If you call the line outside of these hours, you can leave a message and be called back. 2019/20:FiU53; Government Bill 2019/20:132; Committee on Finance bet. Prior results do not guarantee a similar outcome. Depending on how the situation develops, the proposal can encompass more than SEK 7 billion if the entire liquidity reinforcement is used. Margin debt and leverage are flashing red, again; ... Stockholm, Sweden. The employer pays the reduced amount of the salary to the employee. Companies with either Swedish or foreign owners are qualified for the guarantee. Maximum size: The maximum loan per company covered by the state loan guarantee is SEK 75 million. This publication is protected by copyright. Even so, the country is now headed for its worst recession since … Beneficiaries: The allowance applies to all companies that suffer from temporary and serious financial difficulties, which could not reasonably have been foreseen or avoided. For a company to be eligible for a state guaranteed loan the companies may not, throughout the life of the loan, pay dividends, bonuses or variable remuneration to senior management, or for profit distribution other than what is comparable with regular salary withdrawals. Unédic is funding a … SEK issues Government backed and commercial loans to Swedish export companies with an annual sales of at least SEK 200 million as well as suppliers to export companies and foreign buyers of Swedish products and services. For VAT reported annually: deferral is granted for, For VAT reported monthly: deferral is granted for, For VAT reported quarterly, deferral is granted for, Social security contributions and preliminary tax. How to handle COVID-19 medical debt you can't pay Kate Rockwood 2 hrs ago. Deferral of employer contributions and preliminary tax is granted for three months and applies retroactively. Covid-19 has significantly impacted Nordic economies. The Swedish National Debt Office will administer the guarantee and it is proposed that each company be allowed to loan up to SEK 75 million, although exceptions can be made. A temporary reduction of employers’ social security contributions will be proposed for the period 1 March to 30 June 2020 so that only the old age pension contribution is paid. An annual interest and a monthly fee will be levied on the deferred amount (not tax deductible). June 4, 2020. The company must repay the loans on the due date at the latest. The Swedish Social Insurance Agency (Försäkringskassan) will then compensate employers through a payment to the employer´s tax account. The Government expects that the guaranteed loans will not be used for bonuses or variable remuneration to senior officers of the company, or for profit withdrawals other than what is comparable to a regular salary withdrawal. A future proposal is that the rules for tax allocation reserves will be temporarily changed so that sole proprietors severely affected by the COVID-19 outbreak will receive tax cuts. EKN has received an increased credit framework totalling SEK 500 billion and will offer companies new and improved credit opportunities. In addition, the bank will pay a guarantee fee to Riksgälden. The application must be submitted by 31 August 2020 at the latest. Improved access to working capital financing for SMEs. Sustainable small and medium-sized companies in Sweden with up to 250 employees that are in need of financing due to COVID-19, can apply for a bridge loan from Almi. When the guarantee relates to sub-supplier financing, the payment shall include Swedish sub-suppliers. With an EKN guarantee, the commercial bank can turn to SEK for optional funding of the loan. The proposal’s cost to public finances are estimated to SEK 33 billion. However, it may not be used to remedy a company’s need for long-term risk capital or equity. New guarantee for sub-suppliers to exporting companies. New working capital guarantee for large companies. The annual interest rate of 1.25% and the monthly fee of 0.2% equals an effective annual interest rate of, Possibility to get a refund of preliminary tax already paid for 2019. The support is only available for business in specific industries identified by the Government as particularly affected by COVID-19. The coronavirus pandemic has roiled the markets, tossed most fiscal assumptions to the wind and driven the national debt to the highest level since World War II, … We have prepared an in-depth and nuanced analysis for various major jurisdictions and pulled together a global response team. Sinéad Baker. Responsible authorities may issue additional regulations on the enforcement of the measures. 1Government Bill 2019/20:142; Committee on Finance bet. Deep wounds remain Such relief measures, however, have not prevented the … The employer makes a qualifying deduction as usual. The need for capital may include costs arising both before and after an export order. The guarantee will be issued to banks, which in turn will provide guaranteed loans to companies. The support is valid for rent reductions from 1 April - 30 June 2020. Moreover, the previously presented proposal on new opportunities to defer tax payments will be expanded. The loan guarantee primarily targets small and medium-sized enterprises. Administration of the measure (12) The National Debt Office is the granting authority responsible for administering the measure. These vary considerably from country to country and are being updated and amended regularly. We use cookies on government.se to regularly improve the website. The possibility for short-time working must exist within the company’s central and local collective bargaining agreement. 