If you are a business owner in Sweden, you are obliged to submit an annual tax return to the Swedish tax authority, Skatteverket. As a Swedish entrepreneur, you can do your annual return electronically via the website www.skatteverket.se. You will also need a Personnummer (or Samordningsnummer), which is issued to taxpayers by the Swedish tax authorities, to account for income tax and VAT by Swedish companies.
Tax settlement in Sweden
What you should know about the annual settlement by Swedish companies:
- All Swedish entrepreneurs and employees of Swedish companies are required to submit an annual tax return to the Skatteverket, except for taxpayers covered by the 25 per cent SINK (statliginkomstskattförutomlandsbosatta) tax, this applies to people who are not Swedish residents (temporary employees who have stayed in Sweden for up to 183 days) and do not have to submit an annual tax return;
- For your annual tax return in Sweden, you will need INKOMSTDEKLARATION 1, which is a document sent between 19 March and 15 April by the Skatteverket, documented tax allowances and a photocopy of your identity document;
- As a Swedish employer, you should issue your employees with tax cards KU-10, KU-13 or KU-14 in January, which are needed for their annual tax return in Sweden;
- Swedish business owners are required to submit their tax return for the previous tax year between March and 2 May;
- The Skatteverket has six months to issue a tax decision;
- If you are a Pole who runs your own business in Sweden, your income from running a Swedish company will not be taxed in Poland, but in Sweden. You are also entitled to deduct a 30 per cent per money allowance, which in Sweden is 459 Swedish kronor for 1 day;
- Skatteverket transfers the tax refund to Swedish entrepreneurs to the bank account number provided in advance;
- Swedish business owners have 90 days to make the surcharge to the Swedish tax authorities, from the moment they receive the payment notice, and they have one year to appeal the tax decision (sent by Skatteverket between August and December);
- As a Swedish entrepreneur, you can include tax credits in your annual company return if you have earned 90% of your income in Sweden;
- If you run your own business in Sweden you are obliged, in addition to the annual settlement with the Skatteverket, to register with Försäkringskassans on the basis of a completed Uppgifterförregistrering form, a document with a Personnummer or Samordningsnummeror and a document confirming the registration of the company in Sweden;
- For the Swedish company’s annual tax return, it is a good idea to set up a digital mailbox, to which the Swedish entrepreneur logs in with BankID;
- As a Swedish entrepreneur, you can include a number of allowances in your annual tax return, including an allowance for transport from your place of residence to your place of work, an allowance for rent and utility expenses in rented premises for an office, shop or Swedish company headquarters, an allowance for a dual household, an allowance for the purchase of instruments or tools needed to run a Swedish company, expenses for business phone calls, an allowance for the purchase of protective clothing and personal protective equipment, an allowance for other work-related expenses, up to SEK 5 000;
- Taxpayers who work in Sweden for no more than 6 months pay a 25 per cent SINK tax, and taxpayers and Swedish entrepreneurs who work in Sweden for more than 6 months pay a 31 per cent municipality tax;
- Swedish entrepreneurs pay 25 per cent VAT, on services and goods, and pay pension contributions, which range from 6 per cent to 7 per cent for Swedish companies operating under collective agreements;
- If you run your own business in Sweden and hire employees, you pay 33 per cent social contributions for them, which include health care and pension contributions, while employees of a Swedish company pay 7 per cent contributions;
- The Convention between the Government of the Republic of Poland and the Government of the Kingdom of Sweden of 15 October 2005 (Poland ratified the MLI Convention on 1 July 2018, one of 2 methods of taxation: the proportional deduction method and the exemption method with progression – interest rate) protects Swedish and Polish companies from double taxation and from tax avoidance by Swedish and Polish entrepreneurs;
- As the owner of a Swedish company, you may include a deduction for business travel expenses – Traktamente – in your annual tax return;
- In your annual Swedish company return, you must include municipality tax, which ranges from 29% to 34%, as well 20% (annual income above SEK 468,700) or 25% state tax (annual income above SEK 675,700);
- All Swedish business owners are obliged to submit a tax return every year for the previous tax year to the Swedish Tax Agency; failure to tax settlement with Skatteverket carries a fine of SEK 1150 and above;
