COVID-19: Sweden extends measures for businesses

The Swedish government has announced that several measures taken to support Swedish jobs and businesses through the COVID-19 crisis will be extended.

These include short-term lay-offs, deferral of tax payments, reorientation support and turnover-based support to sole traders.

The proposals are based on an agreement between the government parties, the Centre Party and the Liberal Party.

Short-term lay-offs extended by up to seven months

Short-term lay-offs may currently be granted for a maximum of nine consecutive months. The government will propose that this time limit be temporarily removed until 30 June 2021.

In practice, this means that short-term lay-offs granted in 2020 can be extended by up to a further seven months, or until 30 June 2021 at the latest.

Up until 30 June 2021, support will continue to be strengthened compared with the ordinary statutory levels.

In January, February and March, the subsidy rate will be 75 per cent, which is the same rate as this year.

In April, May and June, the subsidy rate will be 50 per cent.  For December 2020, the subsidy rate is 75 per cent, according to current rules.

The extension will be combined with stricter processing of applications for approval of support to ensure that support is only provided to employers meeting the requirements and that abuse does not occur.

The government will also propose that the administrative appropriation to the Swedish Agency for Economic and Regional Growth be strengthened by a total of SEK 450 million.

Reorientation support for three additional months

The government will propose that reorientation support be extended so that it can also be sought for August–October 2020.

This support is aimed at businesses that have lost at least 50 per cent of their turnover during this period, compared with the same period in 2019.

A maximum of SEK 30 million in support will be provided per business, which is in line with the European Commission’s temporary framework for state aid measures for COVID-19-related support. This support requires notification to and state aid approval by the European Commission.

The government previously introduced reorientation support for support periods between March and July.

Turnover-based support to sole traders for a further three months

On 5 November, the government decided on a new turnover-based support for sole traders.

This support concerns turnover reduction in March–July 2020 and can be applied for on the National Board of Housing, Building and Planning website from next week.

In view of the developments regarding the ongoing pandemic, the government and its support parties have already agreed to propose that this support be extended to include turnover reductions in August–October 2020 as the basis for support. There will be a new application round for the extension.

To qualify for support, net turnover during the support period must have decreased by more than 50 per cent compared with net turnover during the corresponding period in 2019.

If the loss of turnover exceeds this level, the sole trader may receive compensation for 70 per cent of their loss of turnover, or a maximum of SEK 72 000 per business, for the new support period.  This support can be sought by sole traders whose turnover exceeded SEK 200 000 in 2019.

Extension of tax payment deferral

As early as March this year, the government introduced a possibility for businesses to defer tax payments for one year. It applies, for example, to payments of employers’ social security contributions and value added tax.

To date, the Swedish Tax Agency has made around 100 000 deferral decisions.

The government will propose that the deferral period be extended by a further year for businesses that have been granted a deferral under the new regulations.

It is proposed that such an extension may be granted on application, unless there are particular reasons for not doing so.

Extended easing of unemployment insurance for business operators

The government will propose that the temporary changes to unemployment insurance for business operators be extended to also apply in 2021.

This means that business operators who make their business dormant in 2021 will also be exempted from the rule that at least five years must pass before a new dormancy period can begin.

In June 2020, the Government also adopted a legislative amendment that enabled business operators to undertake certain limited measures in their business and still receive unemployment benefit.

This temporary rule will also be extended to apply in 2021. The aim is to make it easier for business operators to restart their operations at a later date.

The proposals announced will be submitted early next year in an amending budget for 2021. 

Swedish Government