2019/20:FiU51; Government Bill 2019/20:151; Committee on Finance bet. Sweden’s “light-touch approach” to curtailing the spread of Covid-19 has produced only limited economic benefits, according to research that compared spending patterns in the Scandinavian country and in Denmark, where far more restrictive policies were adopted. It is only in the case of a reduction of working hours within these levels that the short-time work allowance will be available. A condition for being able to benefit from the aid is that there is a rent reduction agreement between the property owner and the tenant. Working capital facilities include loans, revolving facilities, overdraft facilities and similar. Companies may defer to repay other existing loans with the same bank or credit institution during the period covered by the credit guarantee. The proposal means that the central government will guarantee 70 per cent of new loans banks provide to companies that are experiencing financial difficulty due to the COVID-19 virus but that are otherwise robust. This publication is provided for your convenience and does not constitute legal advice. A central government loan guarantee has been proposed to make it easier for companies to access financing. Measures include guarantee schemes, support for business continuity and a tailored package of measures for SMEs. The measures aim to support credit institutions to solve the acute shortage of working capital financing that many exporting companies currently are facing. Travelling restrictions for Sweden. The Government OfficesSE-103 33 StockholmSwedenSwitchboard: +46 8 405 10 00. The three new guarantee measures include the following: 1. To mitigate the impact on the Swedish economy, a crisis package for businesses and jobs, and several other measures, was presented earlier. The European Commission is also prepared for rapid consideration and approval. Sweden's softer approach to containing the new coronavirus was already an outlier in Europe and is coming under even more scrutiny as death rates leap ahead of its Nordic neighbours. Tax revenue is in deficit, too, causing federal budget shortfalls of a scale not seen since World War II. The guarantee covers credits including new loans, revolving credit facilities and bonds. A package of three measures to facilitate the access to financing for SMEs and companies in the export industries. A company may not pay dividends at the same as it receives short-time work allowance. In Sweden, from 3 January 2020 to 4:20pm CEST, 4 May 2021, there have been 973,604 confirmed cases of COVID-19 with 14,048 deaths, reported to WHO. The proposal will be presented to the Riksdag shortly in an additional amending budget. Employer contributions and preliminary tax paid in February and March for periods from January 2020 can receive tax refunds from the Swedish Tax Agency. The export activities should amount to a substantial part of the company’s activities and should create value for Sweden. The allowance is granted retroactively to the employer, not to the employee. This measure requires limited efforts on the side of the employer: Employers pay sick pay to their employees as usual. To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Sweden, please visit the website of the Swedish Public Health Agency (in Swedish). The employer must still pay old age pension fee. If the borrower is a supplier to an exporting company, a significant part of the exporting company's turnover must be generated by exports of Swedish goods or services. From 7 April, companies can apply for the financial support. It is proposed that this reduction should apply to up to 30 employees and on that portion of the employee’s wage that does not exceed SEK 25 000 per month. The Swedish Export Credit Corporation (SEK) Loans. response to COVID-19; (b) Decision of the Swedish Government to entrust the National Debt Office to prepare and enforce a guarantee programme for airlines; (c) Ordinance 2011: 211 on loans and guarantees. Enterprises can apply for a loan with a government credit guarantee by contacting a bank. The employer’s business must be viable from a long-term perspective. The reason, it would seem, is that Sweden’s strategy appears to have tamed the virus. Attorney Advertising. A new system for short-time work allowance has been introduced. The assessment may be made on a case-by-case basis taking the particular circumstances of the employer concerned into consideration.7Lag (2009:99) om anstånd med inbetalning av skatt i vissa fall (Act (2009: 99) on deferred payment of taxes in certain cases); Committee on Finance bet. This proposal concerns sole traders and natural persons who are partners in Swedish partnerships. The measures introduced by the Government are designed to mitigate the short-term effects of COVID-19 and to ensure that businesses are in a good position to emerge strong when the economy must recover. Almi, a state-owned support organisation providing financing to early phase companies with growth potential, has received SEK 3 billion in additional funding in order to increase loans to SMEs and facilitate their access to financing. In order for the guarantee to be accessible through a bank or credit institution, the bank or credit institution must take part in the loan guarantee programme by signing an agreement with the Swedish National Debt Office (Riksgälden). this is not a direct grant to companies. If a property owner and the tenant agrees on a rent reduction, the state will cover 50% of the rent reduction, capped at 25% of the fixed rent. The borrowing company may defer paying interest on the loan for the first 12 months. At the time of writing this article, more than 12,500 people have died from the virus in Sweden, compared to Denmark’s 2,300 and Norway’s 607. If a credit guarantee has to be redeemed, the central government will pay the guaranteed loan amount, which will impair the central government budget balance and net lending. The terms and conditions of the loan will be tailored to the current situation, and may include up-front deferrals of interest and amortizations. 2019/20:FiU55.8The effective rate was originally proposed at 6.6% but was adjusted by a decision of the Committee on Finance on 14 April 2020.9Lag (2020:202) om särskild beräkning av vissa avgifter för arbetsgivare (Act (2020:202) on the calculation of certain contributions for employers), Government Bill 2019/20:151; Committee on Finance bet. No clear guidance is available, and any potential transfer of value by companies that have been granted loans subject to state guarantees should be assessed on a case by case basis. 