Do you receive compensation from a non-Swedish employer?
Non-Swedish employers with a permanent establishment in Sweden must deduct preliminary tax from compensation paid for work carried out in Sweden – just as Swedish employers have to do.
From 1 January 2021, new regulations apply to non-Swedish employers without a permanent establishment in Sweden. The latest regulations affect you if you receive compensation for work in Sweden from a non-Swedish employer without a permanent establishment here.
Living in Sweden and working here for a non-Swedish employer without a permanent establishment
From 1 January 2021, new regulations apply to you if you live in Sweden and work here for a non-Swedish employer without a permanent establishment in Sweden. If you are working in Sweden but live abroad, please see the relevant information below.
- Living abroad and working in Sweden
- Information for non-Swedish employers with employees working in Sweden
Your non-Swedish employer must deduct preliminary tax from your compensation
From 1 January 2021, non-Swedish employers without a permanent establishment in Sweden must deduct preliminary tax from compensation for work carried out in Sweden. The regulations apply to all work in Sweden. This means they apply to you if you normally work abroad, but are currently working from home in Sweden due to the COVID-19 pandemic.
What happens if I am not liable for Swedish income tax for work carried out here?
If you are working in Sweden but are not liable for Swedish tax on the compensation you receive for this work, you can apply to the Swedish Tax Agency for a decision that preliminary tax should not be deducted. This might be the case, for example, if you normally work in Denmark and the Öresund tax agreement applies to you. When you have received a decision notice from the Swedish Tax Agency, you must give it to your employer. You can request a decision by submitting an application for a preliminary tax adjustment, either through our e-service or by filling in a paper form. In the “Other information” section, please write the name of your employer and state the reason you wish to be exempt from preliminary tax (i.e. because you are not liable for income tax in Sweden).
- The Öresund tax agreement (Legal guidance, in Swedish)
External link. - Adjustment application (in Swedish)
- Form SKV 4302: “Adjustment application (changes to preliminary A-tax)” (in Swedish)
Your employer can also apply for a decision that preliminary tax should not be deducted.
Your non-Swedish employer must deduct preliminary tax from your compensation unless the Swedish Tax Agency has decided otherwise.
What if I have paid my own preliminary tax previously?
If you paid your own preliminary tax during the income year 2020, you probably received a decision notice from the Swedish Tax Agency in January 2021 regarding preliminary tax for the income year 2021. Since you no longer have to pay your own preliminary tax, you need to file a preliminary income tax return so that we can cancel this charge. You can file a preliminary income tax return through our e-service or by filling in a paper form. Under “Other information”, you should state that you wish to stop paying preliminary tax because your non-Swedish employer must now deduct preliminary tax for you.
- File a preliminary income tax return (in Swedish)
- Form SKV 4314: Preliminary income tax return (in Swedish)
How much preliminary tax will be deducted from my compensation?
A non-Swedish employer without a permanent establishment in Sweden must deduct preliminary tax from your compensation at the rate of 30% unless the Swedish Tax Agency has decided otherwise. You may apply for a tax adjustment to ensure that the preliminary tax paid is as close as possible to your final tax. You will then receive a decision notice stating which tax rate your employer should apply. Please give this decision notice to your employer so that preliminary tax can be deducted at the correct rate. You can apply for a preliminary tax adjustment through our e-service, or by filling in a paper form.
- Adjustment application (in Swedish)
- Form SKV 4302: Adjustment application (changing preliminary A-tax) (in Swedish) External link.
What if I have a social security agreement?
If you have a social security agreement with your employer (which means you have agreed to declare and pay employer contributions in Sweden instead of your employer paying them), this agreement is unaffected by the latest regulations. You must continue to declare and pay employer contributions using the special registration number allocated to you. However, your employer must deduct preliminary tax from your compensation and declare these deductions to the Swedish Tax Agency in monthly PAYE tax returns. Your non-Swedish employer must also submit a statement of earnings and deductions (“kontrolluppgift”) to the Swedish Tax Agency, with details of compensation paid to you (including reimbursement for employer contributions).
You and your employer can also choose to terminate the social security agreement. If you do so, your employer will be responsible for declaring and paying your preliminary tax and employer contributions. Click on the link below to find out more about what you need to do when a social security agreement is terminated.
Living abroad and working in Sweden for a non-Swedish employer without a permanent establishment in Sweden
This information applies only to people living abroad and working in Sweden for a non-Swedish employer without a permanent establishment in Sweden. Outsourced (hired-out) workers are no longer tax exempt under the 183-day rule. If you are living in Sweden on a permanent basis and working for a non-Swedish employer, the regulations outlined in the link below apply to you.
What is the 183-day rule?
In certain circumstances, a person living abroad who comes to Sweden to work for a limited period (up to 183 days) may be exempt from paying tax in Sweden. This rule is part of the legislation on special income tax for non-residents (“SINK”).
