic has been gathered in the “Legal guidance” section (in Swedish).
Public-sector organisations
In this section, we have gathered information about situations and issues relevant to public-sector organisations.
Do you have employees?
There are several forms of financial support to cover staff costs. Although the support packages may seem to be aimed primarily at the private sector, many parts also apply to public-sector employers.
Tax on benefits
Parking
The temporary tax exemption relating to free parking at work has been reintroduced and will apply until 31 December 2021.
Gifts
The temporary tax exemption on gifts to employees has been reintroduced and will apply until 31 December 2021. The tax-free value of gifts is SEK 2,000 including VAT per employee.
- Swedish parliament: gifts (in Swedish) External link.
- Christmas presents and other gifts to employees (in Swedish)
Testing for COVID-19
As an employer, you can pay for your employees to be tested to check whether they currently have or have previously been affected by a disease classified as a danger to the general public under the Swedish Communicable Diseases Act. COVID-19 is such a disease. This is a tax-exempt employee benefit. Testing is considered to be a form of preventive occupational health care.
Access to a car or taxi services for employees
There are several different scenarios in which employers give employees access to a car or taxi services to reduce the risk of infection. For example, an employee may be allowed to drive home with a car used for work instead of leaving it at the workplace. Or an employer may pay for a rental car so that the employee can avoid public transport. What do these scenarios mean for the purposes of tax?
Car journeys made for customer meetings or service visits count as business trips – even when starting from home. However, if an employee takes a work car home, the log book must show that private journeys have been minimal: a maximum of 10 occasions and a maximum of 100km per year. If the employee’s private journeys exceed this, the car will be considered a taxable benefit. Please note: a trip made only between the home and the workplace counts as a private journey.
With regard to travel to and from work, taxi journeys and similar travel benefits offered to employees in order to reduce the risk of infection during the COVID-19 pandemic should be valued at the equivalent cost of public transport. This valuation applies from March 2020, for as long as the Public Health Agency of Sweden ("Folkhälsomyndigheten") recommends restrictions to reduce the spread of infection on public transport.
Meals provided by others to your employees
If your employees have received free meals from any party other than you as their employer – with no claim for compensation – they are not required to pay tax on them. Meals may, for example, be provided by the public as a means of showing appreciation. Such meals are tax-free – even if they have been provided to you as an employer and you distribute them among your employees. These regulations came into force on 1 January 2021, but they apply from 1 March 2020.
Face masks
Face masks provided to employees to limit the risk of COVID-19 infection at work, and during travel to and from work, are not taxable employee benefits. The provision of face masks in such situations may be regarded as a measure taken by an employer to ensure a safe work environment, and to prevent employees from experiencing health problems in the workplace and in connection with travel to and from the workplace.
Lowered employer contributions for young people
The Riksdag has decided to reduce employer contributions for young people who were between 18 and 22 years old at the start of the year.
The new rules mean that you will pay reduced employer contributions in 2021 for employees born between 1998 and 2002. The law came into force on 1 January 2021, and it applies to compensation for work that was paid after 31 December 2020.
This law will apply for a limited period, up to and including 31 March 2023.
The Swedish Tax Agency will calculate employer contributions automatically when you file your PAYE return.
Further reduction in employer contributions for June to August 2021 for those aged between 19 and 23.
The Riksdag has decided on a temporary reduction in employer contributions for persons born between 1998 and 2002. For compensation up to SEK 25,000 per month, the employer contribution rate is 10.21% for payments made during June, July and August 2021. For the part of the compensation that exceeds SEK 25,000, the full employer contribution rate applies: 31.42%.
The rules came into force on 19 June. If you filed your PAYE return for June before this date, you must request a review in order to benefit from the reduced rate. The PAYE return for the month of June must be filed by 12 July 2021.
This applies for temporarily lowered employer contributions
Percentage | Day/month of payment |
19.73 | Up to 31 May 2021, then from 1 September 2021 to 31 March 2023 |
10.21 | 1 June to 31 August 2021 |
Example:
The company Jordgubbsförsäljning AB employs 21-year-old Kim to work during the period 1 June to 31 August 2021. Kim has a monthly salary of SEK 21000 before tax. Jordgubbsförsäljning AB pays the salary in arrears, which means that Kim receives salary payments in July, August and September. For the salaries paid in July and August, the company pays 10.21% in employer's contribution. For the salary paid in September, the company pays 19.73% in employer's contribution.
Compensation for companies from the Swedish Social Insurance Agency due to high sick pay costs
Protection is available for all employers in Sweden against high sick pay costs. This means that employers can receive compensation for sick pay costs if these are particularly high. The Swedish Government decided that all employers would be entitled to compensation for all of their sick pay costs for the April to July 2020 period. For the August 2020 to September 2021 period, compensation is not paid for all sick pay costs, although these are covered to a greater extent than normal. For more information about how much compensation you can receive as an employer, please contact the Swedish Social Insurance Agency (“Försäkringskassan”).
