Additional measures came into effect on 1 June with the aim of reducing the spread of coronavirus and increasing consumption to reduce the economic impact on companies. There are temporary tax exemptions for certain benefits that employees may receive from their employers.
Tax-free parking
Free parking is usually a benefit taxed based on its market value. On 5 May, the Swedish government put forward a proposal, which has now been adopted by parliament, to stop taxation of this benefit from 1 April until the year-end. The aim of the measure is to keep the spread of the virus in society down by reducing the use of public transport by people who are unable to work from home and therefore still need to get to and from their workplace.
During this period, employers who offer their employees parking in connection with their place of employment are not burdened with costs for social security contributions for the value of the benefit and neither does the employee have to pay income tax based on the market value of the parking. The measure also entails a retroactive tax exemption from 1 April, which in purely administrative terms means that salaries that have already been processed may have to be corrected and PAYE tax returns may have to be re-submitted. It may also require changes to procedures and guidelines for parking during this period.
For employees with an official vehicle and who are taxed for this, free parking at the workplace is included in the value of the benefit of the car as before. There is no change for these people during the period 1 April to 31 December; instead the value of the benefit remains unchanged.
Gifts to employees
The second measure concerns temporary tax exemptions for gifts to employees for the period 1 June to 31 December 2020. The gifts can amount to a maximum of SEK 1,000 per employee and may take the form of gift cards, services or products, but not money.
Some gifts such as Christmas gifts are already exempt from tax if they amount to a maximum of SEK 450 per employee including VAT, but the new exemption applies in addition to existing tax exemptions. The aim of this measure is to stimulate consumption so as to lessen the negative economic effects on companies. Buying gifts or services from local suppliers can benefit the business community and could prove to be the salvation of several businesses, while at the same time the employer can show their appreciation for their employees during these difficult times.
Have you thought about any of the new rules that have been introduced in response to the coronavirus pandemic? Would you like advice or practical help? Feel free to contact us at Azets!