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EY
Street address:
Mail address: Hamngatan 26
Box 7850 Stockholm 103 99 Stockholm Sweden Sweden
Executive contacts
Katrin Norell
Sevim Güven
Andreas Bråthe
Private Client Services contact
Andreas Bråthe
Social security contact
Sevim Güven
Immigration contact
Elin Harrysson
A. Income tax Who is liable
+46 (70) 318-98-07
Email: katrin.norell@se.ey.com
+46 (72) 230-95-20
Email: sevim.guven@se.ey.com
+46 (73) 397-24-33
Email: andreas.brathe@se.ey.com
+46 (73) 397-24-33
Email: andreas.brathe@se.ey.com
+46 (72) 230-95-20
Email: sevim.guven@se.ey.com
+46 (73) 255-77-02
Email: elin.harrysson@se.ey.com
Territoriality. Residents are subject to Swedish taxes on their worldwide income. Nonresident individuals are taxed on salary earned from work performed in Sweden, on certain pensions and on other income sourced in Sweden.
Definition of resident. Individuals who are present in Sweden for six months or more and regularly stay overnight are generally considered resident for tax purposes.
Income subject to tax. The taxation of various types of income is described below.
Employment income. Income from employment includes wage and salary income, directors’ fees, pensions, fringe benefits and most allowances. Special valuation rules apply to housing and car benefits. Education allowances provided by employers to their employees’ children are taxable for income tax and social security purposes unless they are exempt under the foreign key personnel rules (see below).
The granting of cost allowances is a taxable benefit but, under certain circumstances, a standard amount may be deducted for increased cost of living if the employee is temporarily working in Sweden.
Taxation of employer-provided stock options. Taxable income derived from a stock option incentive plan is generally taxed at the time the option is exercised. If double taxation occurs, the individual may be entitled to a foreign tax credit or tax exemption, depending on the applicable tax treaty or whether the individual is a citizen of a country within the European Union (EU). The value of the benefit is the spread credited to the employee on the date of exercise. The taxable benefit is treated as ordinary employment income. The benefit is also subject to social security contributions.
Income tax must be withheld by the employer by the time the benefit is received by the employee. The tax must be deducted from the employee’s normal salary and forwarded to the tax authorities as normal withholding on salary. However, tax withholding is limited to cash payments in the month in which the taxable event occurs.
According to Swedish Supreme Administrative Court decisions in 2015 and 2018, stock option income can be tax-exempt if an individual earns the income outside Sweden while being a tax nonresident of Sweden but exercises the option while being a tax resident of Sweden. These decisions primarily apply to EU citizens.
Capital gains and losses. Capital gains are treated as investment income. Gains on listed shares are taxed at a rate of 30%. The rate is 25% for gains on unlisted shares. In addition, certain specific rules apply to companies if 50% of the voting capital is controlled by four or fewer shareholders. Residents are subject to tax on capital gains on both Swedish and foreign shares. Nonresidents are taxed on capital gains on Swedish shares and foreign shares if they were tax resident in Sweden at any time during the 10 calendar years immediately preceding the year in which the transaction occurred. However, taxation of capital gains derived from the sale of non-Swedish shares is limited to shares purchased during the period in which the individual was tax resident in Sweden. Tax treaties often shorten the 10-year period.
Residents are subject to tax on 22/30 of the capital gains on disposals of private homes located in Sweden or abroad. Consequently, gains derived from the sale of a primary residence are taxed at a rate of 22% (22/30 x 30%). A substantial portion of capital losses, which varies depending on the asset generating the loss, may primarily be deducted against capital gains and investment income and then also may generate a tax credit with respect to tax payable on employment income.
Deductions
Deductible expenses. The principal deductions allowed are interest expense, expenses for travel between home and work and for business, and alimony payments.
Interest expenses may be deducted from investment income. If the expenses exceed investment income, 30% of the expenses up to SEK100,000 may be credited against taxes payable. For expenses exceeding SEK100,000, the percentage of the tax credit is reduced to 21%. From 2025, only 50% of interest expenses not connected to a specific security (such as a home or securities) is
deductible. From 2026, only interest paid on loans connected to a specific security is deductible.
Under certain conditions, travel costs between home and work that exceed SEK11,000 are deductible. The amount deductible if using a private automobile is SEK2.50 for each kilometer traveled. An employee is also entitled to a deduction of SEK2.50 for each kilometer traveled in a private automobile to carry out the employer’s business.
Alimony paid to a former spouse is deductible, subject to certain limitations.
