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Aid package for COVID-19 pandemic in Finland

The Finnish government is proposing a EUR 15 billion aid package to prevent the effects of the coronavirus.

The Finnish Government has prepared in due course a proposal by the Government to increase Finnvera Plc's domestic financial authorization from the current EUR 4.2 billion to EUR 12 billion.

Within the current mandate, Finnvera plc is able to increase corporate financing by EUR 2 billion, so raising the authorization to EUR 12 billion will enable additional financing for companies of EUR 10 billion. In addition, the share of the State's compensation for credit and guarantee losses to Finnvera will be raised from 50% to 80%. With the withdrawal, Finnvera can increase its risk taking in an uncertain situation. 

Temporary changes in the co-determination procedure and layoffs.

The government decided on measures to make lay-offs as flexible and cost-effective as possible in the exceptional circumstances caused by the corona virus.

The notice period of 14 days laid down in the Employment Contracts Act is reduced to five days. In addition, the right to lay-offs is extended to cover fixed-term employment contracts to the same extent as for contracts of indefinite duration. In the event of a lay-off, the employee has the right to unemployment benefit and the right to terminate the employment contract despite the fixed term.

In the case of lay-offs, the minimum consultation periods of the Act on Labor shall be reduced from the current 14 days and the current six weeks to five days each.

These measures are designed to safeguard the future of businesses and to safeguard jobs in the long term.


Unemployment benefits

At the same time, it was decided that small entrepreneurs would have access to the same unemployment benefits as wage earners.

Pension contribution discount

Temporary reductions have been proposed in the employer's pension contributions. This discount will be implemented. The reduction shall be 2,6 percentage points and shall take effect as soon as possible, but no later than 1.6.2020. The discount is valid until the end of 2020. The effect of the discount will be recouped between 2022 and 2025 by increasing the employer's contribution to the earnings-related pension.


Free months for loan repayments

You are able to apply free months for loan repayments from your bank. Most of the banks grant 6 months for private customers and 3 months for business customers.

Income tax returns

Most companies end their financial year on December 31st. and the tax return must be filed by April 30th. In case of illness, it is possible to get an extra time for the tax return.

Returns for self-assessed taxes

In principle, no extra time is granted, but the tax administration has stated that it will not charge late fees or interest.

 

Corporate taxes (prepayments)

It is possible to appeal against advance taxes due to the changed economic situation. Applications will be processed on an accelerated schedule.

 

Simplified tax payment arrangements

The terms of the facilitated payment scheme apply to applications filed March 25.3-31.8.2020

  • The first installment will not be due until three months later, instead of the current one month.
  • New incurred debts will be automatically transferred to the payment facility until May 31, 2020
  • A reduction of 7% -> 4% is proposed for the interest rate. This has not yet been confirmed.

Payment arrangements are available only if:

  • The company has no taxes on collection
  • All notifications are on schedule

 

Entry Restrictions

The Finnish state borders will be closed from commuting on Sunday 22.3.2020. On the basis of a permanent employment relationship, crossing the internal border is only allowed in natural working areas on the Swedish and Norwegian borders.

The decisions made will silence Estonian workers on construction sites in southern Finland, for example, if the workers have left Estonia for the weekend. Thus, for Estonian workers, the border is almost completely closed. Only those working on construction projects critical to security of supply are allowed to cross the border.

In addition, the necessary traffic is still allowed. According to the Border Guard, an Estonian citizen working as a driver in a haulage company operating in Finland may move across the border to Finland. The movement of transport staff is considered to be a necessary transport authorization. In addition, the movement of health and rescue professionals is also essential.

 

Planned restrictions, not implemented yet

The government is planning measures to close restaurants to customers (Take away and home delivery would work) and to restrict domestic travel to prevent the virus from spreading.

The above information is based on current knowledge and the content of the changes and restrictions may change.


Useful webpages:

Valtioneuvosto Statsradet


Veroskatt


Raja


24.03.20


Author:   

Kalle Elonen

Kalle Elonen

Managing Director

Mobile: +358 44 7451 353

Email: kalle.elonen(at)leinonengroup.fi

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