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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.
COVID-19 reorientation support
The Swedish Government has decided that companies that have suffered a considerable loss of net turnover due to the COVID-19 pandemic can apply for reorientation support.
Tax-payment respite extensions
The Swedish parliament (“Riksdag”) has decided that companies affected financially by COVID-19 can apply for temporary payment respite in connection with employer contributions, deducted tax and VAT. Payment respite can be granted for up to one year from the date of the Swedish Tax Agency’s decision notification. It is possible to apply for a one-year extension of the respite period when it ends. Payment respite, including an extension period, can run until 12 March 2023.
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 cooperative housing associations
- non-profit organisations, tax-exempt 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.
How to declare your reorientation support allowance
You must declare your 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 operation that is subject to VAT 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 reorientation support has been entered as a form of income in your accounts for the year that the decision regarding the allowance was made, but you decide to declare it in your tax return for the year during which you incurred the cost, you must adjust the figures in your income tax return accordingly to ensure that you pay the correct amount of tax.
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 of reorientation support: example
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 your business has received financial help from the Swedish Government, the EU, or any regional or municipal authority, this counts as a subsidy according to section 29 of the Swedish Income Tax Act. Whether or not you have to enter 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 grants awarded to cover operating expenses or to compensate for lost revenue should be declared as “other operating income” for your company. This means that you must enter the amount granted in box R1 or box 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 operation that is subject to VAT 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 are taxed on 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 the year that 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 rule regarding 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, the tax figures must not be adjusted.
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 deduction for the amount repaid. 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 (unregulated debt), you must make a tax adjustment to obtain the correct result for tax purposes.
There is no particular tax rule governing when a deduction for turnover-based support should be claimed. This means that the general rule regarding good accounting practice will determine when you should claim a deduction on repayment. 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.
Repayment: example
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 recorded 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 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 ways for you to get financial support for the employee costs you incur.
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 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.
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 at least 18 but under 23 at the start of the year.
The new rules mean that the employer contributions you have to pay in 2021 for employees born between 1998 and 2002 will be reduced. The law came into force on 1 January 2021, and it applies to salaries paid for work 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.
If you filed your PAYE return for January 2021 (by the 12 or 26 February 2021 deadline) before the law came into force, you can ask us to review the return by filing it again. We will then correct the employer contributions.
Temporary extra reduction of employer contributions for young people between June and August 2021
The Swedish parliament has decided that employer contributions for young people will be 10,21 percent for salaries paid out in June, July, and August 2021. It only applies to salaries up to SEK 25,000. For higher salaries full employer contributions of 31,42 percent still applies.
You, as employer, do not need to apply for this. The correct employer contributions will be automatically calculated when you file the PAYE online.
However, if you filed PAYE for salaries paid out before 19 June 2021 you need to file again to get the correct employer contributions. This is because the change came into force on 19 June 2021.
Remember to file a PAYE return if you are a registered employer – even for the months during which you have not paid any salaries. You can do this by submitting a PAYE tax return with only the combined contributions and deductions (“huvuduppgiften”) filled in. Alternatively, you can write to the Swedish Tax Agency stating that you have not paid any salaries for work. If you don’t submit either, you might be charged a late filing fee.
If you are registered as an employer on a seasonal basis, you only have to file a PAYE return for the months during which you have paid your employees a salary. You have to file a PAYE return at least once a year.
The rules on the temporary reduction of employer contributions (“growth support” or “växa-stöd”) apply – as they did previously – to sole proprietorships hiring their first employee.
The Swedish Agency for Economic and Regional Growth’s short-time work programme
Short-time work allowance – often referred to as furlough (“korttidspermittering” or “permittering” in Swedish) allows employers to reduce employees’ working hours and receive help from the Swedish Government to cover a large proportion of their salary costs. You apply to Swedish Agency for Economic and Regional Growth for this allowance. You declare the salaries that you have paid out 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.
Examples: how to calculate your employer contributions if you receive 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’ salaries will be reduced by 7.5% until 30 June 2021.
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 VAT 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 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 June 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 June 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
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 the current financial year. 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 the financial year. 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.
Get a refund on preliminary tax paid during 2020 – change your preliminary tax return for 2020
If you cannot wait until June 2021 for a tax refund, you can even adjust your preliminary tax for 2020 – i.e.: the tax that you paid on a regular basis last year. You can then have any tax that you have already paid refunded.