You do not need to make a special application for compensation. Declare the compensation you receive for sick pay costs in your PAYE return. The Swedish Tax Agency will forward details of your sick pay costs to the Swedish Social Insurance Agency which will then pay any compensation due into your tax account. Compensation for high sick pay costs is normally paid once a year (in March), but it was paid on a monthly basis during the April 2020 to September 2021 period. If you have no liabilities to offset against this payment, and you would like compensation to be paid to you, the easiest way to arrange this is via our tax account e-service, “Skattekonto”.
Are the company’s taxes correct but you need to defer payment?
You can apply to defer payment of taxes and other charges that you have already declared. This is known as payment respite.
If your company is granted payment respite, you will be charged interest on the deferred amount. For temporary payment respite, you also pay a monthly fee. The interest and fees are not tax deductible for your business.
Temporary payment respite for employer contributions, deducted tax and VAT due to the COVID-19 pandemic
You can be granted payment respite for a maximum of one year from the date of the decision, with the possibility of an extension for a maximum of one additional year. To be granted an extension, you must submit a new application. The easiest way to do apply is via “My pages” (“Mina sidor”).
There is no deadline for applications. A payment respite period, including an extension period, can run until 12 March 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. For VAT reported for the full year, the respite period with extension may run until 17 January 2024 at the latest.
Apply for temporary tax-payment respite (in Swedish)
Do you wish to extend your payment respite period?
If you have previously applied for and received temporary payment respite, but have not used the maximum respite period of one year, you can submit a new application for the same period(s).
If you then need an additional extension of a maximum of 12 months, you must submit a new application.
When the Swedish Tax Agency has process your application, you will receive a new decision. You can apply directly via “My pages” (“Mina sidor”). Alternatively, we offer another e-service that does not require you to log in.
How many payment respite requests can I make?
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly or quarterly can be granted for reporting periods that fall between:
- January 2020 and January 2021
- October and December 2021
Payment respite for deducted preliminary tax, employer contributions and VAT reported monthly can be granted for a maximum of nine reporting periods.
Payment respite for VAT reported quarterly can be granted for a maximum of three reporting periods.
Payment respite for VAT reported annually can be granted for a maximum of two reporting periods between 7 December 2019 and 17 January 2023.
Would you like your payment respite to be withdrawn?
If you have been granted temporary payment respite on taxes and charges, but no longer need respite, please contact the Swedish Tax Agency and ask for your respite to be withdrawn. You will then have 30 days to pay off the amount for which you have been granted respite as well as any interest or respite fee due.
You can request for your respite to be withdrawn via My pages (Mina sidor) or our e-service “Apply for temporary tax-payment respite” (“Ansök om tillfälligt anstånd med skattebetalning”). You can also contact us by post or by email. Alternatively, you can call us.
To have your respite withdrawn, please provide the following details:
- your company’s corporate identity number
- a contact name and phone number
- the respite amount you wish to be withdrawn
- the period for which respite was granted
- the date from which you wish respite to be withdrawn
Questions about reimbursement applications, requisitions and other VAT issues
Application for VAT refunds
Can I send a copy of my application or email a scanned version?
No, this is not allowed under Swedish law. The original signed application must be submitted to the Swedish Tax Agency.
VAT requisitions
Can I send a copy of a requisition or email a scanned version?
No. Original signed requisitions must be submitted to the Swedish Tax Agency.
The municipality offers school lunches at a local restaurant
Some municipalities have offered high school students lunch at local restaurants instead of on school premises. Are there any tax-related issues with this?
As long as the restaurant issues an accurate invoice, the municipality is entitled to VAT refunds under Swedish law (2005:807). Since students are entitled to free lunches, these will not be taxed as a benefit.
Temporary exemption from customs duties and VAT on imports of goods to combat COVID-19
Exemption from customs duties has been introduced for a limited period for certain goods imported to combat COVID-19, such as medical supplies. This applies to imports made on behalf of public-sector organisations, public bodies, other regulated bodies governed by public law (such as regions and municipalities), as well as disaster relief, charitable and philanthropic organisations approved by Swedish Customs.
You apply to Swedish Customs for exemption from customs duties. The exemption applies retroactively to imports made from 30 January to 31 July 2020. Imports that are exempt from customs duties under these regulations are also exempt from VAT. If you are registered for VAT on imports, the Swedish Tax Agency will assess the issue of VAT exemption, but you must first apply to Swedish Customs for exemption from customs duties in order to be granted VAT exemption.
One condition is that you use the import goods to combat COVID-19. If you have been granted exemption from customs duties on imports, but subsequently do not intend to use the goods for this purpose, please notify Swedish Customs. In most cases, you will then have to pay customs duties and VAT on the goods. Exceptions may apply.
Read more about the requirements for exemption from customs duty and VAT on the website of Swedish Customs.
Gift cards from municipalities
In some cases, municipalities can buy gift cards to give to employees without incurring VAT on such purchases.
If a municipality buys gift cards
A municipality buys gift cards that can be used in several local shops (multipurpose vouchers) to give to its employees. The sale of such gift cards to the municipality is not subject to VAT, since the obligation to pay VAT arises only when goods or services are provided.
