View the latest news and highlights in the field of accounting, financial reporting, auditing, taxation and more.
Byggnads contract bargaining is forwarded to October 2020 this year.
Usually it is in May when the bargain details will be effective, that means also that the salaries will be raised certain percentage based on the new terms Byggnads negotiates with their opponents in the industry. This year it will be postponed to the month of October. No contracturary salary raises until then.
Swedish Government has decided to lower the social tax from 31,42% to 10,21% during four months of March, April, May and June 2020.
This tax relief can be applied to up to 30 employees per company and up to 25 000 SEK of gross salary per payee and per month. That means for the rest of the salary amount that is raising above 25 000 SEK, a full social tax rate will apply (31,42%). (Meaning the tax relief can be up to 5 300 SEK per payee and per month.)
Please contact us how to fill in the employer declaration, if needed. For already declared March - salaries, there is possibility to redo the declaration.
It is important to note that this specific social tax relief cannot be combined with other regional support.
Growing-suppport (please scroll back for this news earlier in 2019) can still be set for the first employee of the company.
Abovementioned social tax relief is also effective for Sole Traders and part-owners for Handelsbolag. The tax relief is effective for up to 100 000 SEK of the profit and for the whole 2020.
Officially confirmed support from the Swedish government
Deferment /further delaying with taxes and fees:
Companies whose suffering is caused by coronavirus will get chance to apply for a certain support from the Tax Agency, state and Social Insurance Office.
There are two types of deferral:
Defer of the employer fees (social taxes), VAT and deductible taxes.
Defer of paying other type of taxes.
For the first, payment can be furthered up to 1 year from the Tax Agency decision date. Payment deferrals are for max three accounting periods between January and September 2020. The quickest way to get the decision for your company is to wait until 30th of March and use the digital service on Tax Agency’s site.
Secondary, preliminary tax payments can be changed as well.
Tax Agency will not accuse nor blame the company board members for the lack of responsibility in these times. Exceptions are companies who have record of late payments or who are obviously misusing the current situation.
Many employers can have difficulties to submit declarations on time, please note that the Tax Agency is considering that.
The following is the support and help companies/employers get:
First sick-day (karensdag): taken away/no longer in relevant. Meaning that the employees get paid from day 1 they are sick. This will be effective from 11TH of March till 31st of May 2020. All the social-insured here can request compensation back in time (retroactively) from the Försäkringskassan (Social Insurance Office).
No need for doctors-note for the first 2 weeks of illness. This is for all type of sickness, not only covid-19. Effective from 13th of March. (end date not decided).
Sick-pay for the first 2 weeks is paid by the state, instead of the employer. In effect from 1st of April.
Short-Time Work Allowance (Korttidspermittering):
This is for employers who are juridical persons or sole traders and have active business.
“Short-Time Work Allowance” means that if the business is suffering from the current virus-situation, employees can work shortened hours with still receiving more than 90% of their salary. The state will step with help to achieve this.
Employees can go down with their working hours to 80%, 60% or 40%. (nothing else, in order this help from the state to be effective).
If employee is working only 80% of their usual time, they’ll get 96% of their usual salary.
Employer pays 81% of the salary, state helps with 15% and the employee loses 4% of the salary.
If employee is working only 60% of their usual time, they’ll get 94% of their usual salary.
Employer pays 64% of the salary, state helps with 30% and the employee loses 6% of the salary.
If employee is working only 40% of their usual time, they’ll get 92% of their usual salary.
Employer pays 47% of the salary, state helps with 45% and the employee loses 7,5% of the salary.
Apply for this support from the state starting 2020-04-07, can also be applied back in dates starting 2020-03-16.
Beyond this support, the government has suggested some other things, which still are not confirmed. One of the suggestions is to temporarily lower the employer fees/social fees.
As soon as any clarification comes regarding yet unconfirmed support from the Swedish government, we’ll update you.
Proposed Crisis help-package
Proposed Covid 19 Crisis help-package for Swedish companies by the Swedish Government and Tax Agency:
This is what Swedish government discusses now, as of 18th of March 2020, we will let you know if / when it is confirmed and whether there are any changes to the initial proposal:
1. Help in case of shortened work-hours for employees:
Employers fees (social taxes) can be lowered to half through state covering the rest and the goal is that the employee will get over 90% of the regular salary.
