Sweden

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Return to homepage  |  Last updated: 28 October, 2020

Short-time work allowance

• The short-time work allowance aims to save employments in Sweden helping affected companies financially to retain their staff and rapidly gear up again when the situation improves. The employees will, during the short-time work, reduce their work hours but still receive more than 90 percent of the salary, with a cap up to SEK 44,000 per month. The proposal means that the employer's salary costs can be reduced by half. The Government will take on 75 percent of the cost for the employees´ reduced work hours. The application portal opened on 7 April and applications are accepted retroactively from 16 March 2020 to 31 December 2020.
• The working hours can be reduced by 20 %, 40 %, 60 % during FY 2020 as well as 80 % during May, June, July
• A requirement to be eligible for the allowance is that the company is in a temporary and serious financial situation due to the Covid-19 crisis. According to the recent clarifications issued by the Swedish Agency for Economic and Regional Growth (Tillvaxtverket), companies that distribute dividends or make similar voluntary payments ”cannot be reasonably considered to have such serious financial difficulties that they would be eligible for aid”. However, group contributions related to FY 2019 should not impact the possibility to apply for the allowance.
• The Swedish Agency for Economic and Regional Growth (Tillväxtverket) will be the government body responsible to process and decide on temporary lay-offs. To receive the support, an application must be submitted to the Agency. If rejected by the Agency, it will be possible to appeal the decision to the Administrative Court.

Increased lending to small and medium-sized companies via Almi (enacted)

• Almi Företagspartner receives a capital injection of SEK 3 billion to increase its lending to small and medium-sized companies throughout the country. To companies who’s operations are adversely affected by the outbreak of covid-19.

Increased loan frame for The Swedish Export Credit (SEK) (enacted)

• The Swedish Export Credit (SEK) loan frame is increased from SEK 125 to 200 billion and can be used to issue both government-supported and commercial credits to Swedish export companies. These measures, together with the cancelled dividend announced on March 19, means that SEK is given additional conditions to meet the export industry's increased demand for credit.

The Central Bank of Sweden

• Lends SEK 500b to Swedish banks. The proposal means that the banks will in turn lend money to companies to secure the necessary credit supply lending via banks).
• The Central Bank of Sweden announced on 16 and 19 March that it will extend its purchases of securities during the year by up to SEK 300 billion. The purchases will if necessary include government and municipal bonds, covered bonds and securities issued by non-financial corporations.
  • Corporate bonds issued by non-financial corporations are eligible for a buy-out program

USD loans:

• The Riksbank will enable loans in US dollars against collateral to ensure a continued and adequate supply of one of the most important currencies for Swedish companies. An adequate supply of both Swedish kronor (SEK) and US dollars (USD) is important to mitigate the consequences for output and employment in the wake of the corona pandemic
• Requirements:
  • The Riksbank will offer loans in US dollars against collateral. The framework amount is USD 60 billion for the period 19 March 2020 up to and including 18 September 2020.
  • Riksbank monetary policy states that counterparties, no later than on the banking day before the auction, have registered to participate.
• Amended regulations for collateral:
  • The Riksbank has decided to remove limit rules for covered bonds. This is to enable counterparties to use significantly more covered bonds for credit at the Riksbank and help improve functionality on the market for covered bonds.

Extra resources for culture and sports (enacted)

• The cultural sector and the sports movement receive SEK 1 billion in extra support due to the economic consequences that affected the sectors as a result of the spread of the new corona virus. The proposal will help the cultural sector and sports organizations to tackle the costs associated with the virus.

Extra financial aid to municipalities and regions (enacted)

• The state will compensate municipalities and regions for extraordinary measures and additional costs in health care and care linked to the virus. The proposal will help municipalities and regions to tackle the costs associated with the virus.

Temporary discount for rental costs in exposed industries (enacted)

• In order to reduce the costs of companies with major difficulties due to the corona virus in certain sectors (e.g. hotels, restaurants and some other sectors), it is proposed that the government should bear up to 50 percent of agreed rental rebates (but not more than 25 % of the original rent). The total amount of support to a tenant must not exceed EUR 800,000.
• The lessor can apply via Länsstyrelsen retrospectively for the period 1 April - 30 June. The application must be submitted no later than August 31, 2020 and cannot be made before 1 July, 2020.
• In order to apply for the support, there must be a rental agreement for premises with a fully or partially fixed rent and this agreement must have been signed no later than 1 March 2020. The parties must also sign an agreement on a rental discount on the fixed rent by 30 June 2020.

Extended credit guarantees for The Swedish Export Credit Commission's (EKN) (enacted)

• The Swedish Export Credit Guarantee Agency’s (EKN) ceiling for credit guarantees will be increased from SEK 450b to a total of SEK 500b, and the lower risk for banks will give companies new and improved credit opportunities.

