Government decides on development of business financing and reborrowing of value-added tax

Government Communications Department 24.4.2020 21.10 | Published in English on 24.4.2020 at 21.29
Press release 284/2020

In its negotiations on 24 April, the Government heard a report on the situation in the restaurant sector. The Government held a preliminary discussion on compensation for the losses incurred due to restaurant closures.

In the case of restaurants, preparations will continue with a model in which support will be provided to compensate for fixed costs and to enable the re-hiring of personnel. The Government will submit a bill on the model to Parliament as soon as possible.

The Government also decided to prepare a proposal for Parliament on the re-lending of value-added tax to businesses in early 2020.

According to the plan, VAT paid in the earlier part of the year could be reimbursed to businesses. The condition is that the reimbursed and deferred VAT would be paid back to the State over a period of two years. In other words, it is a loan to businesses in which they can borrow back the value-added tax they have already paid.

In addition, the Government decided on preparations for an arrangement through which a zero tax rate would be applied to the procurement by health and social service sector operators of personal protective equipment produced in Finland and the EU.

The Government also discussed the development of business subsidies granted by Business Finland and the Centres for Economic Development, Transport and the Environment. The Government decided that these subsidies would be further developed to better respond to the financial difficulties faced by businesses due to the COVID-19 epidemic.

The objective is that the subsidies granted could be targeted more towards businesses’ fixed costs as part of development activities. However, the development of business activities will remain one of the criteria for granting the subsidies.

In its negotiations, the Government also decided to submit a legislative amendment for comments that would temporarily amend the Act on Fairway Dues. In line with the amendment, the charging of fairway dues would be discontinued for the rest of 2020 and the dues collected in the earlier part of the year would be reimbursed.

Inquiries: Päivi Anttikoski, Director of Government Communications, tel. +358 40 5364 821