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Reorientation support for August 2020 to April 2021
Reorientation support (“omställningsstöd”) is a form of financial allowance or subsidy offered to companies that suffered a significant decline in turnover in five periods during 2020 and 2021 (compared with the corresponding periods in 2019). The periods are: August to October 2020, November to December 2020, January to February 2021, March 2021 and April 2021. This decline in turnover must almost exclusively have been a consequence of the COVID-19 pandemic.
How do I apply?
You apply for the reorientation support by logging into "My pages" ("Mina sidor"). You will need to make a separate application for each period for which you wish to claim support.
Allowance period | Apply by |
|---|---|
August to October 2020 | April 30 2021 |
November to December 2020 | April 30 2021 |
January to February 2021 | April 30 2021 |
March 2021 | June 30 2021 |
April 2021 (you can apply from May 3) | June 30 2021 |
You can check whether your application has arrived and review the supplied details by logging into “My pages” (“Mina sidor”).
Ansök om omställningsstöd på Mina sidor
Which company representatives can apply for reorientation support?
Applications can only be made by an authorised representative.
- Sole traders or sole signatories can apply for reorientation support for a company. You can also appoint a representative (a reorientation support representative) who can apply on your behalf.
- An authorised company representative, such as the CEO or a special signatory, can apply for reorientation support. An authorised company representative can also appoint a reorientation support representative.
- If a company has several joint signatories, a representative is required. All signatories are required to sign a document notifying the Swedish Tax Agency of the company’s appointed representative.
How to register a representative
You can appoint and register a representative to deal with your reorientation support application on your behalf. Your representative must have a Swedish personal identity number and Swedish e-identification. Your representative must be registered with the Swedish Tax Agency by 30 April 2021 at the latest for the support from August 2020 to February 2021 and by 30 June 2021 for the support from March to April 2021. Please complete the registration process well in advance of this date. The easiest way to register a representative is via our e-service “Representatives and authorisation” (“Ombud och behörigheter”).
If any individual among a company’s authorised signatories does not have a Swedish personal identity number, it is not possible to use our e-service. The company’s representative has to be registered by filling in a paper form instead. It’s important to do this in good time since the registration process will take longer for the Swedish Tax Agency to complete.
- Register a reorientation support representative by filling in a form on paper (SKV 8055, in Swedish)
Companies that have already appointed a representative for a previous reorientation support application do not need to do so again, provided that authorisation was not limited to a specific period that has already ended. Representatives can view the authorisation that they have been granted by logging in to “My pages” (Mina sidor).
Companies belonging to a corporate group
If several companies within a corporate group are going to apply for reorientation support, all applications should be submitted at the same time. Each company’s application is completed and signed according to the normal procedure, but a company cannot submit its own application. The group must nominate one person as the group applicant (“koncerningivare”), and this person will submit all applications for companies within the group using a special e-service accessible via “My pages” (“Mina sidor”).
You may need a statement from your accountant
If you apply for at least SEK 100,000 in reorientation support, you must include a written statement to support the details provided, which must be issued by a registered auditing firm or an authorised accountant. You must include a written statement for each allowance period for which you are applying for at least SEK 100,000 in orientation support.
If the written statement cannot be issued by the closing date for reorientation support applications, you can send it at a later date. If you apply for at least SEK 100,000 in reorientation support and do not include this written statement, the Swedish Tax Agency will contact you with a request and provide instructions for submitting the statement at a later date. You will normally be expected to provide the statement within 14 days of a request.
Making changes to an application
You must contact the Swedish Tax Agency if you discover errors in the information you have provided, or if changes take place that could affect either your right to reorientation support or the size of your allowance. You might, for example, have received an insurance payment, financial compensation or some other form of support intended to cover any fixed cost used to calculate your reorientation support.
You can get in touch with us in one of the following ways:
- E-mail the Swedish Tax Agency
- Send a letter to:
Skatteverket
171 94 Solna
Which company representatives can complement or make changes to an application that has been submitted?
The following parties can complement or make changes to a submitted application:
- a sole trader or a company’s sole signatory
- an authorised company representative such as the CEO or special signatory
- a reorientation support representative
How and when will the money be paid out?
The Swedish Tax Agency’s aim is to pay out reorientation support about one week after receiving a company’s application – provided that the application is complete and we consider there to be no risk of overpayment. The allowance is credited to a company’s tax account with the Swedish Tax Agency and then paid out automatically to the company’s bank account if this has been registered in advance. This is on condition that the company does not have any deficit on its tax account.
Which companies can get reorientation support?
The rules differ depending on whether you are applying for reorientation support for August to October 2020, November to December 2020 or January to February 2021. We have outlined the relevant information for each allowance period below.
You will find information at the bottom of the page about items that are classified as fixed costs, and this information applies to all three allowance periods.
