Covid-19 - Overview of financial assistance and relief solutions in Finland - 9 April 2020 - EY
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Covid-19 — Overview of financial assistance and relief solutions in Finland 9 April 2020
Table of contents
Introduction Financial relief Immediate action items
solutions in Finland — how EY can help
Page 3 Page 7 Page 12
► Introduction ► Overview of the financial relief solutions in Finland ► Immediate action items — how EY can help
► Support package and available solutions in brief ► COVID-19 – links and resources
Page 2 14 April 2020 Relief and financial solutions to Covid-19 environment in Finland
Introduction Page 3 14 April 2020 Relief and financial solutions to Covid-19 environment in Finland
Introduction • The Government of Finland has prepared an extensive package of approximately EUR 15 billion to support companies and to alleviate the negative effects of the coronavirus epidemic • This presentation provides an overview of the current relief solutions that may support your business operations • Policy changes as well as new initiatives are being continuously proposed and implemented. We are also updating this document on an ongoing basis • Please note that additional relief packages specific to your business may also be available • Please do not hesitate to contact us if you have questions on the available relief packages or are in need of assistance. We are supporting our clients via various services to manage the crisis, minimize the business impact of coronavirus epidemic and ensure the business continuity Page 4 14 April 2020 Relief and financial solutions to Covid-19 environment in Finland
Support package and available solutions in brief - 1/2
Overview
• In the administrative sector of the Ministry of Economic Affairs • Relief on business tax payments via extensions of payment
and Employment, business financing is provided by: deadlines for VAT and payroll tax, reduced interest on late
payments and avoidance of late payment fees
• Finnvera
• Relief on pension obligations
• Business Finland • EIB Group financing
• ELY Centers • Purchases of commercial papers by the Bank of Finland
• Finnish Industry Investment (TESI)
• EUR 10 billion will be available to businesses, primarily in the
form of Finnvera guarantees
• Business Finland’s grant authorizations will be increased by
EUR 800 million
• ELY Centers’ grant authorizations for business development
projects will be increased by EUR 400 million
• TESI will provide EUR 150 million financing for midcap-
companies
Page 5 14 April 2020 Relief and financial solutions to Covid-19 environment in FinlandSupport package and available solutions in brief - 2/2
Loan guarantees Direct grants Investments Other relief
SMEs ENTREPRENEURS SMALL BUSINESSES SMEs MID-CAPs MEDIUM-SIZED All SIZED
Focus
All forms of enterprises All forms of enterprises All forms of enterprises Oyj, Oy, Ky , Ay, Osk Oyj, Oy, Ky, Ay, Osk ENTERPRISES COMPANIES
(1 to 5 employees) (6 to 250 employees) (over 250 employees) Oyj, Oy All forms of enterprises
(over 50 emplyees)
TAX
FINNISH ADMINISTRATION
Provider
BUSINESS BUSINESS INDUSTRY
FINNVERA MUNICIPALITIES ELY-CENTRES PENSION
FINLAND FINLAND INVESTMENT
INSURANCE
(TESI)
COMPANIES
Page 6 14 April 2020 Relief and financial solutions to Covid-19 environment in FinlandFinancial relief solutions in Finland Page 7 14 April 2020 Relief and financial solutions to Covid-19 environment in Finland
Overview of the financial relief solutions in Finland – 1/3
State-guaranteed loans: State-provided funding and loans:
Finnvera Business Finland
• Primarily for the support of SMEs • Funding for SMEs and Mid-cap-companies • The loans granted by Business Finland for research,
• Finnvera provides guarantees for corporate loans • Business Finland’s grant authorizations will be development and innovation activities will be
granted by a bank that can be used for the increased increased by EUR 800 million increased by EUR 300 million
working capital and other needs due to the COVID-19 • Funding for preliminary studies on business
• The total additional financing to companies amounts disruptions up to EUR 10,000 (80% of total costs)
to EUR 10 billion • Used to investigate and plan new business,
• The state is increasing the coverage of Finnvera’s alternative subcontracting chains and ways to
guarantees from 50% to 80% organize production during and after the
• May require additional collateral disruption caused by the coronavirus (applicable