If the municipality provides its own gift cards
A municipality provides employees with its own gift cards, which can be used in several local shops (multipurpose vouchers). When a shop requests reimbursement for a gift card from a municipality, the reimbursement is not subject to VAT. The obligation to pay VAT arises when goods or services are provided. In other words, when an employee uses a gift card to buy goods or a service at a shop.
The VAT consequences vary, depending on how a gift card can be used. For a gift card that allows the recipient to choose between goods or services with different VAT rates, no VAT will be charged until the recipient uses the gift card and the applicable VAT rate can be determined.
More information is available in the “Legal guidance” section.
Customer losses and cancelled events
Customer losses
Many companies are currently experiencing payment problems, and the risk of unpaid invoices is greater than usual. The Swedish Tax Agency will take this into account when assessing customer losses, and will approve a reduction in output VAT in more cases than previously.
If one of your customers has a payment problem, there are two things to consider:
- The first is how to book the claim in your accounts. There you need to make provision for a loss when the invoice is overdue for payment and you have sent out reminders.
- The second is when you have an established customer loss, since you can then reduce the output VAT that you have previously reported.
For a customer loss to be established, it is usually required, for example, that the customer is bankrupt or that the Swedish Enforcement Agency (“Kronofogden”) has tried to recover the debt but no seizable assets were available. In you are in this economic situation, you can reduce output VAT if all the following conditions are met:
- The customer is a taxable person (i.e. runs his or her own business); private individuals are not counted in this context.
- At least three months have passed since the invoice should have been paid.
- You have sent out a written payment reminder (by post or email).
- There must be no associated enterprise between you and the customer.
Note that this provision applies only to invoices issued between 1 February and 31 December 2020.
Keep in mind that the reduction in turnover and output VAT must be reported for the month during which you can establish a customer loss. You should not therefore request a review for the month during which you reported the VAT. This may mean that you report negative turnover and outgoing VAT if the rest of the turnover for that month is lower than the customer loss.
Example:
Kenta AB sold goods to ZIB AB in early February, and the invoice was due to be paid by 16 February 2020. Kenta AB reported sales turnover of SEK 20,000 and output VAT of SEK 5,000 in its VAT return for February. ZIB AB did not pay for the goods despite several written reminders. According to the new provisions, Kenta AB will report the customer loss in its VAT return for May (three months later). In the VAT return, the company will reduce its turnover by SEK 20,000 and its output VAT by SEK 5,000. Since Kenta AB’s turnover is zero in May, it will report SEK -20,000 (a negative amount) as turnover and SEK -5,000 (a negative amount) as output VAT for that period.
Reimbursement due to cancelled events
What happens if a municipality makes a reimbursement for an event that is cancelled due to the COVID-19 pandemic?
When a municipality makes such a reimbursement, it must issue a credit invoice if the event relates to a VAT-liable business. The credit invoice should include a specific reference to the original invoice.
Temporary support for rental costs
Landlords who agree with their tenants on a reduction of the fixed part of the rent can, under certain conditions, receive compensation from the state. The compensation is paid out by the County Administrative Board (“Länsstyrelsen”) and is provided at 50% of the agreed reduction, but not more than 25% of the original rent.
The Swedish Tax Agency considers the compensation to be a subsidy directly linked to rental costs. It must therefore be included in the compensation when calculating the taxable amount.
Subsidised gift cards for the public
If the municipality offers subsidised gift cards to the public, these are not considered as a benefit linked to employment, and are therefore not taxed as salary.
More detailed information about VAT in relation to the COVID-19 pandemic has been gathered in the “Legal guidance” section (in Swedish).
Payment liability for legal entities’ unpaid taxes and charges
If you represent a company (a legal entity), you will normally be personally liable for the company's unpaid taxes and charges. This is known as having representative responsibility. The Swedish Tax Agency will not charge you with this liability for tax debts that are subject to temporary payment respite due to the effects of the COVID-19 pandemic.
However, this exception does not apply to persons who are clearly attempting to avoid their representative responsibility.
Checks and controls by the Swedish Tax Agency during the COVID-19 pandemic
Part of the Swedish Tax Agency’s assignment is to carry out checks and controls at companies. Employees who carry out external physical visits in connection with tax controls and other assignments must follow the recommendations of the Public Health Agency of Sweden (“Folkhälsomyndighetens”) and other authorities with regard to the COVID-19 pandemic. We follow the recommendations regarding social distancing, hand hygiene and staying at home in case of the slightest symptoms.
Time point for tax deduction regarding repayment of a business subsidy
The Swedish Tax Agency will not, on its own initiative, investigate the date of a deduction for repayment of a business subsidy in the income tax return for tax years ending during the period 1 March 2020 to 31 August 2022 (for further details, please refer to the applicability information relating to the Swedish Tax Agency’s position on repayment of business subsidies).
If you have any questions
Please call the tax information service: 0771 567 567.
At the moment, our service centres have variable opening times. Some of our service centres are currently closed. You are welcome to visit one of our service centres if you have no symptoms.
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