Crisis package for small and medium–sized enterprises in Sweden 

Tax Alert

Published: 2020-04-01

On the 16th of March the Swedish government presented an initial financial support package due to the outbreak of Covid-19. This did, among other measures, include a new system of short-time furlough (korttidspermittering) and credit support through deferral of taxes. On the 25th of March, the government presented further measures to mitigate the impact on the Swedish economy. This time, the primary focus was to alleviate the financial pressure on small and medium-sized enterprises. Below we summarize the additional measures taken by the government.

Central government loan guarantee

As an initial measure, a central government loan guarantee has been proposed. This means that 70% of new loans to companies that experience financial difficulties due to Covid-19, but which are otherwise robust, will be guaranteed by the government. The guarantee will be issued to banks, which in turn will provide loans to companies.

Though the suggestion primarily is targeted at small and medium-sized companies, there is no formal requirement related to the size of the company which would limit larger companies access to the guarantee. According to the proposal, each company may lend up to SEK 75 million, however, exemptions can be made. If the credit guarantees are redeemed, the government’s budget balance will be impaired, which is why the banks will pay a guarantee fee to the Swedish National Debt Office for issued guarantees, to improve the central government’s finances.

Temporary reduction of employers’ social security contributions and individual contributions

The government proposes a temporary reduction of employers’ social security contributions for the period of 1 March to 30 June, meaning that only retirement pension contribution (10,21%) is paid. According to the proposal the reduction will apply for up to 30 employees per enterprise, on the part of the employees salary not exceeding SEK 25,000. This will result in tax relief of up to SEK 5,300 per employee and month. A reduction of individual contributions is also proposed in order to provide equivalent relief to sole traders.

Temporary discount for rental costs in vulnerable sectors

Due to the outbreak of Covid-19, companies in sectors such as durable consumer goods, hotels, restaurants and certain other activities are facing considerable financial difficulties. To reduce costs for these companies the government aims to speed up the renegotiation of rental costs by proposing that the central government will cover 50% of the rental reduction, up to a maximum of 50% of the fixed rent. The application for support can be made retrospectively and will apply for the period of 1 April to 30 June.

Temporary modification of the rules for tax allocation

The government proposes that 100% of the taxable profits for 2019, up to SEK 1 million, may be set aside in the tax allocation reserve. The amount can later be set off against possible future losses. As a result of this measure many people will be able to reclaim preliminary taxes paid during 2019. The proposal is only accessible for sole traders and for natural persons who are partners in Swedish partnerships.

Expansion of previous proposal on deferral of tax payments  

The proposal previously presented in regards to deferral of tax payments will be expanded to also include value added tax (VAT) reported annually, from 27 December 2019 until 17 January 2021. As a result, many sole proprietors will be able to defer VAT-payments which would otherwise be due during the spring of 2020.

Exemption from rule on dormant companies

Lastly, the government proposes that companies that are made dormant in case of unemployment will be exempted during 2020 from the rule that a company can only be made dormant once during a period of five years.

Deloitte’s comment

The proposal presented on 25 March was the second support package put forward by the government to mitigate the financial difficulties that many companies experience due to the Corona-virus. However, it is likely that further measures will be presented. As of now it is very difficult to determine whether these measures will be enough to limit the effect on Swedish companies and employees.

The proposal presented by the government provides troubled companies with several alternatives to quickly strengthen their liquidity. Should you have any questions in relation to the options available for you and your company, please contact your local consultant or any of the contact persons below. 

Visit our global COVID-19 topicpage

How can businesses manage risks related to the virus? Deloitte's global specialists constantly update the page with new articles. 

To the topicpage

Contact us

Mari Kroksgård
+46 76 836 55 75

Henrik Karlsson
+46 76 827 73 93

Per Elmby
+46 70 080 44 16

Anna Sabelström Holmberg
+46 73 397 13 04

Hade du nytta av den här informationen?