Tax regulation for residents abroad

• income from employment
• payments received from a social insurance office
• pensions

The tax rate is 25 per cent of income.

N.B. This brochure only covers earned income.

The payer/employer shall made a deduction for the special income tax and pay it to the tax authorities. Since the tax is definitive, this income shall not be declared for tax purposes by residents abroad.

If a person who is resident abroad has other income in Sweden (for example, from real estate), such income shall be declared in the special income-tax return. The resident abroad shall then submit an incometax return for certain income and also be taxed according to the Special Income Tax Act on other income.

It should be observed that a person resident abroad, but living on a regular basis in Sweden for more than six months, may be considered resident in Sweden for tax purposes despite the fact that his or her place of abode is in another country. In this case, the usual rules for national and local income tax are applicable.

Tax-exempt income

A person resident abroad is not required to pay special income tax on, for example:

• remuneration from a foreign employer who has no workshop, office, etc. in Sweden and which relates to work for a period of less than 183
• days during a 12- month period,
• reimbursement of expenses for lodging during the period when the work/assignment was carried out in Sweden,
• reimbursement of expenses for travel to and from Sweden at the beginning and at the end of the work/ assignment,
• income on which special income tax for artistes is payable,
• payments received from a Swedish authority based abroad or from a Swedish international development authority (applies to a locally recruited person who is a citizen of the country in which he or she is working),
• payments which are tax-exempt according to a double tax agreement.

Taxable income

• pay and benefits related to employment by, or an assignment from, the Swedish government or a Swedish municipality, irrespective of the locality where the work is performed,
• pay and benefits related to employment in private service if the work is carried out in Sweden,
• directors' emoluments and similar remuneration received from a
• Swedish company, irrespective of the locality where the work is performed,
• holiday pay, etc. related to income from employment as stated above.

Payment received from a social insurance office, etc.

The following are examples of taxable income:

• compensation for illness or accident at the workplace or other insurance in accordance with the National Insurance Act,
• life annuity because of occupational injury (taxable portion).

Taxable income comprises

• old-age pension and widow's pension under the National Insurance Act (the portion exceeding the national basic pension received and the pension supplement received),
• early pension under the National Insurance Act (the portion exceeding the national basic pension received and 52 per cent of the pension supplement received),
• pension related to employment by, or an assignment from, the Swedish government or a Swedish municipality,
• private retirement pension from Sweden,
• sums paid under private pension-insurance schemes from Sweden,
• sums paid from pension savings accounts managed by a Swedish pensions savings institution or by a foreign institution's branch office in Sweden in accordance with the Individual Pension Savings Act.

If a person resident abroad is a Swedish citizen, pension-carrying income (PCI) shall, as a rule, be calculated on income liable to special income tax. In addition, in certain cases, PCI shall be calculated for people who

• are citizens of an EU country or
• are covered by the EEA Agreement or when the Nordic. Convention on Social Security is applicable.

Applications for a decision on special income tax for foreign residents shall be submitted to the tax authorities on form RSV 4350.

It should be observed that the payer/employer can submit the application. In the case of pensioners, the application is generally submitted by the payer.

A decision on special income tax is given by the tax authorities in the county in which the employer is registered or resident. As regards income not related to work in Sweden (for example, pensions), the decision will be given by the Tax Authority in Stockholm.

Tax deduction

Special income tax is levied at a rate of 25 per cent of taxable income (not rounded off). Taxable income comprises pay, any benefits received, reimbursements of expenses, pensions, etc. Taxable income does not include reimbursements for travel to/from Sweden at the beginning and at the end of employment or the place of abode in Sweden. No deductions for expenses are allowed.

The payer/employer is required to make tax deductions for special income tax.

However, a person who is resident abroad and employed by a foreign company that has no office, workshop, etc. in Sweden is responsible for paying his/her special income tax. In this case, the local tax office should be contacted.

Remaining tax

A person resident abroad is responsible for paying any remaining tax if the payer/employer does not make a deduction for remaining tax.

Preliminary tax

If a person resident abroad has to pay some other tax (for example, on real estate in Sweden), an application to be charged with preliminary tax should be made to the Tax Authority in Stockholm.

Statement of earnings

A statement of earnings must be submitted by the payer/ employer to the tax authorities not later than 31 January in the year following the income year (green form).

Payroll tax

Payroll tax shall be paid on employment income (pay, fees, benefits in kind, reimbursements of expenses, etc.).

Exceptions: Payroll tax is not payable on

• remuneration that per year amounts to less than SKr 1,000 per employer,
• reimbursement of expenses for lodging during the period when the work/assignment was carried out in Sweden,
• reimbursement of expenses for travel to and from Sweden at the beginning and at the end of the work/ assignment,
• payment on which special income tax shall be paid for artistes, etc. resident abroad,
• payment to a person who, at the beginning of the year, has reached the age of 65. In this case, the payer shall pay special payroll tax.

Special payroll tax on certain earned income shall be paid on income from employment (pay, fees, benefits in kind, reimbursements of expenses, etc.) in respect of a person who, at the beginning of the year, has reached the age of 65.

Exceptions: Special payroll tax is not payable on

• remuneration that amounts to less than SKr 1,000,
• reimbursement of expenses for lodging during the period when the work/assignment was carried out in Sweden,
• reimbursement of expenses for travel to and from Sweden at the beginning and at the end of the work/ assignment,
• payment on which special income tax shall be paid for artistes, etc. resident abroad.