2019/20:FiU51. Sweden's renegade COVID-19 policy looks like a disaster — but the country is quietly determined to see it through despite the cost in lives. The maximum amount of financial support is SEK 26,030 per person/per month (maximum salary of SEK 44,000 and maximum reduction in working hours of 60%). To reduce costs for companies with considerable difficulties as a result of the COVID-19 virus – in sectors such as durable consumer goods, hotels, restaurants and certain other activities – the Government proposes providing support that aims to facilitate and speed up renegotiation of rents. SEK has received an increased loan limit, totalling SEK 200 billion (previously SEK 125 billion). This means that value added tax reported annually from 27 December 2019 until 17 January 2021 will also be covered by the proposal. Foreign nationals (aged 18 or over) must present a negative Covid-19 test result certificate, at the border, to be permitted into Sweden. The loan guarantees should be provided as soon as possible; this is why the Government is preparing the proposal tomorrow for prompt consideration by the Riksdag. Vulnerability to debt problems had been building in many emerging and developing countries prior to the emergence of the COVID-19 (coronavirus) pandemic. EKN has increased its guarantee limit, now guaranteeing up to 80% (previously 50%) of credit institutions risk for working capital financing provided to SMEs. In exceptional cases maximum SEK 250 million. The loan is now on SEK’s balance sheet, while the bank retains the 5% non-covered portion. COVID-19 Country Response COVID-19 epidemic evolution. The approach is that central government will cover 50 per cent of the rental reduction up to 50 per cent of the fixed rent. Sweden: Will COVID-19 Economics be Different? Yet in spite of these similarities, when the coronavirus hit, there was one country that chose a wildly different path than the rest of the Nordic countries: Sweden. Swedish companies and their shareholders should refrain from authorizing distribution of dividends, share buy-backs or similar transfers of value while receiving State contributions or other Government authorized support measures. This means that many people can get back the preliminary tax they paid in 2019. In addition, the qualifying deduction for sick pay (Karensdag) has been temporarily suspended between 11 March and 31 May. Blogs about Sweden. Thus, we urge companies that are considering applying for any relevant state aid to make sure that they are up-to-date and have clearly analysed the benefits and any potential restrictions connected with participating in the aid schemes. EKN offers guarantees for payments and financing. 2. Companies must still apply for a regular loan with the bank and it is ultimately the bank that determines if a company shall be granted a loan and on what terms. The credit institution making the payments to sub-suppliers applies to EKN for the guarantee. Output was down by 8.6 per cent compared with the first quarter , and 8.2 per cent compared with the same quarter last year. The fee will be determined on the basis of the borrower’s actual risk class, which is set by the credit institution. The deferment does not apply to the final payment. The proposal is expected to result in a maximum liquidity reinforcement of more than SEK 13 SEK billion. It will be possible for all employers to obtain reduced employer fees (arbetsgivaravgifter) during the period of 1 March to 30 June 2020. Sweden’s less restrictive containment strategy may have resulted in a milder economic contraction at the onset of the crisis, but uncertainty remains about its implications for the rest of the year. To particularly alleviate the impact for small and medium-sized enterprises, a crisis package is now being presented for Swedish entrepreneurs. The banks will pay a guarantee fee to the Swedish National Debt Office for guarantees that are issued. All travellers, regardless of which country they are arriving from, are recommended to: Rate cut wrong response to Covid-19, says Sweden’s central bank chief Stefan Ingves focuses on insulating financial sector from problems in real economy as Riksbank holds rate Sweden had inoculated at least 80,000 people by Jan. 10, or 0.8% of its population, health authorities said Tuesday. If special liquidity needs are at hand the guarantee may be extended to cover loans over 18 months for SMEs and 12 months for larger companies. The Swedish National Debt Office Maximum size: The aid allowance covers for 75% of reduction costs. The measure must obtain State aid approval by the European Commission.11Government Bill 2019/20:132; Committee on Finance bet. Sweden this morning reported its flash estimate of second quarter GDP. In relation to certain measures, clear guidance and legislation have already been prepared, whilst in relation to others only principle and general statements exists. The measure applies to a maximum of 30 of employees per company unit and the reductions are capped at a salary of SEK 25,000. The programme will offer a guarantee of 70% of new loans to companies affected by COVID-19 but who are otherwise robust. There are three fixed levels of reduction in working hours: 20%, 40% or 60%, which means reduced costs of 19%, 36% and 53% respectively for the employer in the three different cases. The support is retroactively applied from 16 March. Meanwhile, vaccinations have already started in some countries as cases continue to rise. Compensation for the qualifying period can be applied by the employer retroactively from 11 March. The first payment will be made following 12 May 2020. The banks will pay a guarantee fee to the Swedish National Debt Office for guarantees that are issued. However, there is no formal limit on company size to take part in the programme. The measure offers temporary discount on fixed rental costs for companies in specific exposed industries. The allowance is administrated by the Swedish Agency for Economic and Regional Growth (TIllväxtverket). In addition, White & Case has carried out an analysis of global governmental responses to the COVID-19 crisis. EU leaders went the distance to agree a historic coronavirus recovery fund for the bloc. This is the common website of the Government and the Government Offices. The new regulation offers employers the possibility to reduce employees’ working hours and wages instead of initiating layoffs, and receive financial support from the Government to compensate for a significant part of the costs for retaining the employee. The Remedy for Sweden; Restore Liquidity and Mitigate the Consequences for Businesses and Jobs. Applications are submitted to the Swedish Social Insurance Agency. Read the Article. 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