File a new preliminary income tax return for 2020, entering the same details as those you include in your normal income tax return. It is important to declare the same results in both returns so that the correct amount is refunded. In this way, your preliminary tax for last year will be adjusted retroactively. Remember, if you get money back by changing your preliminary tax for last year, your tax refund will be reduced by the same amount. For example, if you get SEK 30,000 back after your preliminary tax has been changed, your tax refund will be reduced by the same amount.
You can file a new preliminary income tax return for 2020 up to and including 30 June 2021.
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.
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 Swedish Tax Agency’s decision, with the possibility of a maximum extension of one additional year. To be granted an extension, you must submit a new application for payment respite. The easiest way to do this is via “My pages” (“Mina sidor”).
There is no deadline for applications. Payment respite, including an extension period, can run until 12 February 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. In the case of VAT reported for the full year, the respite period with an extension may run until 17 January 2024 at the latest.
You pay interest on the amount on which you are granted payment respite. After six months, a respite fee is also payable. You pay the interest and respite fee when you pay the tax or contributions on which payment has been deferred.
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 so 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 1.25% interest on the respite amount.
Do you wish to extend your payment respite period?
If you have previously applied for and been granted temporary payment respite, but not for the whole maximum one-year period, 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. The Swedish Tax Agency will treat your application as a new case, and will send you a new decision notification.
You can apply directly via our e-service, or by logging in to “My pages” (“Mina sidor”).
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 (month(s)) 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 lay down terms and conditions that must be fulfilled by members to secure the right to compensation. Since these vary, you need to check with your unemployment insurance provider which terms and conditions apply to you.
One condition that sometimes must be fulfilled is that a company has to be dormant. The term dormant cannot be used for tax purposes; in other words, a company cannot be registered as dormant. It is, however, possible to put your operations on hold; 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, however, two important things to consider.
You cannot put operations on hold for an unlimited period because your business might then be considered closed and liable for taxation as a result.
If you put your operations on hold 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 getting the business up and running again at a certain point.
It is important to remember that you have tax liabilities outstanding, even when your business is at a standstill. Provided that your business has not closed completely, and you intend to run it again, you must:
- account for and declare your business in your income tax return, even if you have zero to account for
- report VAT as long as the company is registered for VAT, even if no purchases or sales have been made (find out more about the matter of VAT when a business is inactive under “Have you interrupted your business activities?”
- declare your employer contributions, as long as your company is a registered employer – even if you have not paid any salaries or other forms of compensation
Example
Jelena runs an advertising agency, and her customers 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 put her business activities on hold until the demand for her services increases.
In December, she starts working with her advertising agency a little again when an old customer gets in touch regarding an event scheduled to take place around Easter.
The fact that Jelena has interrupted her activities does not mean that she has closed her business; it simply means that she has taken a break. Despite the fact that her business was inactive for several months, Jelena filed her VAT and income tax returns with zeros entered in the relevant boxes. She will obviously file her next income tax return by 3 May at the latest.
If you still wish to close and deregister your business, you can find out more here:
VAT
Certain particular 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 a 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 (“Bokföringsnämnden”) has therefore collected its answers to frequently asked questions about this on its website.
Are you unable to file Income Tax Return 1 on time?
If you will not be able to file your income tax return on time, you must apply for respite by 3 May 2021. You can do this on “My pages” (“Mina sidor”) using your Swedish BankID. Alternatively, you can call the Swedish Tax Agency if you prefer.
If you are granted respite, your income tax return must be submitted by 31 May at the latest. If you report VAT on an annual basis, please note that this respite does not apply to your VAT return. Your annual VAT return must be submitted by 12 May at the latest.
If an accountancy firm assists you with your income tax return, it may be possible for this firm to apply for respite. If so, please contact your accountancy firm about this.
Limited companies, economic associations and tenant-owner associations
Here we present different situations relating to taxation for limited companies, economic associations and tenant-owner associations.
How to account for reorientation support in your bookkeeping records
You must book reorientation support as “other operating income”. This means that you enter the allowance in box 3.4 of Income Tax Return 2.
If the allowance has been entered in your accounts as revenue for the year during which the allowance was granted, but you choose to declare the allowance in your income tax return 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 necessary 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 Tax Return 2.