Proposal change is to start from 7th of April and be effective the whole 2020 and can be backdated from 16th of March.
State is willing to temporarily take the sick-leave costs from Employers, during the months of April and May. The same would be effective for Sole Traders from day 1 till the 14th of sick day.
2. Liquidity help through tax account. Proposal is about the deferral of the
employer wages (social taxes, preliminary income tax of the salaries and VAT payments (that are declared monthly and quarterly). This includes 3 months of tax payments with deferral period of 12 months as longest.
It is proposed to be effective from the 7th of April but can be backdated retroactively from the 1st of January 2020.
(Explanation: the companies that have paid their taxes in January until March 2020 can have the amounts paid back by the Skatteverket. Deferral is going to be accepted only to companies who have had good tax-paying record).
This will be decided upon on the 19th of March 2020 and will be more detailed.
We will keep you updated.
3:12 Regulations about dividends
So called 3:12 regulations about dividends and taking the salary from your company.
What is 3:12 regulation?
This regulation pinpoints how a company share owners are taxed after taking out the dividends from the company. This regulation will be extended to the capital profit while selling the company.
Who can use the 3:12 regulation?
Owners of the limited company
What is the limited amount (gränsbeloppet) for this?
The owners of the company have every year right for dividends, taxed with 20%, up to a certain limited amount. (The same goes with the selling of the shares).
There are two ways to come up with limited summary. Main regulation and simplification regulation. It is up to the shares owners to decide, which one to use.
What is simplification regulation here?
This means that the limited amount is calculated with a template summary, which are 2,75 basic income amounts. Limited amounts are divided between the shares owners, with the beginning of the year status (1 January).
There is only one template summary per company and it is divided between the owners from the shares percent they owe. Let’s say there are two owners who owns 50 % each, they’ll get half template summary per person.
Template summaries for 2019: 171 875 kr and for a year 2020 – 177 100 kr
What is the main regulation?
That means the limited summary is calculated by the cost of the shares you owe in your company. Main regulation can also lead, under some circumstances, to calculate the limited amount based on the company’s paid out salaries during the previous financial year.
In order to calculate the salaries, the owners have to take out recommended minimum salary amounts and own at least 4% of the capital in the company. Having done this, it is possible to use the 50% of the company’s total salaries as the limited amount (gränsbelopp).
To take out too little salary from your company can have a big impact on your dividends. So if you want to have a possibility to count on the salaries, it is important for the owners to take out right amount for salary.
Long story, complicated story – we’ll explain further, talk to us.
Reduced shares capital
The government has proposed a new law, where the requirement for a limited company shares capital will be reduced from 50 000 kr till 25 000 kr. This will, hopefully, make a startup of own company more attractive.
Tax regulations that will be in effect from August 1st 2019
Lowered employer taxes for persons between 15 and 18 years of age. Total for the employer to pay, would be pensions tax of 10,21 %.
“Grow-support” will be extended up to 24 months. Company that will employ its first employee has a right for lower employer taxes. Changes will be executed for employments that started after the 28th of February 2018.
*Some exceptions apply, please ask us directly about this.
Other two new regulations are applying to fossil fuel in the power heating plants and taxation for electronics that contain dangerous chemicals. Interested anyway? Please let us know.
Deadline for Income Declaration
Note that 2nd of May is the last day to sign off and leave in your personal Income Declaration! That includes Sole Traders.
Tax Agency will look closer into these areas
These are the main business areas that Swedish Tax Agency has decided to look closer into when examining 2018 Income Declarations:
Food and Beverage, Construction, Car reparation, Beauty salon and cosmetic procedures.
The main focus will be in the work environment and labour issues.
AGI (Employer Declarations in the Individual level) systems are expected to help sorting out all kind of fraudelent issues.
Other business areas that are under closer scrutinity are cryptocurrency and internet sales (through social media) companies.
New laws 2019
Here we have selected some of the year 2019 new regulation that concern mostly the entrepreneurs:
Karensavdrag (the so called sick day -waiting day is replaced with the waiting (karens) deduction instead)
Practically it means that the employer can deduct 20% from the sickness payout per week.
The meaning behind this is that the deduction has the same percentage and is not dependable what time the employee applies her sickness on the first sick day.
