Expatriate tax - Sweden

An individual from a non-EU/EEA country must as a main rule apply and be granted residency and a work permit at the Swedish Embassy or consulate general in his/her home country before arrival to Sweden.

An individual should register for population purposes with the local tax office, if the assignment is expected to last for more than one year. The individual will then be receiving a normal tax identification number.

If the expected stay is less than one year but continuous for more than six months, an individual should apply for income tax purposes resulting in a co-ordination number (TIN) being assigned to the individual. If the individual is to work in Sweden for less than six months, there is a possibility to apply for a Special Income Tax for non-resident individuals (SINK), see more below. Also with SINK, the individual will receive a co-ordination number for income tax purposes.

Nordic citizens are not required to apply for a work permit or a residence permit. An EU/EEA citizen arriving in Sweden with the intention to stay for more than three months may have to apply for a residence card at the Swedish Migration Board. A work permit is, however, not required for EU/EEA citizens.

The tax year is the calendar year, 1 January to 31 December.

The taxpayer is liable to submit an individual income  tax return by 2 May the year after the income year. Final tax assessment statements will be sent out continuously and latest in December.

The employer shall withhold preliminary tax on employment income, i.e., Pay As You Earn (PAYE). The preliminary PAYE tax is based on annual tax tables prepared by the Tax Agency, unless SINK is approved.

From 2021, it will no longer be possible for the employee to manage the employment tax payments themselves. Instead, the foreign employer must register as an employer and manage the reports and tax payments to the Swedish Tax Agency, even if there is no Swedish PE for CIT purposes.

In addition, foreign businesses that have employees working in Sweden or conduct business in Sweden should apply for F-tax. Otherwise, Swedish companies are obliged to withhold 30% tax on invoices from foreign companies that carries out work in Sweden.

Income tax in Sweden consists of municipal and state tax. Municipal tax on salary income varies by municipality from approximately 29% to 35%. On taxable income exceeding SEK 643,100, state tax of 20 % is added.

Taxable income (SEK)               Municipal tax (%)               State tax (%)
17,300* – 643,100                           29 – 35%                                    –
643,100 +                                        29 – 35%                                  20%
 
 * Minimum basic deduction (highest is SEK 45,300) 

 Income/Reduction                                                      SEK
Employment income
Salary                                                                         800,000
Car benefit                                                                 58,900
Total earned income                                                 858,900
Basic deduction                                                        -17,300
Taxable income:                                                        843,500
Capital income 
Dividend                                                                     2500
Bank interest                                                              1,000
Interest on loan                                                        -15,000
Total capital income/expense                             -11,500
Income tax thereon 
Municipal income tax 843,500 * 31%                     261,485
State tax: (843,500 – 643,100) * 20%                     40,080
Capital tax reduction: (-11,500 * 30%)                  -3,450
General pension contribution                                  45,500
Tax reduction on general pension contribution    -45,500
Tax reduction on employment income                   -30,365
Total tax                                                                       267,750

Taxation of expatriates moving to Sweden is based on the length of their stay.

A Swedish tax resident is liable under domestic legislation to pay tax in Sweden based on worldwide income at ordinary income tax rates. A non-resident individual is subject to tax in Sweden on source income only. SINK-taxation of 25% is applicable on certain Swedish sourced income e.g. employment and pension income. An application for SINK must be submitted to and approved by the Tax Agency for it to apply.

A bilateral or multilateral income tax treaty may limit the right for Sweden to impose tax on certain types of income.

An individual will be considered a Swedish resident for tax purposes if:

1. the individual is domiciled in Sweden, i.e., has his/her actual and permanent home in Sweden, or
2. the individual stays in Sweden continuously for more than six months or on a regularly occurring stay in Sweden (short stays abroad for holidays, etc. are disregarded). The tax liability will apply from the first day.

There are no explicit rules in Swedish tax law governing what would constitute a continuous stay in Sweden. However, the Swedish Tax Agency’s opinion is that an individual who regularly stays overnight in Sweden in a consecutive period exceeding six months should be considered resident in Sweden. It should be noted that an individual could be deemed to stay in Sweden regularly where the stay in total does not exceed six months but is considered to be “continuous and recurring”.

An individual who has been domiciled in Sweden may be considered tax resident in Sweden also after a move from Sweden in case (s)he maintains so called essential connections with Sweden, e.g. earlier permanent home is maintained, or family resides in Sweden.

Generally, all earnings deriving from an activity, occasionally or regularly, are taxed as income from employment provided that the income is not considered business income or income from capital. All earnings from an employer to an employee are reportable and taxable as income from employment, i.e., wages, fees, sickness allowances, severance pay as well as benefits in kind i.e., free meals, a company car, interest free loans, travel benefits and expense allowances, e.g. subsistence allowances and travel compensation.

The source of employment income follows the OECD model treaty which means that the source of employment is generally determined by the place where services are performed.

In principle, all fringe benefits, i.e., any remuneration in kind received by an employee from the employer for services rendered, are taxable at their fair market value. For most common forms of fringe benefits there are standardized valuations set annually by the Swedish Tax Agency.