- In Sweden, the tax-free amount deducted from the income tax base is, for low earnings, between SEK 18,900 and SEK 34,300, and SEK 13,100 for earnings higher than SEK 350,660;
- Taxation of legal entities in Sweden is in accordance with international accounting standards and rules set by the European Union;
- Legal entities in Sweden are required to pay 28 per cent income tax (in the case of rotation of corporate reserves and deposits, this tax can be reduced to 26 per cent);
- Swedish entrepreneurs are required to pay 30 per cent tax on dividends (this tax can be reduced through a double taxation agreement);
- As a Swedish entrepreneur, you must include the 25 per cent VAT (mervärdeskatt, abbreviated moms) on services and goods in your annual tax return. A reduced rate of 12 per cent applies to services such as hotels and food, and a 6 per cent rate applies to books, daily newspapers, passenger transport tickets, theatre, cinema, zoo, circus or concert tickets, among others;
- VAT exemption in Sweden;
Services exempt from VAT in Sweden are:
- A Swedish company whose customers are all VAT payers does not have to register as a VAT payer;
- Foreign business owners are required to pay VAT in Sweden if they sell services or goods to people who are not registered for VAT;
- Foreign business owners who intend to do business in Sweden without a permanent establishment are required to send a tax declaration in Swedish to the Skatteverket for foreign entrepreneurs on form SKV 4632. The Skatteverket has two to six weeks to send the F-skattesedel and a certificate of registration as an F-taxpayer;
- Foreign business owners are required to submit a VAT return once a month in Sweden;
- Summary reports;
Foreign entrepreneurs have to file a summary report in Sweden every three months if:
they transport goods from Sweden to other EU countries;
their turnover is exempt from VAT in Sweden because the purchaser is a VAT payer in another EU country;
the buyer uses his own VAT identification number.]
- If you run your own business in Sweden you should register with Skatteverket as an excise taxpayer, after registration you will receive a form with a tax refund date (the waiting time for an excise tax refund in Sweden is usually 1 month). Swedish entrepreneurs who are registered as excise taxpayers are required to submit a return to the Swedish tax authorities also when the excise tax equals 0;
Excise duty, covers goods such as:
energy, sulphur and carbon dioxide;
rewards from savings;
profits from life insurance;
- Swedish business owners pay a 31 per cent social security contribution;
- The tax for Swedish business owners is calculated on net income, after deducting the costs associated with running one’s own business;
- If Swedish taxpayers have an income of more than SEK 290,000 per year, they must also pay state tax (20%-25%);
- Swedish entrepreneurs are required to pay 22 per cent personal income tax – CIT;
- Owners of Swedish companies are allowed to deduct depreciation of machinery, buildings, equipment, reserves, patents and trademarks, losses, royalties and rental expenses from the tax base in their annual tax return;
- Foreign entrepreneurs with a permanent establishment in Sweden must, according to the Income Tax Act, declare special tax on pension costs (SLP – särskildinkomstskattpåpensionskostnader);
- The Bookkeeping Act (bokföringslagen) applies to all entrepreneurs who, even if they live outside Sweden but run a business in Sweden, must keep books of account according to the Trading Branches Act;
- Owners of foreign companies that do not have their registered office in Sweden do not have to pay allmänlöneavgift, which is the general wage contribution, the employees themselves pay the SA tax each month;
- According to Swedish tax legislation, a Swedish tax resident is a person who is permanently resident in Sweden and has resided in Sweden for more than six months, without interruption;
- The owner of a company in Sweden is obliged in the 1st year of its operation to report to the Skatteverket the expected profit of the company and pay advance income tax, or Preliminärskatt. In subsequent years, the Swedish entrepreneur pays income tax to the Swedish tax authorities on the company’s specific profit. The Skatteverket calculates the amount of tax to be paid and collects 1/12 of this each month. The entrepreneur should pay the calculated tax to the Swedish Tax Agency on the 12th of the month (if the 12th falls on a weekend, the payment must be made on Monday);
- On the Swedish Tax Agency’s website skatteverket.se, every entrepreneur can use a calculator with which he or she can calculate the income tax contribution as well as taxes and social security contributions for the company’s employees.