Mandatory individual social security charges in other EU/ European Economic Area (EEA) Member States and Switzerland can be deductible in Sweden.
Personal deductions. A basic deduction is allowed for both local and state tax purposes. For 2025, the amount of the basic local and state deduction ranges from SEK17,300 to SEK45,300. However, this does not imply that all income in excess of SEK17,300 is taxed because no tax is payable if total income does not exceed SEK24,800 (for 2025). Accordingly, up to this level of income, the personal deduction does not apply. Beyond an income level of SEK24,800, the personal deduction supersedes the exemption rule. The personal deduction is subject to proration if individuals are part-year residents.
Business deductions. For expenses to be deductible, they must be included in the financial accounts. In principle, all expenses incurred to obtain, secure and maintain business income are deductible. Exceptions are made for certain items, including penalties, fines, objects of art, expensive entertainment, and wine and liquor.
Social security taxes for self-employed individuals, as described in Section C, are deductible in the same year they accrue at the rates of 28.97% for active business income and 24.26% for passive business income. Lower rates can apply for young employees.
Rates. For 2025, employment income is subject to both national income tax and local income tax, at the rates set forth below.
Employment income over SEK643,100 (before the personal deduction) is subject to national tax at a flat rate of 20% (in addition to the local tax).
Local taxes are levied on employment income at rates ranging from 29% to 36%.
Nonresidents who perform work in Sweden are taxed at a flat rate of 25%, and no deductions are allowed. This tax is imposed as a final withholding tax. A special application form needs to be filed annually with the Swedish tax agency in order to get a decision for the nonresident taxation. Nonresident entertainers and artists are subject to reduced tax at a flat rate of 15%.
Credits. A tax credit applies to income from employment or selfemployment. This tax credit is calculated on the basis of the eligible income. The amount of the tax credit depends on the
Croatia Japan
Slovak
Cyprus Korea (South) Republic
Czech Republic
Latvia Slovenia
Denmark Liechtenstein
Estonia
Spain
Lithuania Switzerland
Finland Luxembourg Türkiye
France Malta United Kingdom
Germany
Morocco United States
Totalization agreement negotiations are currently underway with Brazil and China Mainland.
D. Tax filing and payment procedures
Tax is assessed on taxable income for each fiscal year, which is generally the calendar year. Married persons are taxed separately, not jointly, on all types of income.
Annual tax returns must generally be filed by 2 May of the year following the year in which the income is earned. Extensions to file returns may be obtained.
Tax on salaries, wages and other remuneration, including benefits in kind, is withheld by employers. Individuals who are selfemployed or who have business income as well as other nonemployment income may register as self-employed taxpayers. Preliminary tax is then computed according to a preliminary tax return. The preliminary tax is payable monthly, beginning in February of the fiscal year and ending in January of the following year.
Any difference between the final tax due and the preliminary tax paid is either refunded immediately or must be paid by 90 days after the date of the final tax assessment.
E. Double tax relief and tax treaties
Double tax relief is provided by allowing taxpayers to credit foreign taxes paid or to deduct foreign taxes paid as an expense. If a credit is elected, a five-year carryforward is available. The credit is limited to the lesser of foreign taxes actually paid or the Swedish tax payable on all foreign-source income.
Sweden has entered into double tax treaties with many countries. Most of the treaties follow the Organisation for Economic Co-operation and Development (OECD) model. In general, the treaties provide that a credit may be taken for foreign taxes paid in the other treaty country to the extent of Swedish taxes imposed on the same income. However, under Sweden’s unilateral tax credit system, a credit may also be taken against Swedish tax imposed on other foreign-source income.
Sweden has entered into double tax treaties with the following jurisdictions.
Albania Gambia
Norway (b)
Argentina Georgia Pakistan
Armenia Germany Philippines
Australia
Guernsey (d) Poland
Austria Hungary Romania
Azerbaijan
Bangladesh
Iceland (b) Russian
India Federation
Barbados Indonesia
Saudi Arabia
Belarus Ireland Singapore
Belgium
Isle of Man (d) South Africa
Bermuda (d) Israel Spain
Bolivia Italy Sri Lanka
Botswana Jamaica Switzerland
Brazil Japan Taiwan
British Virgin Jersey (d) Tanzania
Islands (d) Kazakhstan Thailand
Bulgaria Kenya Trinidad and Canada Korea (South) Tobago
Cayman Islands (d) Latvia Tunisia
Chile Lithuania Türkiye
China Luxembourg Ukraine
Mainland (a) Malaysia USSR (c)
Cyprus Malta United Kingdom
Czechoslovakia (c) Mauritius United States
Denmark (b) Mexico Venezuela
Egypt Namibia Vietnam
Estonia Netherlands Yugoslavia (c)
Faroe Islands (b) New Zealand Zambia
Finland (b) Nigeria Zimbabwe
France North Macedonia
(a) The treaty does not apply to Hong Kong.
