World Library  
Flag as Inappropriate
Email this Article

Taxation in Sweden

Article Id: WHEBN0018443682
Reproduction Date:

Title: Taxation in Sweden  
Author: World Heritage Encyclopedia
Language: English
Subject: Economy of Sweden, Tax Code of Russia, Taxation in Greece, Taxation in Iceland, Taxation in Italy
Publisher: World Heritage Encyclopedia

Taxation in Sweden

Taxation in Sweden on salaries for an employee involves contributing to three different levels of government: the municipality, the county council, and the central government. Social security contributions are paid to finance the social security system.

Income tax on salaries is deducted by the employer (a PAYE system) and paid directly by the employer to the Swedish Tax Agency (Skatteverket).

The effective taxation rate in Sweden is commonly cited as among the highest in the world, see List of countries by tax rates.

Total tax revenue as a percentage of GDP for Sweden over the past several decades compared to other first world nations

Sweden has a taxation system for income from work that combines an income tax (paid by the employee) with social security contributions (employers contributions) that are paid by the employer. The total salary cost for the employer is thereby the gross salary plus the social security contributions. The employer makes monthly preliminary deductions (PAYE) for income tax and also pays the social security contributions to the Swedish Tax Agency.

Only the income tax deducted is visible on the salary slip. The income tax is contingent on the person being taxable in Sweden, and the social security contributions are contingent on the person being part of the Swedish social insurance plan. The income tax is finalised through a yearly tax assessment the year following the income year.[1]

Social security contributions

The specifics of the social security contributions (employer's contributions, also called payroll tax in English) may be found at the Swedish Tax Agency's Website.[2]

Example of salary taxation through PAYE

Assumptions: Income tax (Direct - 100%), Employer social fee (indirect - 31.42%)

From a pay of "100," the Employee first pays "32" in Income tax (direct - 32%); on top of that, the Employer pays an additional "31.42" in Employer's social fees (indirect - 31.42%).

Thus, from a pay check of "100," 63.42/131.42 (i.e., 48.3%) is paid as taxes, although the employer's contribution is a fee for the employee's adherence to the Swedish social security scheme. The effective rate may be lowered by, for example, earned income tax credits and private retirement savings contributions.

Value added tax

The value added tax (mervärdesskatt or moms) rate in Sweden is 25%, with exceptions for food and services like hotel room rental fees (12%), and for sales of publications, admission tickets to cultural events and travel within Sweden (6%).[3]

Income tax

Sweden has a progressive income tax, the rates for 2014 are as follows:

  • 0% from 0 kr to 18,800 kr (~0 - 2,690 USD)
  • Circa 31% (ca. 7% county and 24% municipality tax): From 18,800 kr to 433,900 kr (~2,690 - 62,140 USD)
  • 31% + 20%: From 433,900 kr to 615,700 kr (~62,140 - 88,180 USD)
  • 31% + 25%: Above 615,700 kr (88,180 USD and up) [4]

Registering a non-Swedish company or sole trader in Sweden

A foreign company conducting business in Sweden, whether a natural or a legal person, may become taxable for VAT, employer´s contributions and/or income tax. The company should then apply for registration at the Swedish Tax Agency, and may apply for a Swedish F-tax certificate.

In the ‘Tax application for foreign entrepreneurs´ brochure and form, SKV 419 and SKV 4632 respectively, there is information on how to submit the application.

Sole traders who have a Swedish personal number, and corporations that have a representative who has a Swedish personal number and who is also authorised to sign (authorised to sign by himself) on behalf of the company, may submit the application electronically through the website. is jointly managed by the Swedish Tax Agency (Skatteverket), the Swedish Companies Registration Office (Bolagsverket) and the Swedish Agency for Economic and Regional Growth (Tillväxtverket). Other foreign companies may submit their application directly to the International Tax Offices [5] at the Swedish Tax Agency by post. When registered with the Swedish Tax Agency, the foreign company receives a unique Swedish identity number. For natural persons to receive such a number they must verify their identity with a passport or another such identity card or documentation. For a legal person it is required that the identity is verified with some form of attested certificate of registration/incorporation and that the representative demonstrates his/her authority to represent (sign) on behalf of the legal person when it requests registration for taxation. Foreign legal persons active in Sweden should first contact the Swedish Companies Registration Office to ask if they are required to register a branch office. If such a registration is made with the Swedish Companies Registration Office, they will supplied with a Swedish registration number by the Swedish Tax Agency. For contact information, see the Swedish Companies Registrations Office website.

Further information in English can be found on the Swedish Tax Agency's website.[6]

Note that buying a Swedish company or Swedish real-estate does not necessarily give right of residence in Sweden. Fraudulents in e.g. Egypt have sold such assets claiming they would give right right of residence.[7]

See also


  1. ^ ' För arbetsgivare, Swedish Tax Agency (in Swedish)
  2. ^ ' Arbetsgivaravgifter, Swedish Tax Agency (in Swedish)
  3. ^ '(SKV 552)'Momsbroschyren , Swedish Tax Agency (in Swedish)
  4. ^ Skatteverket, om statlig inkomstskatt
  5. ^ ''International Tax Offices, Swedish Tax Agency
  6. ^ ' Tax registration of foreign companies, Swedish Tax Agency
  7. ^ Tomtköp skulle ge uppehållstillstånd (in Swedish)

Further reading

Swedish Tax Agency (2011). Taxes in Sweden 2010. An English Summary of Tax Statistical Yearbook of Sweden. Swedish Tax Agency. 

Swedish Tax Agency 2011. Tax registration of foreign companies in Sweden, Swedish Tax Agency's website

This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from World Library are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.