Airline companies are given state credit guarantees (enacted)

• Airlines are given the opportunity to obtain credit guarantees worth a maximum of SEK 5 billion, of which SEK 1.5 billion is directed to SAS. The proposal will support Swedish airline companies to survive the crisis.

Government loan guarantee for small and medium sized companies (enacted)

• The proposal means that the state guarantees 70 per cent of new loans from the banks to companies that, due to the consequences of the new corona virus, have encountered financial difficulties, but otherwise are viable. The guarantee is issued to the banks, which in turn issue guaranteed loans to the companies. The loan guarantee is primarily aimed at small and medium-sized companies, but there is no formal limit on the size of the company to participate in the program.
• The Debt Office (Riksgälden) will administer the guarantee and each company is proposed to borrow a maximum of SEK 75 million, but exceptions can be made.
• Companies can apply for a loan with a state credit guarantee by applying to a bank.

The Swedish Financial Supervisory Authority (FI) (enacted)

• Have reduced the countercyclical capital buffer requirement for banks from 2.5 percent to 0 percent.
• Are temporarily allowing banks to underwrite the liquidity coverage ratio (LCR) for individual currencies and for total currencies.

The Swedish Financial Supervisory Authority (FI) (proposed)

• intends to give banks the opportunity to exempt all housing mortgage holders from the requirement to amortize on their loans due to the Corona virus effects on the economy. The exemption is proposed to be active until June 2021 (Pending approval process. Proposal will potentially be active from April 14).

Start-ups

• The Riksbank will enable loans in US dollars against collateral
• Lending up to SEK 500 billion (about EUR 46 billion) to companies via the banks

Business transition support (enacted)

• ”Business transition support” can be given to companies whose total net sales for March and April 2020 were less than 70% of their total net sales compared to March and April 2019, provided the decrease in net sales is an effect of the COVID-19 situation. The transition support is available for natural and legal persons who conduct business in Sweden, are registered for F-tax, and have an annual net sales of at least SEK 250,000.
• A certificate from an auditor will need to be attached to any taxpayer application for support in amounts over SEK 100,000.
• Business transition support is not allowed if the company or any of its parent companies during the period March 2020 - June 2021 executes or decides upon a profit distribution or equivalent. Group contributions are however not an impediment for receiving business transition support. Furthermore, the company must have taken certain reasonable steps to exhaust the possibilities of obtaining insurance compensation, damages, similar compensation or other state support for the lost sales or costs on which the support is calculated.
• Business transition support is not allowed for companies (or any other company within the same group) located in a jurisdiction that is included on the EU or the OECD ”blacklist”—the list of jurisdictions that are considered to be non-cooperative tax jurisdictions
• The amount of the business transition support is to equal (1) 75% of the business’ net sales reduction percentage, of (2) the business’ fixed costs for March and April 2020.
• The transition support is limited to SEK 150 million per company or per group if several companies within the same group are eligible for the business transition support.
• Application for business transition support are to be submitted to the Swedish tax agency, and are due by 31 August 2020 at the latest.
• On October 19, the Government extended business transition support scheme for May-July 2020. May 2020 and June-July 2020 will be considered as two separate application periods.
• The requirements and conditions of the extended program are generally the same as for March-April 2020. To be eligible for support, the company has to demonstrate a decline in revenue comparing to the same period of previous year: by 40% for May and by 50% for June-July.
• The maximum support amounts to SEK 75 million for May. For June-July the maximum support amounts to 8 million to start off with. The government is currently working on increasing the maximum support for June-July. The application for May-July 2020 should be submitted via Swedish Tax Agency (Skatteverket) before 30 November 2020.

Payment facilities

• Possibility, under certain conditions, to defer the payment of the Customs debt and other taxes collected by the Swedish Customs authorities.

Duty relief

• Reliefs from customs duties and import VAT for goods intended to be imported to State bodies, approved charitable or philanthropic organisations, and rescue units. (Effective but under validation process of the Commission)

Customs audits

• Suspension of Customs audits, (to be verified, Non-official communication)

Other measures

• Swedish Customs has also contributed with protective equipment for health care from their own stocks.

• Sweden took no nationwide lockdown; Remote work recommended; Schools are open; Restaurants are open but must ensure that the guests can keep a distance between one another. The guests may only eat and drink sitting at a table or pick up takeaway. Travel ban until june 15th.

Main sources of information:

• Economic measures provided by the Swedish Government to alleviate the economic effects for companies due to the covid-19
• Riksbank lends up to SEK 500 billion to safeguard credit supply

Tax: Jorgen Graner – jorgen.graner@kpmg.se
Restructuring: Bjorn Dahl – bjorn.dahl@kpmg.se
Legal: Mattias Bergman - mattias.bergman@kpmg.se