On 5 May, the European Commission gave the go-ahead for companies and organizations in electricity zones 3 and 4 to apply for electricity support. The government later announced that companies will be able to apply for electricity support from 30 May. Here we go through the basic conditions for electricity support, clarify what actually applies to receive electricity support as an entrepreneur in 2023 and how the electricity support should be reported.
What does the electricity subsidy mean for businesses?
For companies, electricity support means that all businesses and legal entities with electricity outlets in electricity areas 3 and 4 can now apply for electricity support for last year's extraordinarily high electricity prices. The support will compensate for high electricity prices during the period October 2021 to September 2022 and is given as a fixed amount per kilowatt hour consumed.
The size of the electricity subsidy is determined by the size of the company's electricity consumption during the specified period. Those with electricity outlets in electricity area 4 will receive SEK 0.79 per kWh consumed during the set period, while those in electricity area 3 will receive SEK 0.50 per kWh consumed.
Electricity support is paid from a pot of around SEK 30 billion and the maximum amount a company can receive in electricity support is SEK 20 million. The total pot comes from so-called bottleneck fees that Svenska kraftnät has received as a result of the high electricity prices and the large price differences between southern and northern Sweden.
The basic condition to be eligible for electricity support as a company is that:
- The company has had electricity outlets in electricity zone 3 or 4. Companies in electricity zone 1 or 2 are not eligible for electricity support.
- The company has had a valid electricity network contract in electricity area 3 or 4 on 17 November 2022. Companies that have signed a contract after 17 November 2022 will not receive any electricity support for that electricity outlet point.
- Companies do not have specific debts with the Enforcement Office.
- The company has not had a fixed price contract for all of its electricity consumption that started before February 24, 2022 and has been in force with the same fixed price after February 24, 2023.
How to apply for electricity subsidies for businesses?
Unlike the electricity subsidy for private individuals, companies and legal entities need to apply for electricity subsidies via the Swedish Tax Agency's website. The application opened on May 30 and will remain open until September 25, 2023.
What information is needed in the application for electricity support for businesses?
In order to apply for electricity subsidies and receive payment from the Swedish Tax Agency, the company must have a tax account and have registered a recipient account for automatic payment, which you can do in the e-service Skattekonto. In addition, all information must be filled in correctly. You can read more about the information required on the Swedish Tax Agency's website.
When is the electricity subsidy paid to companies?
The payment of electricity subsidies to companies will be made as soon as possible. According to the Swedish Tax Agency itself, the ambition is for the money to be paid a few days after the application has been submitted, provided that the application has been submitted via their online service and is complete. In other words, if you are quick on the puck, it means that companies can see their electricity subsidy as early as June.
It should also be remembered that if the company in question has tax or other debts to the state or municipality, these will be paid off first. What remains after the tax debts have been paid off is what the company will then receive on its registered beneficiary account. It is also worth noting that in some cases companies do not receive a surplus, for example if there is a decision that the company in question must pay additional tax and the due date has not yet been reached.
How should companies account for the electricity subsidy?
The electricity subsidy for companies is normally regarded as income and must therefore be included in the income tax return as a business subsidy when the Swedish Tax Agency has made a decision on the subsidy. This means that the support can be reported in annual reports relating to financial years ending in 2023 if the Swedish Tax Agency made a decision on the support no later than the balance sheet date.
For companies engaged in taxable activities, the aid should be taken up to the extent that the activity is taxable. If the company carries out activities that are fully exempt from taxation, the aid should not be taken up.
Exactly how the electricity subsidy should be reported depends on the standards applied by the company:
- A sole trader preparing simplified annual accounts K1 reports its electricity subsidy as revenue in the simplified annual accounts for 2023.
- For companies applying K2 or companies preparing annual accounts, the aid does not need to be accrued.
- For companies applying K3 , the aidshould notbe accrued.
For a more detailed description of how to account for electricity subsidies, we recommend the Accounting Board's website for questions and answers on electricity subsidies.
At the same time, it is also important to note that the rules and requirements on how to record and account for fire support may vary depending on the specific circumstances of the company and the legislation in place. Therefore, we strongly recommend consulting a accountant or tax expert to ensure that the accounting is correct for your company's unique situation.
Frequently asked questions about electricity subsidies for businesses:
When can you apply for electricity subsidies as a company?
Companies can apply for electricity subsidies from May 30 to September 25, 2023.
Which companies can apply for electricity subsidies?
All companies, regardless of their type of business, can apply for electricity support, as long as they meet the requirements to be eligible for electricity support.
Electricity support for groups - what applies?
Communities of interest such as groups can apply for electricity subsidies, but the application must be submitted jointly by the companies in the community of interest. This means that the companies in the group together can receive 20 million, and not each company individually.
When is the deadline to apply for electricity subsidies for businesses?
The deadline for companies to apply for electricity subsidies is September 25, 2023.
How much electricity support can companies receive?
Companies can receive a maximum of SEK 20 million in electricity support. Companies with electricity outlets in electricity area 4 receive SEK 0.79 per consumed kWh during the period October 2021 - September 2022, while companies in electricity area 3 receive SEK 0.50 per consumed kWh.
Can housing associations receive electricity subsidies?
Housing associations can receive electricity subsidies, and just like companies, they apply via the Swedish Tax Agency's online service.
Can a sole trader receive electricity subsidies?
Sole proprietorships can receive electricity support just like other forms of business. However, it is important for sole proprietorships to separate the electricity subsidy that relates to private consumption and consumption made in the business activity, as the latter part is subject to taxation and must be handled according to the rules for business subsidies.