Under certain conditions, foreign key employees working in Sweden for limited periods can qualify for a reduction of the income tax liability on their earnings. There are two alternatives for the tax relief to be applicable.

One, if the gross monthly salary exceeds one and a half times the price base amount. The price base amount is SEK 58,800 (2025). If work begins in 2025, the monthly salary must be at least SEK 88,201. Two, if the employee is considered as an expert, a researcher or a key employee. The reduction amounts to 25% and is applicable only if the employer/employee has applied for a ruling within three months after the work started in Sweden.

The tax relief applies for seven years from the start of the employee’s stay in Sweden. An individual who has been resident in Sweden during any of the five years prior to the start of the assignment in Sweden cannot qualify for tax relief status. The individual may not be a Swedish citizen.

The tax relief exempts the following remuneration from Swedish tax and social security contributions:

• 25% of salaries and benefits
• moving to and from Sweden
• two holiday trips per year to the employee´s home country together with family members
• children’s school fees.

Sweden has signed tax treaties with a large number of countries to avoid or relieve double taxation of income. An individual may be considered as tax resident in Sweden and in another country at the same time. For Swedish tax purposes, residency in another country does not affect Swedish residency. However, if Sweden has a tax treaty with the other country that claims residency, tax reliefs are available.

In addition, Swedish internal tax laws allow reliefs to avoid double taxation on income, provided certain conditions are met.

All taxpayers with unlimited tax liability are entitled to a basic deduction, provided that 90% of the salary income is taxable in Sweden. This adjustment is made automatically by the Tax Agency when assessing the final taxes. The tax-free basic deduction amount ranges from SEK 17,300-45,300 depending on the total taxable income (or SEK 24,900 for the lowest taxable income).

All taxpayers with unlimited tax liability and an income from employment are entitled to a tax reduction on employment income. The tax reduction is only deductible on municipal income tax and not state tax, real estate tax or property tax.

Expenses, that are wholly, exclusively, and necessarily incurred in the performance of duty may be deducted from employment income if claimed in the income tax return. Expenses of this kind include, for example:

• additional living expenses during business travel or temporary assignment.
• travel expenses to and from work.
• the cost of using a personal car for business purposes.
• other costs which are necessary to perform the taxpayer’s duty.

Some of these costs must exceed a certain amount in order to be deductible. Others are only deductible up to a certain maximum limit or under special circumstances.

Employee mandatory foreign social security contributions are, with certain limitations, also deductible if the income is subject to income tax in Sweden.

Interest income, dividends and capital gains are taxed at a flat rate of 30%. Generally, 70% of capital losses are deductible. A tax reduction is granted on losses exceeding income on capital, resulting in a net loss. The reduction is 30% of the net loss up to SEK 100,000 and 21% on amounts exceeding SEK 100,000.

There is no gift or inheritance tax in Sweden.

See ‘Personal asset tax’ above.

Not applicable, except municipality tax on employment/pension income.

A municipal charge is levied on family houses instead of real estate tax. The charge varies depending on the type of house and construction year. The amount of property charge is calculated at 0.75% of the property´s assessment value in 2025, up to an upper limit of SEK 10,074 per residential building. Family houses abroad are not subject to the municipal charge.

Real estate tax is still levied on other property, e.g., undeveloped land.

The statutory social security charges amount to 31.42% (2025) of the total remuneration paid to employees including all taxable benefits in kind. Employees do not contribute to these charges and are only payable by the employer. Further, an employer pays, on average, an additional 24.26% of salaries to cover the cost of contractual pension plans.

Employees are charged a pension insurance fee of 7% of employment income. The maximum charge is SEK 45,500 (for income year 2025). The charge is fully credited so this has no real effect on the income tax payments for the employee.

The social security charges for foreign employers without a permanent establishment in Sweden is reduced to 19.8% (2025). A foreign employer without a permanent establishment in Sweden can agree with the employee, that the employee will pay the social security costs on the employer’s behalf. The employee has to file an application and register with the Tax Agency to pay monthly contributions under such agreement. However, please note that this is less common after the legislation update during 2021 that foreign employers are obliged to register as an employer and report and pay the income taxes. It is then easier if the foreign employer also reports the social security contributions.

Stock options classified as employee stock options according to Swedish legislation are generally taxed as employment income upon exercise. The taxable benefit is equal to the difference between the fair market value of the stock on the date of exercise, and the option (exercise) price.

As the tax treatment of equity-oriented plans is complex in Sweden, and the classification of each plan is very important, we strongly recommend that this issue is discussed with a Grant Thornton Sweden tax specialist.

There is no wealth tax in Sweden.

An individual who is not a member of the Swedish Church, or some other specific Church, still has to pay a burial fee. The fee depends on the municipality and the average burial fee is 0.293% (income year 2025).

Earnings description                                  Planning possible
Base salary                                                           Y
Bonus                                                                     Y
Childcare                                                              N
Club membership                                                N
Company car                                                       Y
Cost of living allowance                                     Y
Education/Schooling                                          Y
Home leave                                                          Y
Housing                                                                Y
Medical expenses                                               Y
Moving expenses                                                Y
Pension scheme                                                  Y