Reduced corporation tax
Reducing will be in effect in two levels. From 22% to 21,4 % will be reduced for companies with financial year beginning after 2018-12-31 and to 20,6 % for companies with financial year beginning after 2019-12-31.
Employer declarations in individual level (AGI)
A lot talked about it already. The employer will declare employment taxes monthly to Skatteverket directly with employee’s social security number. This what was before done at the end of the year, will be now done in monthly basis.
Main entrepreneur in the construction field has responsibility for unpaid salary wages
Shortly, if the under entrepreneur is refusing to pay its employees, then main entrepreneur in this particular construction site is responsible to pay out salaries to under entrepreneurs employees. All contracts must be signed and present and this regulation will be in effect for project contracts signed after 2018-12-31.
Higher job tax deduction and higher ground deduction for pensioner
This is in focus for lower income individuals. Also pensioner will have lower income tax with this regulation.
Higher limit for state income tax for employee salaries
For a tax year 2019 employees will pay state tax with 20% for part of income that is higher than 490 7000 per year and 25% for part that is higher than 689 300 kr per year. This means that an employee’s monthly salary can be 42 000kr without the mandatory state income tax. (Before it was 39 000kr per month).
AGI declaration (employer declaration)
From January 2019 Swedish Skatteverket will imply a new method for Employer declarations. That means salary taxes will be declared in accordance with the employee’s personal numbers.
So far Skatteverket has been using so called KU10 declaration to match the employee and paid salary taxes. This will change now, to a monthly matching.
For an accounting system it means a more detailed payroll service, matching and declaring one by one. The first decalaration of AGI will be submitted in February 2019.
Traditional Christmas buffe dinner (julbord) and Christmas party - tax deductible or not?
We left a newsfeed earlier in the summer in our website that ID06 cards system will be updated to more secure version of ID06 2.0 (LoA2 – level of assurance). This means that all company existing cards will have to be replaced to a new ID06 card by latest June 20, 2019. After that date all old system cards will be shut down. New system will be based on a local BankID or Mobile BankID identification module.
There will be a different identification process for persons who do not have Swedish Mobile ID, but till date it is yet unclear what and how exactly. Most likely passport identification system.
For those who have Swedish Mobile BankID is the process as following: 1. New Registration in ID06 system, authorized signer for company will identify self with BankID. 2. New card can be ordered from 20th of October onwards. 3. Cardholder will have to identify himself also via link that is sent out to him/her. 3. ID06 card processor will approve and send out new card.
20th October 2018 is given as date when companies can start ordering new ID06 cards to its employees. Prices for the new cards are not very different from the old ones.
Corporate tax reducement
Swedish Parliament made a decision earlier in the summer of 2018 to reduce the corporate tax from the present 22% down till 20.6%. The new regulations will be in effect from the new year (January 2019) and the reduction will occur in two steps till it’s full availability by the year 2021.
In 2019 the tax reduction will be 21.4% and by the 2021 the last step of reduction process will be 20.6%.
This will also change the expansion fund tax rate and some transitional provisions regarding accrual funds and affiliated group (koncern) contributions.
Warning for all types of fraud!
It has come to media attention that there have been many fraudulent requests for Mobile Bank-ID signings. Please be alert and careful before you sign with your Mobile Bank ID and make sure that in your mobile screen comes up the name of the service provider or account where you are about to sign in, as double or “silent copying” can occur by the imposters.
Another fraud alert is for the “fake invoices”. Before making payment or agreeing to any contract or note, please make sure you know the sender and you are aware of their terms, even with their “fine print”.
Here is a published list of companies which can try to get your agreement to use their services or issuing invoices without prior contact with you.
As a brief update from ID06 related matters, we would like to let you know that Swedish Tax Agency along with the Sveriges Byggindustri has come to a conclusion where it is necessary to change the ID06 registration regulations. The plan is to change and update all up to date registered ID06 cards. The new ID06 card system project will be named ID06 AB with technical platform LoA2 (Level Assurance 2).
The reason behind the change is that there has been lot of fake cards and fraudulent registrations for non-existing employees. It is not reasonable to start the correction to the existing cards, therefore during the upcoming year all cards will have to be reissued with new regulations. New cards will be registered most likely with employers identification documents (mobile bank id) and the desired security level will be the same as bank logins.