Deferred with VAT
As a result of the corona, the tax authority can grant so-called temporary deferrals with the payment of value added tax.
Work at home does not lead to a permanent establishment
Work at home due to the corona pandemic does not lead to a permanent establishment. See examples of work at home during the pandemic that does not lead to a permanent establishment .
Change to the closing method
The Swedish Tax Agency considers that the current situation with corona is such an extraordinary circumstance that a change to the year-end method can be accepted. However, this presupposes that the company’s total annual sales in this country are estimated to amount to a maximum of SEK 3 million (Swedish Tax Agency’s position Accounting of VAT during the corona crisis ).
Gifts and free parking – temporary tax exemption
To alleviate the financial consequences of the corona, an employer has the opportunity to temporarily give tax-free gifts to employees up to a value of SEK 1,000 per employee ( Section 3 of the Act [2020: 374] on temporary tax-exemption for the benefit of free parking and gift to employees ). Tax exemption applies in addition to the tax-free gifts that already exist, such as Christmas gifts. The Temporary Employee Gifts Act applies from June 1 to December 31, 2020.
The benefit of free parking in connection with the workplace is also temporarily tax-free due to the corona ( Section 2 of the Act [2020: 374] on temporary tax-exemption for the benefit of free parking and gift to employees ). This tax exemption applies from 1 April to 31 December 2020.
The Swedish Tax Agency considers that any restriction on the right of deduction due to private consumption need not be made for input tax for personnel care costs and gifts of personnel care nature if the benefit is tax-free for the employee in the income taxation. The Swedish Tax Agency considers that the same should also apply to the temporary tax exemption of gifts and free parking as a result of the Act (2020: 374) on temporary tax exemption for the benefit of free parking and gift to employees.
Import of goods for protection against and control of covid-19 is tax-free in some cases
The EU Commission has decided to temporarily exempt from customs and value-added tax on imports of goods for the protection and control of covid-19. This applies to imports made by or on behalf of government agencies, public bodies and other bodies governed by public law as well as by disaster relief organizations and other organizations that have been approved by the Customs Administration.
Customer losses – special assessment
Corona (covid-19) affects many companies financially, which may mean that they cannot pay their suppliers. During the ongoing pandemic it may be considered probable and thus it can be presumed that the buyer is unable to pay his debt if certain conditions are met. If these conditions are met, the seller may reduce the tax base due to customer loss. See also Special assessment for corona .
Conversion support is not turnover according to ML
Restructuring support to companies according to law (2020: 548) on restructuring support is not considered compensation for a service provided. Therefore, no value added tax should be reported on conversion support that a company has received. Read more about the support on the pages under Adjustment support for corona.
Sampling for covid-19
Diagnostic tests to show if a person has covid-19 disease and antibody tests for covid-19 may be services defined as medical care according to ML. Read more under Sampling (about the service) and Similar activities (about the actors).
State aid for a discount on rent
The landlords who have lowered the fixed rent for their tenants in certain vulnerable sectors may seek support to offset some of the rent reduction. When leasing a premises subject to tax liability, the accounting is affected by value added tax.
The government has listed which industries are covered by the rental subsidy .
Value added tax on aid at discount on rent
State aid is a so-called grant that is directly linked to the price . This means that the support is part of the tax base and is treated as part of the total rent compensation for the rental to the tenant. Therefore, if a landlord is liable to pay VAT on the rental of a premises, VAT must be levied on all rent payments, ie also on the state aid. See Example: calculation of the tax base .
When renting out a premises that is subject to tax liability, the rent is normally determined at an amount exclusive of value added tax with a surcharge for value added tax. In such agreements, the tenant must pay the value added tax even on the amount of the aid. See also invoicing of the support for a discount on rent.
If the parties, when leasing a premises subject to tax liability, have determined the rent at an amount that includes VAT, the aid may also be considered to include VAT. See the Tax Agency’s opinion on the appearance of the invoice when contributions are directly linked to the price .
If a landlord lowers the taxable rent to a tenant in one of the sectors covered by the tenancy, the reduction made will consist of two parts: one part which is the subsidy and one part which is a price reduction .
The landlord shall not issue any invoice to the grantor who pays the state aid in the case of rent rebates, but shall only invoice his tenant. Since this is a so-called grant that is directly linked to the price, it is not a turnover to the grantor, but only a turnover from the landlord to the tenant. See Example: State aid for a discount on fixed rental costs .
There is no time limit in ML for issuing invoices when renting premises. See Other sales .
Invoicing of the support at a discount on rent
In cases where the tenant is to be charged VAT on the aid, the landlord can provide information on both the discounted rent and the VAT on the future state aid in a single invoice. If the landlord wants to, instead the value added tax with 25 per cent on the state aid can be charged to the tenant afterwards. For information on an invoice, see The contents of an invoice.
Reduction of previously reported closing tax
If a taxable landlord has already reported the outgoing VAT on the rental and then makes a rental reduction, the outgoing tax may be reduced by an amount corresponding to the VAT on the reduction (see Reduction of the price ). This does not apply if the parties have agreed that the price reduction shall not reduce the tax base when the reduction is made after the supply.
To be able to get back the outgoing VAT on the rent reduction, a credit note is required.
Reporting of VAT on state aid
The outgoing tax on state aid in the event of a discount on rent shall be accounted for in accordance with the method that the landlord applies for its accounting. Different times for reporting the value added tax apply to the billing method and the year-end method .
The right to deduction for input tax is not affected by the landlord receiving state aid that is directly linked to the price, such as state aid in the event of a discount on rent.
Read about what happens in case of customer loss when the seller receives a contribution directly linked to the price .
Anyone who conducts an activity that results in tax liability is entitled to deduction for input VAT . The right to deduction also exists for the value added tax payable on the aid, even though the aid itself at the discount from the landlord of the rent has been paid by a third party (see the Swedish Tax Agency’s statement on the appearance of invoices when contributions are directly linked to the price ). Depending on whether the agreed rent for taxable rental should be exclusive or inclusive of VAT, there will be different VAT amounts to pay for the tenant (see VAT on support when discounting rent and Example: calculation of the tax basis ).
The right of deduction shall be substantiated with an invoice as a basis for the right to deduct .
Rental of premises and hotel rooms – special issues during the corona situation
The Swedish Tax Agency has published information on various situations that may arise when renting out premises and hotel rooms during the corona situation, including. temporary rental of medical facilities, rent-free months, shorter leases, rented premises and rental of hotel rooms for longer than normal, eg. evacuation accommodation, or for use other than normal. Read more on the Corona page – information for companies, associations and public actors under the heading VAT and rental of premises and hotel rooms during the corona situation.
Hire of healthcare personnel
Hiring of staff to the region’s emergency hospitals according to the changed state of emergency due to the corona is not a service closely related to health care (see example of hiring of staff according to the changed state of emergency due to the corona ).