Transition support, turnover support and tax deferrals are being reintroduced. Further information on short-time work support is also expected. ”If new extensive restrictions are introduced, it is important that the legal certainty surrounding the support is higher this time,” says Hans Peter Larsson at FAR.
At a press conference on Friday morning, the Finance Minister announced Mikael Damberg that the government, after dialogue with the Moderates, has agreed that certain pandemic-related support measures will be reintroduced. Several of the measures were phased out during the autumn, but they are now on their way back. The government is preparing an supplementary amending budget to proceed with the transition support, turnover support, and the possibility to request deferral of tax payments.
The transition support will be reintroduced for December and may be extended by a further three months. The government is preparing an extension of the ordinary transition support for the periods between December 2021 and March 2022.
Replaced with up to 90 percent
The support is aimed at companies that have experienced a drop in turnover exceeding 30 per cent compared to a reference period, and these companies will be able to have between 70 or 90 per cent of their uncovered fixed costs reimbursed. The amount of support can be depends on the size of the company, and fixed costs mean, for example, salaries and rent. Before the support can become a reality, an extension must be approved by the EU.
Sole traders and partnerships will also be able to receive support when the turnover support is reintroduced for December. The same applies as for the conversion support, that turnover must have decreased by 30 percent and that the government is preparing the possibility of extending the support further if necessary.
- If new comprehensive restrictions are introduced, it is important that the legal certainty surrounding the support is higher this time. Experience from previous support must be taken advantage of and used so that advisors and companies clearly know what the support covers, the conditions, and how they are to be calculated, says Hans Peter Larsson, Tax manager at FAR, and Authorised Tax Advisor FAR.
In addition to the transition and turnover support, the option for temporary tax deferral is being expanded. In a press release, the government announces the following:
The proposal includes, among other things, that:
- Deferral of deducted preliminary tax and employer contributions should be possible for a maximum of nine accounting periods, instead of the current seven. The same shall apply to deferral of value added tax reported monthly.
- Deferment for VAT reported quarterly should be possible to be granted for a maximum of three reporting periods, instead of the current two.
- Extensions may be granted for accounting periods falling within October–December 2021. Under current rules, extensions may be granted for accounting periods falling between January 2020 and January 2021. The proposal therefore involves adding further optional months.
- The option to be granted a deferral retroactively remains.
The intention is for the subsidies to come into effect on 5 February but they can be granted retroactively.
The extended possibility of deferring taxes is positive and aligns with what FAR put forward in their consultation response. Now, advisors can support companies in carrying out liquidity calculations regarding the taxes that will ultimately still need to be paid. Increased foresight and planning are needed here as the debt grows. Companies should absolutely not speculate that these tax debts will be written off, says Hans Peter Larsson.
The government has previously announced that event support will be extended until 31 March 2022. A legislative amendment to temporarily abolish the waiting period in the Short-Term Work Support Act is underway, and the government also intends to provide more information on changes to short-term support shortly.
Charlotta Marténg
The article is published in collaboration with Resultat.
