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COVID-19 poses major challenges for many businesses to secure liquidity and remain competitive. Support measures from the Swedish government include the possibility for companies to introduce short-term work and the possibility to apply for liquidity enhancement through the tax account. Many countries are introducing similar and other support measures that will become highly relevant for companies with a global presence. KPMG Tax & Legal provides ongoing advice to customers in this new situation.


We have summarized some of the key issues that businesses need to monitor and plan around:

Foreign state aid and liquidity-boosting measures

Many countries now introduce various support measures in parallel with Sweden to facilitate for and assist domestic companies. Much happens in a short space of time and it can be difficult to navigate through the information flow from different countries. In most countries, there are already-existing solutions available. In Sweden, for example, it is possible to reduce provisional tax payments. 

For global companies it is critical to be able to easily navigate all the support measures and solutions available in different countries, in order to make well-balanced decisions.

Liquidity boost through the tax account

The government has proposed new rules to boost liquidity through the tax account. Companies can, upon application, be granted deferred payments of employer contributions, preliminary tax on salary and value added tax; these are normally reported and paid monthly or quarterly. The deferral covers three months of tax payments and is granted for a maximum of 12 months. 

The regulation enters into force on April 7, 2020 but can be applied retroactively from January 1, 2020. Companies that have already paid in taxes and fees for previous accounting periods can thus have the tax refunded from the Swedish Tax Agency. A deferral fee of 0.3 per cent of the stated deferred amount per month is levied, together with the usual tax account interest. A longer deferral can therefore incur considerable costs for the company, which should be compared with costs for alternative financing.

Short-time work compensation

Short-term leave/layoffs are introduced to save Swedish jobs. Under the new regulation, the employee can keep more than 90 percent of their salary. An income ceiling of SEK 44,000 per month applies. The new regulation enters into force on April 7, 2020 and applies from March 16, 2020. The state's share of the cost, within a framework for compensation, is three quarters of the salary cost.

The introduction of short-term work requires that employers and employees agree that the measure is appropriate to meet a temporary and serious financial difficulty. The temporarily increased level of support shall apply during months which fall between 16 March and 31 December 2020. The Swedish Agency for Economic and Regional Growth (Sw: Tillväxtverket) is responsible for managing and deciding on the support. The support should be provided in special cases, following a well-motivated application.

Here you can read more about the new system for short-term leave subsidies:

Financing and cash flow

Cash flow may be tight both during and after the ongoing pandemic. Not least, cash flow is affected by the new support measures made available by the Swedish government, regarding liquidity in the tax account and short-term leave. The picture is made even more complex with support measures and solutions available in other countries. But the overall analysis is vital for global businesses that want to make the right decision to strengthen liquidity.

Long-term effects

A disruptive event such as COVID-19 has put many businesses to the test and challenged previously functional business models and structures. In the longer term, this may mean that the whole organization needs to be reviewed. This may lead to a need for a review of a Group's financing, or a need for restructuring, such as relocation of production operations. Also in the shorter term, the organization can be affected by temporary relocations of functions and assets.

Customs and global flow of goods

Suppliers in severely affected areas may find it difficult to produce in accordance with agreements, which leads to a shortage of input goods and materials for the manufacturing industry. Companies are trying to find alternative products and / or suppliers, so importing and exporting companies need to pay attention to updating any customs permits. In addition, we may soon find ourselves in a situation where a lack of input goods and materials leads to the imposition of export duties and restrictions.

On March 14, 2020, new rules were introduced regarding export controls for protective equipment, such as gloves, protective suits and protective masks. It is therefore extremely important to keep abreast of new rules and tariffs. Through the National Board of Trade (Sw: Kommerskollegium), companies can apply for tariff exemptions or tariff quotas for goods that are currently sold outside of the EU. Manufacturing companies should pay attention. If it turns out that a company within the EU is applying for a tax exemption or tariff quota for the same, similar or substitute product that your company manufactures, your company has the right to object to the application. We therefore encourage companies to keep up to date via Kommerskollegium and the Customs Administration's websites.

Corporate law issues

Against the background of the effects of the corona virus, many different issues arise related to the Companies Act. There may be questions about the holding of general meetings, transfer of value issues, capital adequacy issues, board responsibilities linked to the Companies Act, but also to joint and several liability for taxes. 

KPMG can advise on, among other things, general meetings and dividends. KPMG can also assist you with all tax and legal issues that arise in connection with COVID-19.