Examples: repayment of reorientation support
A limited company received a reorientation support allowance of SEK 200,000 on 20 July 2020. This amount was for the allowance period March to April 2020. The company’s financial year ran from 1 January to 31 December 2020. In December 2020, the company announced to its shareholders that a decision would be made on a dividend at the Annual General Meeting in February 2021. Since the company already knew in December 2020 that it would not meet all the eligibility criteria for reorientation support, it entered the allowance that it had been paid as a liability – rather than as revenue – in the annual accounts. This was in accordance with good accounting practice. The company notified the Swedish Tax Agency of the situation and received a decision notification in March 2021 stating that it would have to repay the allowance, which it did.
Since the company did not enter the allowance received as revenue in its accounts, it needs to make a tax adjustment of SEK 200,000 in box 4.6e of its income tax return for 2020. The company repaid the allowance in 2021, and will claim a deduction for the amount repaid in its 2021 income tax return. This should be done by making a tax adjustment in box 4.4b because the company has not entered the repayment as a cost in its accounts for 2021.
When should details of other COVID-19 allowances be included in your income tax return?
Business subsidies
If your business has received support from the Swedish Government, the EU, or any Swedish regional or municipal authority, for example, 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 the following:
- 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”)
- compensation for high sick pay costs from the Swedish Social Insurance Agency (“Försäkringskassan”).
As a rule, good accounting practice will determine the tax point for business subsidies. If you have received a subsidy to cover an expense that you incurred in the past tax year, for which a deduction is to be claimed 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 match the expense with the revenue. You will then have to make tax adjustments in your tax return.
Example
The company received the subsidy in December 2020 and accounted for it as a revenue item. Following good accounting practice, the company also entered the subsidy as a revenue item 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 were booked as expenses in August 2020, but the company may choose to claim a deduction for them 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 since the deduction should not be claimed for that year.
A limited company received emergency 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. When the company was preparing its annual accounts, there had not been a decision from the government regarding emergency support. The company had not received any subsidy and could not therefore account for this as a revenue item in accordance with good accounting practice.
Repayment
If you have repaid all or part of a taxable business subsidy, you should claim a deduction for the amount repaid. 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 (unregulated debt), you must make a tax adjustment to obtain the correct result for tax purposes.
Example: repayment
A limited company received a preliminary short-time work allowance payment of SEK 30,000 for the May to July 2020 period. Following account reconciliation 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 need for this repayment meant that the company’s other operating income decreased by SEK 20,000 in its accounting records. 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 figure of SEK 10,000, which is equivalent to the final subsidy entitlement.
Do you have employees?
There are several ways for you to get financial support for the employee costs you incur.
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 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.
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 at least 18 but under 23 at the start of the year.
The new rules mean that the employer contributions you have to pay in 2021 for employees born between 1998 and 2002 will be reduced. The law came into force on 1 January 2021, and it applies to salaries paid for work 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.
If you filed your PAYE return for January 2021 (by the 12 or 26 February 2021 deadline) before the law came into force, you can ask us to review the return by filing it again. We will then correct the employer contributions.
Temporary extra reduction of employer contributions for young people between June and August 2021
The Swedish parliament has decided that employer contributions for young people will be 10,21 percent for salaries paid out in June, July, and August 2021. It only applies to salaries up to SEK 25,000. For higher salaries full employer contributions of 31,42 percent still applies.
You, as employer, do not need to apply for this. The correct employer contributions will be automatically calculated when you file the PAYE online.
However, if you filed PAYE for salaries paid out before 19 June 2021 you need to file again to get the correct employer contributions. This is because the change came into force on 19 June 2021.
Remember to file a PAYE return if you are a registered employer – even for the months during which you have not paid any salaries. You can do this by submitting a PAYE tax return with only the combined contributions and deductions (“huvuduppgiften”) filled in. Alternatively, you can write to the Swedish Tax Agency stating that you have not paid any salaries for work. If you don’t submit either, you might be charged a late filing fee.
If you are registered as an employer on a seasonal basis, you only have to file a PAYE return for the months during which you have paid your employees a salary. You have to file a PAYE return at least once a year.
The rules on the temporary reduction of employer contributions (“growth support” or “växa-stöd”) apply – as they did previously – to sole proprietorships hiring their first employee.
The Swedish Agency for Economic and Regional Growth’s short-time work programme
Short-time work allowance – often referred to as furlough (“korttidspermittering” or “permittering” in Swedish) allows employers to reduce employees’ working hours and receive help from the Swedish Government to cover a large proportion of their salary costs. You apply to Swedish Agency for Economic and Regional Growth for this allowance. You declare the salaries that you have paid out 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.
Examples: how to calculate your employer contributions if you receive 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’ salaries will be reduced by 7.5% until 30 June 2021.