Type of annual accounting in Sweden
In Sweden, the type of company’s annual tax settlement with Skatteverket depends on the entrepreneur’s choice of business type. The taxation of a Swedish sole proprietorship (Enskildnäringsidkare) differs from the taxation of a Swedish civil law company (Enkeltbolag), a commercial company (Handelsbolag – HB), a limited partnership (Kommanditbolag – KB), a limited liability company (Aktiebolag – AB), a private limited joint-stock company (privataktiebolag), a Swedish public limited joint-stock company (publiktaktiebolag), a Swedish branch (Filial), a business association (ekonomiskförening), a foundation (stiftelse) or a European public joint-stock company (Europabolag). It is worth considering which form of Swedish business, and thus which form of taxation and annual accounting with the Swedish tax authorities, will suit your expectations and possibilities.
In subsequent years, the Swedish entrepreneur pays income tax to the Swedish tax authorities on the company’s specific profit. The Skatteverket calculates the amount of tax to be paid and collects 1/12 of this each month. The entrepreneur should pay the calculated tax to the Swedish Tax Agency on the 12th of each month (if the 12th falls on a weekend, the payment must be made on Monday).
Preliminärinkomst-deklaration is a preliminary tax declaration that a Swedish entrepreneur should submit via E-tjänst, an e-service (www.skatteverket.se) to reduce or increase the advance tax payment if the companies’ profit for the year is worse or better than anticipated in the 1st year of Swedish business.
The amount of social security contributions for employees who are employed in a company – Arbetsgivaravgifter – should be paid for the employee by his/her employer (31.42% for those born 1954 and later and 16.36% for those born between 1938 and 1953), while the social security contributions paid by the owner of the company, Egenavgifter, should be paid by the employer for himself, these are the so-called self-employed contributions (28.97% for those born in 1954 and later and 16.36% for those born in 1938-1953).
In Sweden, we distinguish between the annual tax returns of companies such as:
- Enskildnäringsidkare – Skatteverke treats the income from a sole proprietorship (Enskildnäringsidkare) as the income of the business owner, so the business tax is declared on one tax return and the business owner, who pays taxes and contributions, is entitled to pension and health benefits like those who are employed in Sweden. Entrepreneurs who run a sole proprietorship in Sweden are required to file a tax return, for the previous tax year, by 2nd May, on a form that the Swedish tax authorities send out – INKOMSTDEKLARATION1;
- Partnerships under civil law (Enkeltbolag) – Skatteverke considers the income from the operation of this Swedish company to be the income of the owner and partners of the company, so the business tax is declared by the owners in an annex to the annual tax return and submitted annually by 2nd May;
- General partnerships – the provisions governing the tax regime and the operation of general partnerships are contained in the General Partnerships and Civil Partnerships Act (Lag om handelsbolag och enklabolag, SFS 1980:1102);
- Commercial companies (Handelsbolag – HB) are required to submit formal accounts for the previous year each year. The company’s annual income is included on the tax return of the companies that make up the trading company, or on the personal annual tax returns of the owners and partners. In the case of a Swedish trading company, tax to the Skatteverke is not paid by the legal entity on the company’s profit, but on the value of each shareholder’s share of the company’s profit;
- Limited liability companies (Aktiebolag – AB), private joint-stock companies (privataktiebolag), public joint-stock companies (publiktaktiebolag), are subject to the provisions of the Joint-Stock Companies Act (Aktiebolagslagen, SFS 2005:551) and the implementing regulations (Aktiebolagsförordningen, SFS 2005:559) and other accounting, bookkeeping and financial regulations. The financial year of these companies need not coincide with the calendar year. The articles of association of the companies (Stiftelseurkund) contain, inter alia, the start and end dates of the financial year;
- Limited partnerships (Kommanditbolag – KB), company branches (Filial), business associations (ekonomiskförening), foundations (stiftelse) or European Joint-Stock Companies (Europabolag). The owners of these Swedish companies are required to submit their financial statements and tax declarations for previous tax year by 2nd May on the form INKOMSTDEKLARATION 1, which is sent at the end of March/beginning of April by the Swedish tax authorities.
