Corona virus (Covid-19) – budget measures regarding tax to support Swedish companies.


On Monday, 16 March 2020 the Swedish government presented further budget measures in response to the current public health crisis. The proposed budget measures for tax purposes include an aim to strengthen the liquidity of Swedish companies through an extension of time for payments to the tax account.

The proposal suggests that companies will receive an extension of social security, preliminary tax and VAT payments that are normally made on a monthly or quarterly basis. The extension covers three months of tax payments and can be granted for a period of up to 12 months. There will be an interest rate currently set at 1.25% levied on the amounts for which payment is postponed. In addition, there is a fee of 0.3% per commenced calendar month from the date the extension is granted.

 The proposal is set to enter into force by 7 April 2020, but the measures regarding tax can be applied retroactively as from 1 January 2020. This has the effect that companies that made payments to their tax accounts in February and/or March may be entitled to a repayment from the Swedish tax authorities. Extensions will not be granted to companies that do not have proper financials or in some other way are deemed non-compliant. Extensions may not be granted to companies with large tax deficits.

Depending on how things develop, the proposal could comprise up to SEK 300 billion if fully utilised by the tax payers. The cost of the proposal is estimated at SEK 170 million.

 Although the proposal is yet to enter into force, companies should note that it is possible to ask for an extension of time for tax payments through the normal procedure codified in the Tax Procedures Act (Sw. Skatteförfarandelagen), if there are exceptional reasons. It is our view that difficulties in making timely tax payments due to the current public health crises caused by the Corona virus could be considered such an exceptional reasons. However we note that this will be determined on a case by case basis.

We at Magnusson are available to assist clients with applications under the proposed new legislation or in accordance with the current procedure under the Tax Procedures Act. We are also available to provide legal advice on how your business should manage any Covid-19 related issues in all legal areas, including corporate restructuring, labour law and insurance law, reviewing commercial contracts and advising how to best handle procurement in emergency situations, to help ensure that your business is well placed to survive these difficult times and to thrive once Covid-19 has been contained.

It should further be noted, that the company sector has critisised the proposal as being to weak partly because of the level of interest rate that is currently set for postponed payments. The government is therefore investigating the possibility to lower the interest rate should the crisis extend for a long time.