These rules apply to:

  • non-Swedish businesses that do not have a permanent establishment in Sweden but pay salaries and other types of compensation to employees working in this country
  • non-Swedish businesses that invoice another business for work carried out in Sweden.

In this context, a non-Swedish business means a non-Swedish legal entity or sole trader with limited tax liability in Sweden.

Businesses that pay compensation for work carried out in Sweden must deduct tax from such compensation regardless of whether the recipient is an individual or a business. The payer must deduct tax at 30% from compensation for work in Sweden paid to a non-Swedish legal entity. In the case of employees, the payer must deduct tax at 30%, or in accordance with a specific decision reached by the Swedish Tax Agency. The payer must not deduct tax from compensation if:

  • the recipient has F-tax approval
  • the Swedish Tax Agency has reached the decision that tax must not be deducted
  • the 183-day rule applies.

The 183-day rule does not apply to outsourcing arrangements. Staff outsourced from abroad are liable for tax in Sweden unless the outsourcing arrangement is short term. A short-term outsourcing arrangement lasts for a maximum period of 15 consecutive working days, and a maximum total of 45 days during a calendar year.

Under an outsourcing arrangement, employment income is taxed in Sweden if an economic employer exists in this country. An economic employer is the party for which work is carried out. A formal employer is the party that pays compensation for work.

An economic employer is the client under a labour outsourcing arrangement.

Example: economic employer

The Swedish company Aske hires the Swedish construction firm Blåbygg to carry out renovation work. Blåbygg uses its own employees for the work, but also hires staff from a non-Swedish staffing agency: Clive. Clive, in turn, engages Daga (another non-Swedish staffing agency) as a subcontractor for certain projects.

Aske checks whether Blåbygg is F-tax approved. If Blåbygg is not F-tax approved, Aske must deduct tax from compensation it pays for work.

Blåbygg is the economic employer, and the outsourcing regulations apply. Blåbygg checks whether Clive is F-tax approved, or whether a decision has been reached confirming that tax must not be deducted from compensation. If Clive is not F-tax approved, and a decision has not been reached confirming that tax must not be deducted, Blåbygg must deduct tax from compensation for work.

Clive and Daga are formal employers. They must deduct tax from all types of compensation they pay to their own employees for work in Sweden, and must report salary payments and tax deducted in Sweden.

The staff outsourced from abroad have an economic employer in Sweden, and therefore have tax liability in Sweden, unless the outsourcing arrangement is short term.

Non-Swedish businesses that carry out work in Sweden

If you run a non-Swedish business, and you invoice another business for work in Sweden, the payer must deduct tax from the compensation.

In this context, a non-Swedish business means a non-Swedish legal entity or sole trader with limited tax liability in Sweden.

The payer is only required to deduct tax from compensation if work is carried out in Sweden, or carried out abroad within the scope of its business operations in Sweden.

The payer must deduct tax at 30% on compensation paid to a legal entity if the Swedish Tax Agency has not decided to specify a different rate.

If you’re an individual running a business, and you receive compensation from a non-Swedish payer that does not have a permanent establishment in Sweden, the payer must deduct tax at 30% from this compensation. If you receive compensation from a Swedish payer, or a non-Swedish payer that has a permanent establishment in Sweden, tax must be deducted from this compensation in accordance with general Swedish regulations.

If you have received compensation for work, and the payer has deducted tax from this compensation, the relevant deducted amount will be credited to your tax account when your final tax is calculated the year after the income year in question.

If you do not have tax liability in Sweden, the full amount of deducted tax will be credited to your tax account. If you have tax liability in Sweden (because you have a permanent establishment here, for example), the deducted tax will be used to settle your final tax. Any excess tax will be credited to your tax account.

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