Reorientation support rules for the August 2020 to April 2021 period
In order to qualify for reorientation support, a company must have reported a net turnover of at least SEK 250,000 during the financial year ending closest to 1 May 2020. If that financial year was longer or shorter than 12 months, the required minimum net turnover will be adjusted accordingly.
The minimum amount of reorientation support that can be granted is SEK 5,000. There are several factors that help to determine the size of a company’s allowance. If a company is a loss-making enterprise, it cannot be granted support amounting to more than the nominal decline in the gross margin for the allowance period compared with the reference period.
Applications must be made by 30 April 2021 for the periods August to October 2020, November to December 2020 and January to February 2021. Applications must be made by 30 June for the periods March 2021 and April 2021.
In order to qualify for reorientation support, a company must have suffered a significant decline in net turnover compared with the previous year. The rates of decline for the five different allowance periods are as follows:
Allowance period | Decline in net turnover |
|---|---|
August to October 2020 | more than 40% |
November to December 2020 | more than 30% |
January to February 2021 | more than 30% |
March 2021 | more than 30% |
April 2021 | more than 30% |
This decrease in a company’s turnover must almost exclusively have been a consequence of the COVID-19 pandemic.
In addition, the company must:
- be running a business in Sweden at the time its application is considered
- have F-tax certification
Tax-exempt foundations, associations, private housing associations and registered religious organisations do not need to be F-tax certified. To qualify for support, non-profit organisations must have a corporate identity number that was issued on 31 December 2019 at the latest. Private-sector housing associations do not need to be F-tax certified.
If a company is not F-tax certified, you must apply and be granted approval for it before applying for reorientation support.
Companies that are partially liable for tax in Sweden can only be granted reorientation support if they have a permanent establishment in Sweden. Companies based in countries that are considered non-cooperative with regard to taxation cannot receive support. In some cases, a company may not qualify for reorientation support if it belongs to the same group of associated enterprises as a company based in a country that is non-cooperative with regard to taxation.
There are specific rules for businesses that have restructured from sole-trader to limited company between 1 August 2019 and 31 July 2020.
What is net turnover?
Net turnover includes revenue from the sale of goods and services that are part of a company’s normal business. You must make deductions for discounts provided, VAT and any other forms of tax that are directly connected to turnover. All revenue must relate to a business run in Sweden, and no revenue may be generated from financial instruments or the trade of foreign currency.
When net turnover is calculated, revenue must be considered to be associated with the calendar month it would have referred to if every calendar month had constituted a separate financial year for the company in question. The company must apply the accounting principles that it applied for the financial year ending closest to 1 May 2020.
Companies in financial difficulty cannot be granted support
When assessing whether a company is having financial difficulties, we consider its situation at the following two points in time:
- on 31 December 2019
- when an application for reorientation support is reviewed
To qualify for reorientation support, a company must not have been in financial difficulty at either of these two points in time. This means that a company does not have a right to support if, for example: on 31 December 2019, it was obliged to draw up a balance sheet for liquidation purposes, and the balance sheet shows that more than half of the share capital at the time had been used up due to accumulated losses.
In addition, a company does not have a right to support if it:
- can be considered insolvent
- has been disqualified from engaging in business activities
- has debts in the form of unpaid taxes or fees that have been handed over to the Swedish Enforcement Agency (“Kronofogden”) for recovery
- is subject to outstanding recovery orders on the basis of an earlier EU Commission decision that has declared the provision of support to be illegal and incompatible with the internal market
If a company is a legal entity, neither the company nor the natural persons who have significant influence within the business can be barred from engaging in business operations.
Payment decisions, allocation, etc.
To qualify for the right to support, a legal entity must not have conducted certain value transfers.
During the April 2020 to October 2021 period, legal entities must not have executed any decision with regard to:
- dividend distribution for a limited company
- remuneration or dividend distribution for an economic association
- acquisition of own shares
- reduction of share capital, the non-distributable share premium reserve or the statutory reserve used for reimbursements to shareholders/members
No decision regarding such distributions can be made during a company’s general meeting, or by its board or equivalent body during the April 2020 to October 2021 period.
Companies that are part of a corporate group are not entitled to reorientation support if the parent company has conducted such value transfers during the same period.
Companies must try to get some other form of compensation first
In order to qualify for support, you must first have done what can reasonably be expected to secure an insurance payment, damages or some similar form of financial compensation. This also includes other forms of government support to compensate for a loss of turnover or to cover the costs on which the allowance is based.
Companies applying for reorientation support have a specific obligation to disclose certain information
- the size of the company
- where in Sweden the company is located
- the nature of the business
How big can the allowance be?
The maximum allowance that can be approved is SEK 97 million for the whole August 2020 to February 2021 period.