(b) Sweden has signed the Nordic Mutual Assistance Treaty, together with Denmark, the Faroe Islands, Finland, Iceland and Norway.
(c) Sweden will apply the treaties with Czechoslovakia, the USSR and Yugoslavia to the new republics that have not entered into a separate treaty with Sweden, unless a law is enacted providing otherwise.
(d) The tax treaty is limited to certain tax issues.
F. Entry visas
Permission to enter Sweden is granted to foreign nationals who wish to visit or stay in the country for up 90 days within a 180-day period if they have valid passports and if they prove they have sufficient means to support themselves while in Sweden and to pay for their journeys home. Citizens of certain jurisdictions outside of the EU may be required to apply for visas before traveling to Sweden. Applications for entry visas are made through the Swedish embassy or consulate in the country of residence.
Citizens from certain countries can obtain permission to enter Sweden on arrival. For a list of visa-required nationals, please refer to the Swedish Ministry of Foreign Affairs website.
G. Work permits and self-employment
In December 2008, the Swedish parliament enacted legislation revising the rules regarding work permits. The intention was to facilitate the hiring by Swedish employers of non-EU/EEA citizens with special skills. The legislation transferred the responsibility for determining the availability of the needed skills from the Labour Boards and the Migration Agency to the individual employers.
Citizens of EU/EEA Member States and Switzerland are treated in accordance with EU rules and do not need work permits to work in Sweden. Sweden also has an agreement with the other Nordic countries (Denmark, Finland, Iceland and Norway) that
Albania Colombia Peru
Argentina Georgia Serbia
Australia Japan Singapore
Bosnia and Korea (South) Taiwan
Herzegovina Malaysia
Ukraine
Brazil Mexico United Kingdom
Canada New Zealand United States
Chile North Macedonia
I. Family and personal considerations
Family members. Accompanying spouses or other accompanying children below the age of 21 of expatriates can be included in the primary applicant’s residency application. The primary applicant must show that he or she can support accompanying family members the first time they apply for a residence permit as a coapplicant.
Children of expatriates do not need student visas to attend schools in Sweden.
Marital property regime. The default marital property regime in Sweden is community property. All property owned by the spouses is regarded as community property, regardless of whether it is acquired prior to marriage or after marriage by gift or inheritance. If a gift or inheritance is received on the condition that it is deemed to be private property, however, the gift or inheritance is not regarded as community property.
Couples may elect out of the regime before or during the marriage by signing a marriage settlement, which should be registered with the civil court.
The community property regime applies to couples resident in Sweden at the time of the wedding. If a couple with foreign citizenship becomes resident in Sweden after the wedding, the regime applies after two years of residency in Sweden. The couple may elect out of the regime by signing a settlement.
Driver’s permits. EU citizens and citizens of Iceland, Liechtenstein and Norway may use home country driver’s licenses for unlimited periods of time in Sweden.
Citizens of other countries may use their driver’s licenses for up to 12 months if these are issued in English, French or German, or if they are accompanied by a translation into one of these languages or into Danish, Norwegian or Swedish. A driver’s license without a photograph is valid only if accompanied by an identity document with a photograph. Residents of Sweden for longer than one year must obtain Swedish driver’s licenses. A driver’s license issued in Japan, Switzerland or the United Kingdom may be exchanged for a Swedish driver’s license if the holder is resident in Sweden or if he or she passes a standard medical test. Otherwise, to obtain a Swedish driver’s license, an individual must complete a physical exam and written and driving tests. In addition, drivers must take lessons in driving on slippery roads.
J. Obligation to report postings and new hires
Posted worker reporting. Foreign employers must report postings and specify a contact person to be registered in Sweden. The Swedish Work Environment Authority maintains the register.
Reporting should be made as of the first day, effective from 30 July 2020.
A posted employee is a person who has been sent by his or her employer to another country to work for a limited time period. If a person has been sent to Sweden, he or she is covered by certain provisions in Swedish laws and collective agreements during the period of employment. This covers all posted workers regardless of nationality or citizenship.
New foreign employee reporting. All new third-country (non-EU/ EEA) hires, regardless of whether they are locally employed or assigned to Sweden, must be reported to the Swedish Tax Agency by no later than the 12th day of the month following the individual’s first day of work in Sweden.