Published March 17, 2020
The Swedish government proposes actions as a response to the outbreak of the corona virus and the current financial situation
On March 16 the Swedish government proposed changes to Swedish tax legislation to meet companies’ liquidity problems due to Corona crisis. The proposal includes deferred tax payments and right to repayment of certain taxes already paid to the Swedish Tax Agency.
In addition to these actions, the government propose special rules for short-term leave and state liability for sick pay costs not included in this news flash.
The government proposes that companies can apply for a 12 month deferral of 3 months of certain tax payments. Deferral should be granted unless there are reasons against it. During the deferral period, the company does not have to pay the relevant taxes. The relevant taxes are VAT, employer contributions and tax withholding related to salaries. The government estimates the cost for these measures to SEK 300 billion. A monthly fee of 0.3 percent and a yearly interest rate of 1.25% apply to deferred payments.
The rules enter into force on April 7 and apply to taxes as from January 1st, 2020. The proposal applies to all companies not having misconducted in relation to taxes or having tax debts. The proposed rules are not limited to specific industries.
The proposal is far reaching and will likely be well received by companies with strained liquidity. The mechanics of the proposal to credit the companies’ tax accounts will ensure the intended immediate liquidity effect. The costs of deferred payments (fee and interest) must be noted. Companies must apply for deferred payment. The Swedish Tax Agency will publish guidance on how to apply. Please contact Svalner for assistance.
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