Other proposals with regards to Covid-19
I addition to the Government’s proposals of the financial rescue package, there are many other actors which are trying to find solutions to make it easier for individuals as well as companies in this unusual and hard time. Försäkringskassan has for example made announcements regarding social security insurance for employment in more than one country and Skatteverket have extended the suspension period for accounting firms with extension rights.
Social security insurance when working in more than one country
In the normal case scenario, a person should be covered by the social security insurance in the country where he or she works, i.e. the legislation of where the work is performed is applied. In the case of a person working in more than one country there are rules to consider about what country’s legislation should be applied. Normally, a person who works in two or more EU member states should be covered by the legislation in the country where he or she is a resident. This rule is only applicable under the condition that a significant part of the job is performed in the country of residence. A significant part in this case is at least 25 %.
The rules imply that an employer should not pay any social security contributions in Sweden for employees being resident in Sweden but working less than 25 % in the country. Regarding the Corona virus and the restrictions, it has added to travelling, employees can fall into the situation where they are forced to work from home and therefore exceed the 25 % limit of work in Sweden. In the normal case scenario this would mean that the employer should start paying social security contributions for the employee in Sweden.
Försäkringskassan and Udbetalning Danmark have agreed that the social security insurance for the normal border commuters will not be affected by the travel restrictions because of Covid-19. This means that an employee who is resident in Sweden and normally works in Denmark but because of the current circumstances is forced to work from home, will still be covered by the Danish social security insurance.
Försäkringskassan has, as of today, only provided information regarding work in Sweden – Denmark, but because of the situation we are in, it cannot be excluded that exceptions also comprise work in other countries. Our recommendation, however, is to always consider the individual cases with Försäkringskassan before any decisions are made.
Extension for income tax returns
Skatteverket has notified that the submission of tax returns will be simplified for those with extension through an accounting firm. All tax returns which are covered by the extension (tax returns for natural persons) have a submission deadline of 15 June 2020, no matter if submitted digitally or by paper.
Extension is also given the right to submit VAT returns (for those reporting annually), as well as paying the VAT included in the VAT return, by 26 June 2020.
Provisional income tax return
A company should not pay too much or too little provisional tax during a tax year. If you are expecting a profit or loss which is not reflected in the provisional tax decision, you can apply for a review of the decision.
Because of Covid-19 there are many companies which profitability will decrease. It may therefore be good to be reminded that the possibility of having the provisional tax decision reviewed exists. If you are financially affected because of Covid-19 you can decrease your monthly tax payments. Depending on earlier payments and expected profit or loss for the full year, it may be possible to receive a repayment of already paid tax, alternatively to decrease the monthly payments for the rest of the year.
A provisional income tax return may be submitted up until six months after the end of the tax year, which means that also companies which have come to an end of the financial year, have the possibility of claiming a tax repayment.
There is no limitation on how many times a provisional tax decision can be changed during a year.
Article by Lisa Dahl and Nina Berglund, Mazars.
The crisis we are currently in will have an enormous effect on the companies in Sweden. The Government have proposed different measures to avoid the worst economic effects of the virus and it is not impossible that more measures will be implemented, or that already proposed measures will be changed.
Please get in touch with us if you require help or support during these difficult times.
Beatrice Hultman, Tax Lawyer Mazars Göteborg.