Tax rates in Sweden

Company Tax

20.6%

Tax Rate For Foreign Companies

Resident taxpayers are taxed on global income while foreign taxpayers are taxed only on the profits they make in Sweden. There are no special tax rates for foreign companies and no withholding tax is levied on the repatriation of taxed profits.

Capital Gains Taxation

Capital gains from a business-related sale of shares in a resident company are generally tax-exempt (conversely, losses are not deductible). Quoted/listed shares are considered held for business reasons if the company has a holding corresponding to at least 10% of the voting rights or the shares are held in the course of the business for a period of at least one year; while shares that are not quoted or listed are always considered as held for business reasons. Capital gains that are not considered business-related are treated as commercial income and are taxed at 20.6%.

Main Allowable Deductions and Tax Credits

Expenses incurred for business operations are generally deductible, including arm's length interest payments, rents and royalties, depreciation, losses and reserves. General start-up expenses for generating and maintaining business income are normally deductible. Bad debts are also deductible if they can be proven to be wholly or partially worthless.

Generally, interest payments made to related companies can be deducted if certain conditions are met. These conditions include the true lender being a resident in the European Economic Area (EEA), a jurisdiction with a comprehensive double taxation agreement, or being subject to a minimum tax rate of 10% on the interest earnings. The deduction for negative net interest related to internal and external loans in the corporate sector is limited to 30% of EBITDA.

Charitable contributions are generally non-deductible. Certain items such as profit distributions, entertainment expenses exceeding a certain amount and taxes are non-deductible. Double taxation relief is provided for Swedish companies that are taxed abroad. A foreign tax credit may not exceed the amount of Swedish income tax attributable to the foreign-sourced income.

Land improvements may be depreciated at the rate of 5%/year of the acquisition cost, and buildings at rates between 2% and 5%/year of the taxable basis. The maximum allowance is 100% of the tax basis of the improvement/building.

Net operating losses can be carried forward indefinitely, except in the case of a direct or indirect change in the ownership structure of the company. The carryback of losses is not permitted.

Other Corporate Taxes

Business premises are subject to an annual real estate tax rate of 1% based on the assessed value of the property. However, for industrial property, the tax rate is reduced to 0.5%. Different tax rates apply to special property categories.

For the transfer of real properties, a stamp duty of 4.25% is levied on the acquisition value or the value estimated by tax authorities (the highest value is used for the calculation) when the transferee is a legal person. The rate varies between 0.4% and 2% for mortgages.

Employers pay aggregate social security contributions of 31.42% for employed individuals, with exceptions: 0% for those born in 1938 or earlier, and 10.21% for those born from 1939 to 1953. This includes a pension insurance fee of 7% on employment income up to SEK 599,250, which can be fully credited against other income taxes. Self-employed individuals contribute 28.97% plus a 7% pension insurance fee on income up to SEK 599,250, with a reduced rate for those born in 1952 or earlier.

Various environmental taxes have been introduced in recent years, including the energy tax, the carbon tax and the sulphur tax.

Other Domestic Resources

Swedish Tax Agency

Tax Rate

Allowable Deductions and Tax Credits

Generally, all expenses related to an employment relationship are deductible (including travel expenses, automobile expenses, living allowances on business trips, necessary literature, and tools of the trade).
Resident individuals receive a personal allowance, deductible from the income tax base, depending on employment income. For low-income, the minimum deduction is SEK 16,800 and the maximum is SEK 42,700 (2024).

Personal pension insurance premiums and contributions to restricted pension savings accounts are deductible within certain limits, but only if the employee is not included in an employer-funded company pension plan. Interest costs paid to Swedish or non-Swedish lenders are deductible.

Several tax reductions are available: 50% of the labour costs relating to housekeeping is available (capped at SEK 50,000/year); 30% of the labour costs relating to repair, maintenance and rebuilding of a private dwelling (up to SEK 50,000/year); however, such reductions cannot exceed SEK 75,000 per person per annum. A deduction is also permitted for increased cost of living, generally for 2 to 3 years.

For more information, consult the website of the Swedish Tax Agency.

Special Expatriate Tax Regime

Residents are taxed on global income while non-residents are only taxed on their income received in Sweden. Individuals who are not residents of Sweden but work for a Swedish employer or a foreign employer with a permanent establishment in Sweden are subject to a flat tax rate of 25% deducted at the source. This rate also applies when a pension is paid by a Swedish entity to an individual who is not a tax resident of Sweden.

If non-residents work in Sweden for a non-Swedish employer that does not have a permanent establishment in Sweden, they become liable to pay taxes in Sweden if the work they perform is under the direction and control of a Swedish entity and the beneficiary of their work is also a Swedish entity. In such cases, the applicable tax rate is 25%. However, there is an exception to this rule if the employee works in Sweden for less than 15 consecutive days and a total of fewer than 45 days during a calendar year.

Foreign experts and key personnel working for a Swedish company or a non-Swedish company with a presence in Sweden can request 'expert tax relief'. To be eligible, the employment and stay in Sweden must be temporary, the employee must be a non-Swedish national, and they should not have been a Swedish tax resident in any of the five calendar years preceding their employment in Sweden. Alternatively, the expert tax relief can be granted if the monthly income exceeds two times the Swedish price base amount for the year the employment begins. In 2024, this threshold is SEK 114,600 per month. To qualify, the employee needs to apply for a ruling from the Taxation of Research Workers Board ("Forskarskattenämnden") within three months of starting work in Sweden.