The size of the allowance is calculated by subtracting the contribution margin for the allowance period from the total fixed costs associated with that period, and then multiplying the difference by 0.7 – i.e. 70%.
Here’s how to calculate how much reorientation support you are due: (total fixed costs for the allowance period – the contribution margin for the allowance period) × 0.7
Specific information for small companies regarding the August to October 2020 allowance period
The size of a company’s reorientation support allowance is calculated by subtracting its contribution margin for the allowance period from its fixed costs associated with that period, and then multiplying the difference by 0.75 – i.e. 75%.
Here’s how to calculate how much reorientation support you are due: (total fixed costs for the allowance period – the contribution margin for the allowance period) × 0.75
Specific information for small companies regarding the November to December 2020 allowance period
The size of a company’s reorientation support allowance is calculated by subtracting its contribution margin for the allowance period from its fixed costs associated with that period, and then multiplying the difference by 0.9 – i.e. 90%.
Here’s how to calculate how much reorientation support you are due: (total fixed costs for the allowance period – the contribution margin for the allowance period) × 0.9
Specific information for small companies regarding the January to February 2021 period
The size of a company’s reorientation support allowance is calculated by subtracting its contribution margin for the allowance period from its fixed costs associated with that period, and then multiplying the difference by 0.9 – i.e. 90%.
Here’s how to calculate how much reorientation support you are due: (total fixed costs for the allowance period – the contribution margin for the allowance period) × 0.9
Specific information for small companies regarding the March 2021 period
The size of a company’s reorientation support allowance is calculated by subtracting its contribution margin for the allowance period from its fixed costs associated with that period, and then multiplying the difference by 0.9 – i.e. 90%.
Here’s how to calculate how much reorientation support you are due: (total fixed costs for the allowance period – the contribution margin for the allowance period) × 0.9
Specific information for small companies regarding the April 2021 period
The size of a company’s reorientation support allowance is calculated by subtracting its contribution margin for the allowance period from its fixed costs associated with that period, and then multiplying the difference by 0.9 – i.e. 90%.
Here’s how to calculate how much reorientation support you are due: (total fixed costs for the allowance period – the contribution margin for the allowance period) × 0.9
Small companies are companies with fewer than 50 employees and a maximum annual turnover or balance sheet total of EUR 10 million.
The minimum amount of reorientation support that can be granted is SEK 5,000. There are several factors that help to determine the size of a company’s allowance. If a company is a loss-making enterprise, it cannot be granted support amounting to more than the nominal decline in the gross margin for the allowance period compared with the reference period.
The Swedish Tax Agency has developed a calculation aid which you can use to carry out an initial assessment of eligibility for support and the amount that can be granted.
Which factors can help determine the size of the allowance granted?
In some circumstances, your company may be entitled to a further SEK 10,000 to cover the administration costs incurred in applying for reorientation support. If you have received, or are due to receive, an insurance payment, damages or some similar form of financial compensation for a loss of turnover or to cover fixed costs on which the allowance is based, your allowance should be reduced by the corresponding amount. This also includes other forms of government support that a company has been granted or is due to receive to compensate for a loss of turnover.
If a company is part of a corporate group
If several companies belonging to the same corporate group apply for reorientation support, and the total allowance claimed exceeds the maximum amount that has been calculated, the allowance is divided proportionally between the various companies, according to the amounts claimed in their respective applications. The maximum total allowance granted to a corporate group is SEK 97 million for the entire August 2020 to April 2021 period. This must be shared between the various companies that have a right to support on the basis of the support that each company would have had a right to if the total allowance for the group had not been capped.
Which costs are considered to be fixed?
When you apply for reorientation support for a company, you must provide details of its fixed costs for the allowance period for which you are claiming support. When calculating your fixed costs, you must apply the same accounting principles you used during the financial year ending closest to 1 May 2020. The rules relating to fixed costs apply to all three allowance periods (August to October 2020, November to December 2020, January to February 2021, March 2021 and April 2021) unless otherwise stated. The costs must be separated.
Certain fixed costs cannot be included in your calculation. These include:
- costs that are not connected with your business in Sweden
- costs corresponding to revenue earned by another company belonging to your corporate group
- costs incurred by activities that are not considered to be business operations
Hire and leasing
This includes any hire or leasing contract that a company has entered into for at least six months. Such a contract must give the company the right to use an asset that is owned by someone else. Examples of such assets include:
- machines
- fees for site-leasehold rights
- tenancy fees
Staff hire and similar services are not included in these costs. A cost only counts if you have a contract for a mimimum six-month period. If a company has to pay reduced rent for the months in question, you will only be granted support for the proportion of the rent that you have to pay once the figure has been reduced.