A person living abroad is exempt from paying income tax in Sweden if all of the following conditions are met:
- The person spends no more than 183 days in Sweden during a 12-month period.
- Compensation is paid by a non-Swedish employer.
- Compensation is not borne by a permanent establishment that the employer has in Sweden.
From 1 January 2021, the 183-day rule no longer applies to employees who are outsourced (hired out). However, it still applies to employees who are not outsourced.
What is outsourcing?
Outsourcing is when an employer – that is, a payer of compensation for work – hires out an employee or by other means makes him or her available to work for the business of another employer or client. Several factors must be considered when determining whether or not a particular arrangement qualifies as outsourcing, such as who has responsibility for the workplace, who provides any materials used, and who assigns the staff to carry out the work.
According to the 183-day rule, outsourcing occurs when a non-Swedish employer makes its employees available to one of the following:
- a Swedish client that is liable for tax in Sweden in accordance with the Swedish Income Tax Act
- a non-Swedish client that is liable for Swedish tax in connection with business operations conducted from a permanent establishment in Sweden
The regulations regarding outsourcing also apply to the Swedish state, municipalities and regions.
Exceptions to the outsourcing regulations
The revised regulations include exceptions for short-term assignments in Sweden. Work carried out in Sweden for a maximum of 15 consecutive days is not considered as outsourcing – as long as the total for the calendar year does not exceed 45 business days in Sweden. Only business days are counted as days worked in Sweden; weekends and public holidays are not included.
New regulations for non-Swedish employers regarding deducted preliminary tax
From 1 January 2021, new regulations regarding deducted preliminary tax apply to non-Swedish employers without a permanent establishment in Sweden.
Answers to frequently asked questions – Special income tax for non-residents (SINK)
What is the SINK 183-day rule?
Salary and benefits from employment or an assignment are exempt from taxation if the following conditions are met:
- the employment or assignment is not for the Swedish state, or a Swedish municipality or region
- the employee stays in Sweden for no more than 183 days during a 12-month period
- salary and other benefits are paid by, or on behalf of, an employer that is not based in Sweden
- salary and other benefits are not charged to a permanent establishment that the employer has in Sweden
From 1 January 2021, the 183-day rule is no longer applicable to workers outsourced to carry out temporary assignments in Sweden.
What is outsourcing of workers according to SINK?
Outsourcing is when you are hired out by your formal employer to carry out work under the direction and management of another employer or client (known as an economic employer).
How do I apply for SINK?
You can apply either via our e-service, or by filling in form SKV4350 on paper and posting it to us. The e-service will help you fill in the application so that all the necessary information is included.
Does the SINK application process include questions from the Swedish Tax Agency to assess the outsourcing arrangement?
In our e-service, we ask questions to assess outsourcing arrangements. In the paper form, under “Employment income”, we ask whether you have a non-Swedish employer but carry out your work in Sweden for a Swedish client, and ask you to provide the name of the client. However, the paper form does not include follow-up questions to determine whether or not there is an outsourcing arrangement. We may therefore ask you to provide further information, which could delay the process. For faster processing, we recommend that you apply via our e-service.
Will I need to include an A1 certificate with my SINK application in order for a decision to be made?
No.
Am I required to include a copy of my passport or another approved form of ID with my SINK application?
In the e-service, yes. In the form, it is only needed if you do not have a Swedish personal identity number or coordination number.
How long will the SINK application process take?
Unfortunately, it’s difficult to say. It depends on how many applications we receive.
Do I need a decision on tax exemption by the Swedish Tax Agency if my income is exempt from taxation under the SINK 183-day rule?
No, this will not be necessary. However, you can still apply for a decision to be made if you are unsure whether or not the 183-day rule applies.
Are there any exceptions to the SINK definition of outsourcing?
Yes. Short-term assignments are not regarded as outsourcing.
What is a short-term assignment?
A short-term assignment lasts for a maximum of 15 consecutive days, and the worker may not carry out more than a total of 45 days of work in Sweden in a calendar year.
How are days in Sweden counted in working out the 15-day and 45-day limits?
Only working days are counted. If someone works for just part of a day, it still counts as a full working day. Days off – for example, at weekends or due to sickness – do not count as working days.
What happens if a 15-day working period spans two consecutive years?
This can happen, for example, if you start an assignment in December one year, that ends in January the following year. In this case, you must look at how many days you worked in Sweden during each year to determine whether all or part of the working period can be considered a short-term assignment. If you have already exceeded the 45-day limit for the first year, then the part of the 15-day period that takes place in that year will not count as a short-term assignment. However, the part of the period that falls in the consecutive year may be considered a short-term assignment.
I run a sole trader business abroad. Will the new outsourcing rules in the SINK legislation affect me if I come to Sweden to work?
No. The SINK 183-day rule applies only to salary and other benefits – not to income from business operations.
Does the amendment of the SINK 183-day rule affect the application of tax conventions?
Yes, it does.
Does the exception for short-term assignments apply when a tax convention is in force?
No, it does not.
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