e.g. for consulting services provided by external
• Finnvera is able to provide a guarantee for a EUR
parties)
12,500–1,000,000 corporate loan
• Development funding for business disruptions up to
• Applications via online service or a bank
EUR 100,000 (80% of total costs)
• Finnvera promises to contact in 1 week but the
• Used to carry out development plans identified in
situation may affect the handling time
the preliminary study or otherwise in its
• Finnvera grants the permission for a 6 months operations to improve the company’s potential for
instalment-free period for bank loans with Finnvera success during and after the disruption caused by
guarantees and to old Finnvera loans the coronavirus https://www.businessfinland.fi/en/for-finnish-
• Business Finland is flexible on changes in project and customers/coronavirus/
loan repayment schedule. Other financing is
available as normally
https://tem.fi/en/article/-
/asset_publisher/elinkeinoministeri-mika-lintila-
https://www.finnvera.fi/eng/growth/current-news-for- vahvistamme-edelleen-yritysten-koronan-aikaista-ja-
smes/current-news-for-smes jalkeista-selviytymista (only in Finnish)
Page 8 14 April 2020 Relief and financial solutions to Covid-19 environment in FinlandOverview of the financial relief solutions in Finland – 2/3
Additional financing:
State-provided funding:
Finnish Industry Investment Business tax alleviations
ELY Centers & local governments
(TESI)
• Funding for small companies and micro enterprises • TESI, together with other investors, is prepared to • The Finnish Tax Administration supports companies
• ELY consentrates on enterprises that employ 1 to provide additional financing to private equity funds and entrepreneurs during the corona pandemic
5 employees and the companies it has invested in to cater to any • The advance tax payments can be lowered upon a
needs arising from the coronavirus request of the taxpayer without interim financial
• Available grants in range of EUR 10,000 – 100,000
• TESI will also provide EUR 150 million financing for statements or other documentation
• Applications period for business disruptions
midcap-companies • The deadlines for filing in the income or real estate
caused by corona virus opened on 31.3.2020
• Investments between EUR 1 to 10 million tax returns can be postponed with a request
• ELY Centres’ business development aid, business
environment development aid, regional transport • Investing in midcap-companies which revenue is at • Interest rate for late payments has been reduced to
subsidies and business development services, can be least EUR 10 million, has over 50 employees and 4% (currently 7%) for taxes due from 1 March 2020
applied for as normally business has been profitable before crisis and has • Taxpayers can request removal of the late-filing
prerequisites to continue profitability in the future penalty if the taxpayer has a justified reason
• Support by local governments for sole
entrepreneurs will be increased by EUR 150 million • Applicable via TESI website starting 14.4.2020 • Tax Administration is also easing the terms of
payment arrangements due to the circumstances
• Taxpayers can request extension of car tax and
excise duty payments
https://www.vero.fi/en/About-us/newsroom/corona-
www.teollisuussijoitus.fi/yhtio/ajankohtaista/uutisarkist situation/the-finnish-tax-administration-supports-
o/tesi-kaynnistaa-rahoitusohjelman-koronaviruksen- businesses-during-the-corona-pandemic/
vuoksi-tilapaisiin-vaikeuksiin-joutuneille-keskisuurille-
yrityksille/ https://www.vero.fi/en/About-us/newsroom/corona-
http://www.ely-keskus.fi/web/ely/poikkeusrahoitus (only in Finnish) situation/you-can-request-a-payment-arrangement-for-
(only in Finnish) your-company-with-eased-terms/
Page 9 14 April 2020 Relief and financial solutions to Covid-19 environment in FinlandOverview of the financial relief solutions in Finland – 3/3
Pension contribution related
EIB Group funding across EU countries
alleviations
• Pension funds may grant, upon application, a • EIB has proposed a plan to mobilize up to €40 • EIB will issue €25 billion guarantee fund
postponement up to 3 months for pension premiums billion of financing for • The fund will make €200 billion funding available
paid by employers and self-employed individuals • Bridging loans, extending grace periods and through national banks and other local financial
• TyEL contributions are temporarily reduced by 2,6 other measures designed to alleviate liquidity intermediaries