Interest
In order for interest to be considered a fixed cost, it must be charged on a debt the company has incurred. The company must also be tied into paying the interest over an extended period. The interest costs must exceed any revenue the company earns from charging interest.
Profit-sharing payments and hybrid security dividends do not count as fixed costs.
Depreciation and essential repairs
The scheduled depreciation of material and intangible current assets during the allowance period counts as a series of fixed costs. This includes any costs incurred by a company for essential repairs and maintenance of its current assets.
Property tax and municipal property tax
This includes any costs relating to property tax and/or municipal property tax that a company is eligible for, regardless of whether or not a property is rented out.
Water, drainage systems, internet and telephone services
This includes any costs for a company’s use of water and drainage systems. Telephone services and internet-related expenses such as broadband connectivity also count as fixed costs.
Electricity consumption
This includes the following electricity-consumption costs:
- electricity network charge
- electricity trading price
- excise duty on electricy paid to the Swedish Tax Agency by a taxpayer for electricity consumption
Electricity consumed during manufacturing processes in industrial activities may not be included as a fixed cost. A company that applies for reorientation support must have used the electricity for its own consumtion in order for it to count as a fixed cost. This means, for example, that an electricity trading company cannot include any electricity involved in the business of trading electricity when calculating its allowance.
Heating of premises
This covers the cost of heating a company’s business premises, and includes both the cost of purchased district heating and fuel in the case of private heat generation.
Companies that have consumed electricity to heat premises used for industrial activities can get compensation for any electricity costs incurred as a result, as long as this has not already been raised in the “Electricity consumption” ("Förbrukning av el") section of the tax return. Costs for district cooling cannot be included.
Cleaning, waste management, emergency and surveillance services
This includes local-government-related costs for services such as:
- cleaning
- waste management
- emergency services
Nightclubs and sports and cultural events cannot get compensation for costs such as security guards. You can only get compensation for services that you purchase from another business operator.
Cleaning of textiles
This includes costs for cleaning different kinds of textiles – as long as you have a minimum three-month contract with the service provider – and relates mainly to fixed subscription costs. If a contract includes a fixed cost as well as a variable cost, a company can only get compensation for the fixed cost.
Insurance
This includes the cost of insurance cover for economic losses resulting from damage to property, liability for the payment of compensation or damage of a purely material nature. Reorientation support applies mainly to cases in which a company cannot avoid these costs in the event of a sudden loss of turnover.
Pension and health insurance costs should not be included in your calculation.
Animal feed
This covers the cost of animal feed used by companies running businesses operations involving live animals.
Franchise fees
This primarily relates to contracts that give the franchisee the right to use the franchisor’s business concept. The fee may not be linked to sales volumes or similar, since it would then count as a variable cost. Fees calculated as a percentage of sales figures are therefore not included as fixed costs.
Official approval notices and certain fees
Here, costs related to official notices of approval are included when they are necessary for running your business. Examples include the legal right to serve alcohol or to carry out business activities that are harmful to the environment. Fees for surveillance and monitoring carried out by public bodies are also included.
A company can only get compensation for these fees if they represent recurring costs paid to cover a certian period. The allowance cannot be used to cover follow-up control fees in the event of inadequate business practices.
Royalties and licencing fees charged for intellectual property rights
These costs are most often associated with long-term contracts. Only the portion of a cost that is not based on factors such as sales volumes or similar can be included.
Waterway usage charges in the shipping sector
Here, only the portion of a cost that is not based on the number of passengers or the cargo stored on board a ship can be included.
A company’s contribution margins reduce the size of its reorientation support allowance
This is what the Swedish Tax Agency means by a contribution margin:
- The contribution margin helps to pay for fix costs.
- A company’s contribution margin is calculated by deducting its variable costs from its current revenues.
- A contribution margin can be thought of as the profit a company makes from buying products and services and reselling them, without taking its fixed costs into consideration.
How should reorientation support be reported in a tax or VAT return?
Reorientation support is a form of financial subsidy. Tax on the whole allowance must be paid the same year as a decision is made regarding a company’s allowance. Associations or religious organisations should not report the portion of their allowance that corresponds to costs associated with activities on which they are not liable for tax.
If your allowance is to cover costs that you incurred during the previous tax year, you can report it for that year instead.
When filling in your VAT return, you can enter details of the reorientation support you have been granted in box 42.
Is a company ever obliged to pay back the money?
Reorientation support does not need to be repaid since it is an allowance rather than a loan or form of suspended payment. However, the allowance might have to be paid back partially or in full if an assessment carried out by the Swedish Tax Agency reveals that a company’s application includes incorrect details and it has no right to support.
If you have to pay back your allowance, and you have already paid tax on it, you should deduct that amount from the original figure. You should make this deduction for the tax year during which you pay back the allowance.
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