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 VAT 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 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 June 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 June 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
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 the current financial year. 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 the financial year. 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.
Preliminary tax refunds for companies that have paid too much during the past financial year: adjust the preliminary tax return for the financial year
If it turns out that a company paid too much preliminary tax during the past financial year, a refund of the excess amount can be obtained by adjusting the preliminary tax for that year.
If you have recently filed your company’s income tax return, or are about to do so, you can choose to wait for the result. Then, if the company is due a tax refund, you can file a new preliminary income tax return for the past year using the same details and results.
By submitting a new preliminary income tax return, you can have the preliminary tax for the past financial year adjusted retroactively, and be granted a refund of any excess paid.
You can file a new preliminary income tax return up to six months after the end of the past 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 your company to achieve. This estimate will serve as a basis for calculating the preliminary tax that your company will be due to pay next year.
You can file a preliminary income tax return via our e-service or by filling in 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:
- 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 respite amount. You also pay a monthly respite fee after the first six months. The current fee has been set at a reduced rate, but it applies to temporary payment respite granted from 30 March 2021.
Neither the interest nor the fee is tax deductible for the 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 Swedish Tax Agency’s decision, with the possibility of a maximum extension of one additional year. To be granted an extension, you must submit a new application for payment respite. The easiest way to do this is via “My pages” (“Mina sidor”).
There is no deadline for applications. Payment respite, including an extension period, can run until 12 March 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. In the case of VAT reported for the full year, the respite period with an extension may run until 17 January 2024 at the latest. All temporary respite granted will expire by these dates; in some cases, a late application may therefore mean that you do not receive the maximum respite period of two years.
Which reporting periods does the respite apply to?
You can apply for a respite period of up to six months if you report VAT monthly (seven months for employer contributions and deducted tax), or for two quarters if you report quarterly. The respite must relate to periods between January 2020 and January 2021. This means it applies to taxes and other contributions that you report for these months. The first month for which you can be granted respite is January 2020: i.e. the VAT you reported by 12 March 2020 at the latest (if you report monthly) or the employer contributions/deducted tax you reported in February 2020. It is therefore not the point at which taxes and other charges are due to be paid that determines whether you can be granted respite, but rather the month in which they were incurred. You can also apply for respite if you report VAT once a year.
If possible, please apply for respite when you file your VAT or PAYE tax return.
Please note: in order to be granted payment respite for a given month, you must have already filed your VAT or PAYE tax return for that month. It is therefore easiest to apply for payment respite at the same time as you file your return.
Payment respite: interest and fee
You pay interest at 1.25% on an annual basis on the respite amount.
You also pay a respite fee. For extension applications received before 5 February 2021, the previous provisions apply: you pay the respite fee each calendar month starting from the seventh month after the respite was granted.
For applications received on 5 February 2021 and after, the new provisions apply: you pay the respite fee each calendar month from the first month after the respite was granted.
The monthly respite fee is 0.1% of the respite amount. You pay the interest and the respite fee at the same time as you pay the tax or other charges that you have deferred.
Neither the interest nor the fee is tax deductible for your business.
Do you wish to extend your payment respite period?
If you have previously applied for and been granted temporary payment respite, but not for the whole maximum one-year period, 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. The Swedish Tax Agency will treat your application as a new case, and will send you a new decision notification.
You can apply directly via our e-service, or by logging in to “My pages” (“Mina sidor”).
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 (month(s)) for which respite was granted
- the date from which you wish respite to be withdrawn
VAT
Certain particular 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 a 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 (“Bokföringsnämnden”) has therefore collected its answers to frequently asked questions about this on its website.
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.
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.
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.
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 at least 18 but under 23 at the start of the year.
The new rules mean that the employer contributions you have to pay in 2021 for employees born between 1998 and 2002 will be reduced. The law came into force on 1 January 2021, and it applies to salaries paid for work 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.
If you filed your PAYE return for January 2021 (by the 12 or 26 February 2021 deadline) before the law came into force, you can ask us to review the return by filing it again. We will then correct the employer contributions.
Temporary extra reduction of employer contributions for young people between June and August 2021
The Swedish parliament has decided that employer contributions for young people will be 10,21 percent for salaries paid out in June, July, and August 2021. It only applies to salaries up to SEK 25,000. For higher salaries full employer contributions of 31,42 percent still applies.
You, as employer, do not need to apply for this. The correct employer contributions will be automatically calculated when you file the PAYE online.