percentage point and working capital constraints for SMEs and • The guarantee funds will be deployed to:
mid-caps
• Guarantee instruments to commercial banks
• Guarantee schemes to banks based on existing
• Guarantees to national guarantee schemes
programmes for immediate deployment,
mobilizing up to €20 billion of financing • Counter-guarantees to national promotional
institutions
• Accelerate and repurposing multi-beneficiary
intermediated lending facilities and other • Support for SMEs and mid-caps funded by venture
framework loans so that banks across Europe capital funds
could specifically come to the aid of impacted • Purchases of asset-backed securities from banks
businesses. Expected to mobilize €10 billion • Venture debt to high-growth companies, including
• Reprioritizing EFSI resources to make working companies active in the pharmaceutical sector
https://www.ilmarinen.fi/uutishuone/arkisto/2020/koro capital available to those who need it the most
naviruksen-vaikutuksista-elakevakuuttamiseen/ (only in through the purchase of €2 billion worth of
Finnish) asset-backed securities from banks. Expected to
mobilize total €10 billion
https://www.varma.fi/muut/uutishuone/uutiset/2020- • The companies applying for funding should contact https://www.eib.org/en/about/initiatives/covid-19-
q1/ohjeita-ja-tietoa-asiakkaillemme-koronaviruksen- EIB officials response/index.htm
vaikutuksista/ (only in Finnish) • Majority of the funds will be distributed by
European banks and local financial intermediaries https://www.eif.org/what_we_do/covid-19-
response/index.htm
Page 10 14 April 2020 Relief and financial solutions to Covid-19 environment in FinlandCOVID-19 – other links and resources
EY and Government materials on COVID-19
► EY materials:
► Responding to COVID-19 https://www.ey.com/en_fi/covid-19
► Stimulus of different countries (incl. Finland) https://www.ey.com/en_us/tax/how-covid-19-is-causing-governments-to-adopt-economic-stimulus--
► Corona virus (Covid-19), The most important labor law issues in the Nordic countries https://assets.ey.com/content/dam/ey-sites/ey-
com/fi_fi/pdf/covid-19-alert-nordics.pdf
► Government materials:
► Current issues on COVID-19 – Ministry of Economic Affairs and Employment https://tem.fi/en/current-issues
► Q&A on COVID-19 by Ministry of Economic Affairs and Employment https://tem.fi/en/questions-and-answers-regarding-the-coronavirus-and-
business-financing
Page 11 14 April 2020 Relief and financial solutions to Covid-19 environment in FinlandImmediate action items — how EY can help Page 12 14 April 2020 Relief and financial solutions to Covid-19 environment in Finland
Immediate action items — how EY can help
• EY has established a task force group with experts having detailed understanding of relief measures
and potential effects of corona-virus on various areas in business operations.
✓ ✓ ✓ ✓
Carry out the analysis whether Send applications
Prepare Auditor’s Analysis of potential areas that may be
you are eligible for described this should be initiated as
statements affected by COVID lockdown
relief packages soon as possible
Tax effects: potential effects on TP models, on the
Many packages require applications
Most relief packages imposes certain Some packages require certified taxation for cross-border employees, risks for PE if
to be sent digitally to the responsible
conditions to be eligible for support Auditor’s opinion employees cannot return to Finland in time due to
authorities
travel restrictions
Determine what packages are The application process should be Accounting considerations that should be taken into
applicable for your business and what initiated as soon as possible as the account during preparation of financial
actions are required access to applications opens now statements/bi-annual statements
Assess potential Cash Flow
Financial, Legal and employment assistance: salary
Improvement - permanently releasing
compensation, part-time work, terminations,
cash from the balance sheet and
reconstruction, supply chain, factoring etc.
income statement
Page 13 14 April 2020 Relief and financial solutions to Covid-19 environment in FinlandEY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. For more information about our organization, please visit ey.com. © 2020 Ernst & Young Oy. All Rights Reserved. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com
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