Sweden

Flag Tax of Sweden

Corporate tax

Rate

The corporate tax rate of Sweden is 26.3%. Corporate tax is imposed on company profits. Company profits consist of all types of income. Business expenses are deducted from these incomes in order to arrive at the profit, though certain permanent nondeductible items exists.

Taxation of dividends

Dividends received by a Swedish resident company from another Swedish company are exempt provided the shareholding is business-related, thus certain participation exemption applies. Dividends not exempt is taxed as business income at a tax rate of 26.3%.

Capital gains

Capital gains from the sale of shares in resident companies are tax-exempt as long as it’s considered business-related, thus certain participation exemption applies. Shares from EU resident companies, even such held as inventory are considered business related, provided the holding represent a minimum of 10% of the capitalĀ  and other criteria are met. Capital gains not exempt is taxed atĀ a tax rate of 26.3%.

Losses

Losses can be carried forward indefinitely.

Withholding tax

Dividends is taxed at 30%, if the dividends is paid by a Swedish company to a foreign company. This may be reduced or exempt, provided there is a tax treaty, domestic participation or EU parent-subsidiary directive.

 

Individual tax

General

Individuals living or regularly residing in Sweden is considered a resident for tax purpose. Individuals that has been living in Sweden previously is considered resident even after departure, if he or she has essential ties, such as a permanent home or family.

Taxable income

Sweden imposes a three category layer. Business income, Employment income, Capital income.

The average municipal tax rate is around 31%. National income tax is 20%, which is taxed on income exceeding SEK 395,600, A higher national tax of 25% is taxed on income exceeding SEK 560,900. A total maximum tax rate of ~57% may be used. Dividends and interest income is taxed at a flat 30% rate.

Rates

Progressive tax rates of 31% to 57%. The capital income is taxed at 30%.

Penalties

Penalties includes an initial late fee of SEK 1,000 for late returns by individuals. If failure to comply continues additional penalties may be applied. A surcharge of 40% of the tax due on hidden income is taxed if incorrect information has been provided, may be reduced to 10% if tax authorities has access to this information already.

Capital Gains

Capital profits are taxed at a rate of 30%.

Deductions

Expenses incurred for the purpose of acquiring or maintaining income may be deducted against the income acquired from the work. Deductions may also be applied from employment income from work-related travel expenses and increased living expenses while work-related travel. A tax reduction of 50% of costs related to housekeeping is also available, since this is considered a cost of repair, maintenance and rebuilding. The tax reduction is limited to SEK 50,000 a year.

Real Estate

Individuals are subject to a municipal fee of a maximum SEK 6512 on real property owned in Sweden.

Net Worth Tax

There exist no net worth tax in Sweden.

Inheritance Tax

There is no inheritance tax in Sweden.

Social Security

Employed individuals, contributes to the social security directly from the employer, except for the pension insurance fee of 7% on employment income of up to SEK 420,447. A maximum charge of up to SEK 29,400 may be applied, and is fully creditable against other income taxes. Self-employed contributions is 28.97%, plus the pension insurance fee of 7%, for income of up to SEK 420,447. Individuals younger than 26 and individual born 1938-1945 is included.

VAT

VAT applies to all sales of goods, services and imports. The VAT is 25%. VAT for food and certain tourism is 12% and VAT for newspaper, periodicals and domestic passenger transport is 6%. There are specific transactions that are exempt from tax.

 

Other

Tax year. Calendar year.

Tax treaties. Sweden currently has 80 treaties.

Filing requirements. Paid monthly or quarterly, however if the company has a turnover of less than SEK 1 million, VAT may be reported in the income tax return.

Registration (for VAT purpose). If the company is liable to VAT in Sweden, it must register for VAT purpose.

 

Links

Tax authorities. Swedish Tax Agency

Consulate

Local Tax Resources

Chamber of commerce

(Online realtor/stock exchange)