However, if you filed PAYE for salaries paid out before 19 June 2021 you need to file again to get the correct employer contributions. This is because the change came into force on 19 June 2021.
Remember to file a PAYE return if you are a registered employer – even for the months during which you have not paid any salaries. You can do this by submitting a PAYE tax return with only the combined contributions and deductions (“huvuduppgiften”) filled in. Alternatively, you can write to the Swedish Tax Agency stating that you have not paid any salaries for work. If you don’t submit either, you might be charged a late filing fee.
If you are registered as an employer on a seasonal basis, you only have to file a PAYE return for the months during which you have paid your employees a salary. You have to file a PAYE return at least once a year.
The rules on the temporary reduction of employer contributions (“growth support” or “växa-stöd”) apply – as they did previously – to sole proprietorships hiring their first employee.
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 June 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 June 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 to defer payment of your company’s taxes by being granted respite, even though the amount due is correct?
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 Swedish Tax Agency’s decision, with the possibility of a maximum extension of one additional year. To be granted an extension, you must submit a new application for payment respite. The easiest way to do this is via “My pages” (“Mina sidor”).
There is no deadline for applications. Payment respite, including an extension period, can run until 12 March 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. In the case of VAT reported for the full year, the respite period with an extension may run until 17 January 2024 at the latest. All temporary respite granted will expire by these dates; in some cases, a late application may therefore mean that you do not receive the maximum respite period of two years.
Which reporting periods does the respite apply to?
You can apply for a respite period of up to six months for VAT (seven months for employer contributions and deducted tax) if you report monthly, or for two quarters if you report quarterly. The respite must relate to periods between January 2020 and January 2021. This means it applies to taxes and other charges that you report for these months. The first month for which you can be granted respite is January 2020: i.e. the VAT you reported by 12 March 2020 at the latest (if you report monthly) or the employer contributions/deducted tax you reported in February 2020. It is therefore not the point at which taxes and other charges are due to be paid that determines whether you can be granted respite, but rather the month in which they were incurred. You can also apply for respite if you report VAT once a year.
If possible, please apply for respite when you file your VAT or PAYE tax return.
Please note: in order to be granted payment respite for a given month, you must have already filed your VAT or PAYE tax return for that month. It is therefore easiest to apply for payment respite at the same time as you file your return.
Payment respite: interest and fee
You pay interest at 1.25% on an annual basis on the respite amount.
You also pay a respite fee. For extension applications received before 5 February 2021, the previous provisions apply: you pay the respite fee each calendar month starting from the seventh month after the respite was granted.
For applications received on 5 February 2021 and after, the new provisions apply: you pay the respite fee each calendar month from the first month after the respite was granted.
The monthly respite fee is 0.1% of the respite amount. You pay the interest and the respite fee at the same time as you pay the tax or other charges that you have deferred.
Neither the interest nor the fee is tax deductible for your business.
Do you wish to extend your payment respite period?
If you have previously applied for and been granted temporary payment respite, but not for the whole maximum one-year period, 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. The Swedish Tax Agency will treat your application as a new case, and will send you a new decision notification.
You can apply directly via our e-service, or by logging in to “My pages” (“Mina sidor”).
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 (month(s)) 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 ways for you to get financial support for the employee costs you incur.
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 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.
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.
Payment of parking tickets
If an employer pays parking tickets incurred by an employee – for example, because working hours have been extended due to higher workloads associated with the COVID-19 pandemic – this counts as a benefit. Payment of parking tickets is a taxable benefit. The only exception made is for emergency services staff in connection with callout.
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 at least 18 but under 23 at the start of the year.
The new rules mean that the employer contributions you have to pay in 2021 for employees born between 1998 and 2002 will be reduced. The law came into force on 1 January 2021, and it applies to salaries paid for work 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.
If you filed your PAYE return for January 2021 (by the 12 or 26 February 2021 deadline) before the law came into force, you can ask us to review the return by filing it again. We will then correct the employer contributions.
Temporary extra reduction of employer contributions for young people between June and August 2021
The Swedish parliament has decided that employer contributions for young people will be 10,21 percent for salaries paid out in June, July, and August 2021. It only applies to salaries up to SEK 25,000. For higher salaries full employer contributions of 31,42 percent still applies.
You, as employer, do not need to apply for this. The correct employer contributions will be automatically calculated when you file the PAYE online.
However, if you filed PAYE for salaries paid out before 19 June 2021 you need to file again to get the correct employer contributions. This is because the change came into force on 19 June 2021.