Documents needed for the Swedish company’s annual return
If you are the owner of a Swedish company you are obliged to submit an annual tax return to the Skatteverket, i.e. the Swedish Tax Agency, and if you have employees you must also ensure that they receive all the necessary documents needed for their annual tax return.
Here are the documents related to the annual Swedish company tax return:
- Owners of Swedish companies are required to apply through the skatteverket.se website for a decision on income tax for people living abroad, which is on formSKV4350, attaching a photocopy of an identity document to the application;
- If, as a Swedish entrepreneur, you pay insurance outside Sweden, you are required to present an A1 form and evidence of the contributions you have paid;
- For the Swedish company’s annual tax return, you need INKOMSTDEKLARATION 1, which is a document sent between 19th March and 15th April by Skatteverket, documentation of tax allowances and a photocopy of your identity document;
- As a Swedish employer, you should issue your employees with tax cards KU-10, KU-13 or KU-14 in January, which are needed for the annual tax return of the employees of your Swedish company, for the previous tax year;
- If you run a company in Sweden and you are at the same time a Polish tax resident, you are obliged to settle with the Polish tax authorities, taking into account the Swedish income on the annual PIT-36 return by adding appendix ZG;
- Polish tax residents who run their own business in Sweden and only have income from this activity are entitled to abolition relief, in order to use this relief it is necessary to submit PIT/O declaration to the Polish tax office;
- In order to make an annual tax return for a sole proprietorship in Sweden, you will need a statistical number and a VAT number, which, as a Polish citizen running such a business in Sweden, you will receive after submitting to the Skatteverket form SKV 4632, a tax application for entrepreneurs (from the skatteverket.se website), a copy of your passport, a certificate from the Social Insurance Institution (ZUS) stating that you are not in arrears with your social security payments, and a certificate from the Polish tax authorities stating that you are not in arrears with your tax payments (the documents must be translated by a sworn translator into Swedish).
Deadlines for annual accounting in Sweden
For most companies in Sweden, the tax year is assumed to coincide with the calendar year – the period from January to December.
For your company’s annual tax return in Sweden, you will need INKOMSTDEKLARATION 1, which is a document sent between 19th March and 15th April by Skatteverket, documentation of tax allowances and a photocopy of your identity document.
As a Swedish employer, you should issue your employees with tax cards KU-10, KU-13 or KU-14 in January, which are needed for the annual tax return of your Swedish company’s employees, for the previous tax year.
The Skatteverket sends the tax decision to Swedish entrepreneurs between 15th August and 15th September. From receipt of the tax decision, you have 90 days to pay any surcharge.
If you do not receive your tax return (INKOMSTDEKLARATION 1) from the Skatteverket by 15th April, you must download a new form from www.skatteverket.se and inform the Swedish tax authorities about it.
Tax relief for Swedish companies
If you are the owner of a Swedish company, you are entitled to a number of tax reliefs that you can take advantage of during your annual tax return with the Swedish tax authority, Skatteverket.
