What is E-Commerce?

E-commerce, or electronic commerce, involves the remote sale of goods and services. A customer completes a transaction via digital devices on an online sales platform. The development of the e-commerce sector has led to nearly unrestricted access to goods and services worldwide, making cross-border sales possible without physical storefronts.

However, selling online does not exempt the seller from tax obligations. Even without a local presence in Sweden, earning revenue from Swedish or EU customers creates a tax liability.

What Determines Tax Obligations in E-Commerce?

If you run a business and sell goods or services online, each transaction must be reported separately. This allows the tax authority to verify how much you’ve earned and which VAT rate applies. In Sweden, VAT is generally 25%, but depending on the product or service, it may be:

• 25% (standard rate)
• 12%
• 6%
• 0% (exempt)

What Should an E-Commerce VAT Invoice Include?

The VAT invoice is essential for both the seller and the buyer, as it:

• provides the basis for VAT reporting
• supports the buyer’s right to deduct input VAT
• allows tax authorities to verify VAT compliance

The invoice must contain the following elements:

• date of issue
• unique invoice number (from one or more series)
• seller’s VAT number
• buyer’s VAT number (if reverse charge applies)
• names and addresses of both parties
• quantity and description of goods/services
• date of supply or payment (if different from invoice date)
• taxable amount for each VAT rate, unit price excluding VAT, and any discounts
• VAT rate and amount of VAT due
• note on margin scheme if applicable (no VAT shown)

Missing any of these can impact the buyer’s right to deduct VAT. In some cases, the invoice can be corrected; in others, a new one must be issued.

Own Warehouse vs Dropshipping – Different Tax Rules in Sweden

E-commerce sellers may hold their own inventory or use a dropshipping model, where a third-party supplier ships directly to the customer. These models have different tax implications.

VAT and Own Inventory in Sweden

Selling via own platform to EU customers

If you operate your own online shop and your annual turnover is below 99,680 SEK, and you sell to private individuals in the EU, you must apply Swedish VAT.

If you exceed this threshold, you must apply the VAT rules of the customer’s country. This means registering for VAT in those countries or using the One Stop Shop (OSS) system. You can also choose to join OSS voluntarily, even below the threshold.

Selling via external EU platform

If you use a third-party e-commerce platform but sell in your own name, the same turnover limits and rules apply. This still qualifies as business-to-consumer sales, but you remain responsible for VAT.

Selling via own platform to non-EU customers

If you sell to customers outside the EU, this is considered an export and is VAT-exempt. However, you may need to register for tax purposes in the buyer’s country. Even if you don’t report the transaction in a Swedish VAT return, you must include it in your accounting records.

Selling via external non-EU platform

Same rules apply as above. If the platform is outside the EU, the sale is treated as an export; if it’s within the EU, intra-EU rules apply.

VAT and Dropshipping in Sweden

In dropshipping, a third party handles inventory and delivery, but you as the seller still bear tax responsibility depending on where the customer and supplier are located.

Customer and supplier in the EU

In most cases, you’re responsible for reporting VAT to the customer. You can use OSS to simplify VAT declarations in customer countries. For example, if both you and your supplier are in one EU country and your customer is in another, you must report cross-border VAT.

Customer and supplier outside the EU

If both the customer and the supplier are outside the EU, the transaction is treated as an export. You don’t charge Swedish VAT, but you may need to register for tax in the customer’s country and report it in your accounting.

Customer in the EU, supplier outside the EU

This setup is common in global e-commerce. The customer pays VAT at the time of purchase. If the order value exceeds €150, it is no longer treated as a low-value import. The seller must inform the platform that the product is shipped from outside the EU. In that case, the platform becomes the deemed supplier and is responsible for VAT.

If the platform is EU-based, the transaction is reported as intra-EU sales in a VAT summary. If it’s non-EU, the sale is classified as an export.

Customer outside the EU, supplier in the EU

Here, the sale is treated as an export. No Swedish VAT applies, but the seller may need to register for VAT in the buyer’s country. This follows the same logic as sales where both the seller and customer are based outside the EU.

Conclusion

Sweden’s VAT rules for e-commerce vary based on:

• your sales model (own inventory or dropshipping)
• platform used (own site or marketplace)
• location of your customer and supplier
• transaction value and nature of goods

As an e-commerce entrepreneur, you must understand how VAT applies to your business model, how to issue compliant invoices, and how to report sales correctly. Choosing the right tax structure and logistics setup is critical to avoid penalties and optimize operations.

Planning to launch or scale your online business in Sweden? Contact Revea – we help e-commerce businesses with VAT registration, tax compliance, and strategic advice tailored to cross-border sales.

Why membership is important to our customers

As a member of the Swedish-Polish Chamber of Commerce, we and our clients have access to a strong network of companies, advisors and experts in both Sweden and Poland. This means that we can:

• Open doors to new contacts — everything from partners to potential customers.
• Navigating local regulations — with support and insight into both Swedish and Polish legislation.
• Strengthening international business — through exchange of knowledge, seminars and joint projects.

For our clients, this means that we can offer more than just traditional accounting and audit services — we can also contribute as a strategic partner when the deal takes off beyond Sweden's borders.

Our language skills make a difference

A key success factor in international business is communication. Our consultants are talking Swedish, English and Polish, which makes collaboration smooth and secure, no matter where your business comes from. For you as a customer, this means less risk of misunderstandings and faster processes.

Sweden and Poland — strong trade ties

Sweden and Poland have long had a close trade exchange. According to Business Sweden, Poland is one of Sweden's largest trading partners in both import and export. Membership in the Swedish-Polish Chamber of Commerce strengthens our opportunities to help companies establish, expand and develop in both markets.