Remember to file a PAYE return if you are a registered employer – even for the months during which you have not paid any salaries. You can do this by submitting a PAYE tax return with only the combined contributions and deductions (“huvuduppgiften”) filled in. Alternatively, you can write to the Swedish Tax Agency stating that you have not paid any salaries for work. If you don’t submit either, you might be charged a late filing fee.
If you are registered as an employer on a seasonal basis, you only have to file a PAYE return for the months during which you have paid your employees a salary. You have to file a PAYE return at least once a year.
The rules on the temporary reduction of employer contributions (“growth support” or “växa-stöd”) apply – as they did previously – to sole proprietorships hiring their first employee.
Short-time work allowance from the Swedish Agency for Economic and Regional Growth (“Tillväxtverket”)
Short-time work allowance – often referred to as furlough (“korttidspermittering” or “permittering” in Swedish) allows employers to reduce employees’ working hours and receive help from the Swedish Government to cover a large proportion of their salary costs. You apply to Swedish Agency for Economic and Regional Growth for this allowance. You declare the salaries that you have paid out 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.
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
The handball association Klistret has agreed with its employees that their working hours will be reduced by 60%. According to the rules on short-time work, the Swedish Government will cover 45% of salary costs, and employees’ salaries will be reduced by 7.5%.
The coach, Carina, has a normal salary of SEK 30,000 per month.
Her new monthly salary during short-time work will be SEK 27,750 (SEK 30,000 minus 7.5% of SEK 30,000). The association must calculate and pay employer contributions based on the actual gross salary paid: SEK 27,750. The association will declare Carina’s new gross salary of SEK 27,750 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 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 June 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 June 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 and contributions?
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 Swedish Tax Agency’s decision, with the possibility of a maximum extension of one additional year. To be granted an extension, you must submit a new application for payment respite. The easiest way to do this is via “My pages” (“Mina sidor”).
There is no deadline for applications. Payment respite, including an extension period, can run until 12 March 2023 at the latest for employer contributions, deducted tax and VAT reported monthly or quarterly. In the case of VAT reported for the full year, the respite period with an extension may run until 17 January 2024 at the latest. All temporary respite granted will expire by these dates; in some cases, a late application may therefore mean that you do not receive the maximum respite period of two years.
Which reporting periods does the respite apply to?
You can apply for a respite period of up to six months for VAT (seven months for employer contributions and tax deductions) if you report monthly, or for two quarters if you report quarterly. The respite must relate to periods between January 2020 and January 2021. This means it applies to taxes and other contributions that you report for these months. The first month for which you can be granted respite is January 2020: i.e. the VAT you reported by 12 March 2020 at the latest (if you report monthly) or the employer contributions/deducted tax you reported in February 2020. It is therefore not the point at which taxes and other charges are due to be paid that determines whether you can be granted respite, but rather the month in which they were incurred.
You can also apply for respite if you report VAT once a year.
If possible, please apply for respite when you file your VAT or PAYE tax return.
Please note: in order to be granted payment respite for a given month, you must have already filed your VAT or PAYE tax return for that month. It is therefore easiest to apply for payment respite at the same time as you file your return.
Payment respite: interest and fee
You pay interest at 1.25% on an annual basis on the respite amount.
You also pay a respite fee. For extension applications received before 5 February 2021, the previous provisions apply: you pay the respite fee each calendar month starting from the seventh month after the respite was granted.
For applications received on 5 February 2021 and after, the new provisions apply: you pay the respite fee each calendar month from the first month after the respite was granted.
The monthly respite fee is 0.1 of the respite amount. You pay the interest and the respite fee at the same time as you pay the tax or other contributions that you have deferred.
Neither the interest nor the fee is tax deductible for your business.
Do you wish to extend your payment respite period?
If you have previously applied for and been granted temporary payment respite, but not for the whole maximum one-year period, 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. The Swedish Tax Agency will treat your application as a new case, and will send you a new decision notification.
You can apply directly via our e-service, or by logging in to “My pages” (“Mina sidor”).
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 (month(s)) for which respite was granted
- the date from which you wish respite to be withdrawn
Questions about refund applications, requisitions and other VAT-related 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, a common requirement is, for example, that the customer is bankrupt or that the Swedish Enforcement Agency (“Kronofogden”) has tried to recover the debt but no seizable assets are available. If you are in this economic situation, you can reduce output VAT, provided that all the following conditions are fulfilled:
- 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. In addition, we avoid any unnecessary travel.
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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