Below is a list of Swedish tax reliefs and the documents needed to obtain the specific relief:
- Accommodation tax relief, which can be used by temporary employees of Swedish companies upon presentation of a housing rental agreement and receipts for accommodation or bank statements confirming utility and rent payments;
- Tax deduction for commuting to work from your permanent place of residence (you are entitled to deduct 1 journey per week by the means of transport that is cheapest, unless you are travelling by plane or train, in which case the lowest ticket price is not taken into account);
- Tax deduction for the cost of commuting to work from your accommodation (within Sweden, 18.5 SEK per 10 km) if you are not able to travel by public transport;
- Tax relief for the purchase of apparatus and tools necessary for work, in addition to mobile phones and computers;
- Tax relief for renting premises, e.g. for a business;
- Tax relief for training costs necessary to maintain a particular job;
- Tax relief for costs related to your work in Sweden, up to SEK 5,000 (you must provide receipts, invoices or bills to benefit from the relief);
- Tax relief for costs related to the purchase of protective clothing needed for your work, not applicable to work clothing;
- Tax relief for meals, which is available to all temporary employees of Swedish companies;
- Tax relief for interest expenses on consumer loans and mortgages, is for employees of Swedish companies with a particular loan;
- Tax relief for dual residence (Dubbelbosättning), which can be used by all Swedish entrepreneurs and employees of Swedish companies who can certify that they also have a household in their place of check-in. This relief can only be used for one year, in the case of a single person who can prove that their family wants to move to Sweden, and for three years in the case of informal and formal unions;
- Tax relief for business travel expenses (traktamente), which consists of a per diem deduction of SEK 230 for the first 90 days and SEK 69 for subsequent days;
- Jobbskattereduktion, or income tax credit;
- Grundavdrag, or tax relief for time worked in Sweden. You are entitled to the full tax deduction if you have worked in Sweden for a full year or if you have earned at least 90% of your income in Sweden;
- Tax relief on social insurance contributions paid in Poland.
- What is Bolagsverket?
It is the Swedish Companies Registration Office, where primarily Swedish companies that want to protect their name should register.
- Who should submit an annual tax return to the Swedish tax authorities?
All Swedish entrepreneurs and employees of Swedish companies, except taxpayers subject to the 25 per cent SINK tax (statliginkomstskattförutomlandsbosatta), who are Swedish residents (temporary employees who have stayed in Sweden for up to 183 days) and are exempt from filing an annual tax return.
- What is the arbetslöshetskassor (a-kasssor)?
It is the Swedish unemployment fund.
- What is SINK?
SINK, or statliginkomstskattförutomlandsbosatta, is a 25 per cent tax levied on non-Swedish tax residents (persons who have worked in Sweden for less than 183 days). Such taxpayers have limited tax liability and do not have to submit an annual tax return to the Swedish tax authorities.
- Where should Swedish entrepreneurs submit their annual tax return?
To the Swedish tax authority – Skatteverket, preferably via www.skatteverket.se.
- How much is the municipality tax in Sweden, and who pays it?
The municipal tax in Sweden is between 29% and 34% and is paid by all Swedish tax residents.
- How much is the state tax rate in Sweden?
In Sweden, the state tax is 20% for annual incomes greater than SEK 490,700 and 25% for incomes greater than SEK 689,300.
- What is the tax year in Sweden?
In Sweden, the tax year is the same as the calendar year, i.e. it lasts 12 months, from January to December. For some Swedish companies, the tax year need not be the same as the calendar year.
- Who can include tax credits in their annual return in Sweden?
In Sweden, all Swedish residents, i.e. taxpayers who have lived in Sweden for more than 183 days and 90% of their income comes from work in Sweden.
- What documents are needed for annual tax return in Sweden?
- Document INKOMSTDEKLARATION 1, which is the annual return sent by Skatteverket.
- Document E101/A1, which confirms where the insurance premiums are paid.
- A document from your employer listing your income for the previous year – KU-10 or KU-13.
- A KU-14 document, for those who have received a Swedish pension.
- A photocopy of your wage slips.
- A photocopy of your employment contract.
- A photocopy of your identity card.
- Documents confirming the costs you wish to deduct in your annual return.
- How long is the waiting time for a tax decision in Sweden?
The waiting time for a tax decision in Sweden is up to 6 months.
- How do I get my tax refund from the Skatteverket?
The Skatteverket will transfer your tax refund to a pre-designated bank account in SWIFT or IBAN format.