How we can support your business

We at Revea will help you with:

• Accounting and auditing adapted to both Swedish and international requirements
• Tax issues and advising on cross-border transactions
• Payroll Management and HR support when hiring in Sweden or Poland
• Business Consulting focusing on establishment and long-term growth

Are you planning to expand between Sweden and Poland? We guide you through regulations, administration and business opportunities — all the way from start-up to established company.

What Is Tax Harmonization?

Tax harmonization involves the gradual alignment of tax rules across EU member states. It does not mean complete unification of national legislation but rather the elimination of differences that hinder the integration of national markets.

The goal is to ease cross-border business, reduce fiscal barriers, and establish consistent competitive conditions. However, this process also raises concerns about the loss of tax sovereignty among member states.

Challenges Related to Harmonization

Every change in the tax system affects a country’s economic conditions. Harmonization may disrupt existing mechanisms, such as incentive schemes or local tax reliefs.

For years, experts have debated whether the benefits of harmonization outweigh its costs and risks. Tax systems across member states differ significantly in structure and budget impact.

Moreover, harmonization may weaken the position of countries with attractive tax regimes, such as those with low corporate income tax rates (CIT).

Sweden’s Tax System and EU Integration

In Sweden, taxes are relatively high and serve a redistributive function. The Swedish Tax Agency (Skatteverket) enjoys a high level of public trust. Income tax for individuals ranges from 30% to 55%, while corporate tax is 28%. VAT and payroll taxes are added on top.

Foreign companies operating in Sweden are subject to limited tax liability – they only pay taxes on income generated within Sweden. The scope of taxation can also be restricted by international tax treaties.

For Sweden, harmonization may require the country to align its national regulations with EU standards – which could present both opportunities and risks.

Is Harmonization Beneficial for Sweden?

Compared to other EU countries, Sweden ranks in the middle when it comes to corporate tax rates. Countries like Malta or Denmark have higher rates but follow different tax models.

In Western Europe – including Sweden – taxes are primarily seen as a tool for redistribution. In Central and Eastern Europe, the emphasis is often on attracting foreign investment through tax incentives.

These differences suggest that full tax harmonization may not be in the best interest of countries like Sweden, which have highly developed welfare systems and complex tax structures.

The New BEFIT Directive – Toward a Common Tax Base

In September 2023, the European Commission proposed the BEFIT directive (Business in Europe: Framework for Income Taxation), aimed at creating a unified method for calculating the corporate tax base across the EU.

Key objectives of BEFIT include:

• A single method for calculating the tax base across EU countries
• Cross-border profit and loss offsetting within corporate groups
• Simplified tax supervision and compliance
• Elimination of withholding tax on intra-group transactions

BEFIT is a continuation of previous efforts to integrate taxation within the internal market. For Sweden, it means adapting its CIT reporting rules, particularly for large multinational enterprises operating in the EU.

Who Will BEFIT Apply To?

The new regulations will apply to capital groups (domestic and international) that:

• Prepare consolidated financial statements
• Exceed €750 million in annual revenues in at least two of the last four fiscal years

Exemptions apply to groups whose parent company is based outside the EU or whose EU-generated revenues are below €50 million or account for less than 5% of the group’s global revenue.

The sector of activity is not a determining factor for inclusion, though some industries – such as aviation or mining – may be subject to special rules.

How Will CIT Be Calculated Under BEFIT?

The calculation process will consist of several steps:

1. Each group entity calculates its tax base according to BEFIT rules
2. All tax bases are combined into one unified base
3. The common base is allocated to group entities using a fixed formula
4. Each entity is taxed at the local CIT rate applicable in its country

Sweden’s Position on BEFIT

Sweden supports the idea of a common tax base functioning in parallel with the national CIT system. The country also insists on maintaining control over the entry and exit conditions for companies in the system.

This cautious stance reflects Sweden’s intent to protect its domestic tax model and carefully assess the directive’s impact on small and medium-sized enterprises (SMEs).

Conclusion

EU tax harmonization is a long-term process aimed at reducing administrative barriers and facilitating cross-border business. For companies operating in Sweden – especially large corporate groups – the new rules may simplify reporting but also require adaptation to common standards.

Do you need help with corporate tax planning or understanding BEFIT’s impact on your group? Contact Revea – we’ll help you navigate the changes and prepare for the future of taxation in the EU.

VAT in Sweden – Basic Information

In Sweden, VAT is known as Mervärdesskatt. The standard VAT rate is 25%, with reduced rates of 12%, 6%, and 0%.

• 12% applies to restaurant services, non-alcoholic beverages, antiques, etc.
• 6% covers books, tickets to sports and cultural events, etc.
• 0% applies to some medicines and passenger transport services.

When is VAT Registration in Sweden Mandatory?

A foreign company must register for VAT in Sweden if it:

• Sells goods or services within Sweden
• Imports or exports goods
• Stores goods in Sweden for distribution within the EU
• Conducts e-commerce exceeding €10,000 in annual turnover

Once the threshold of €10,000 is surpassed, the company must either register for VAT in Sweden or use the One Stop Shop (OSS) scheme. If the turnover remains below this level, VAT can be reported in the country of establishment.

How to Register for VAT in Sweden

To obtain a Swedish VAT number, an application must be submitted to the Swedish Tax Agency along with:

• A copy of a passport (for sole traders)
• A certificate of business registration

VAT Obligations for Foreign Companies in Sweden

Once registered, a company is required to charge VAT at the appropriate rate and submit VAT returns. VAT returns can be submitted on a:

Monthly Basis

Required for companies with annual turnover above SEK 40 million. Submission deadline: the 26th of the month following the reporting period.

Quarterly Basis

For companies with turnover under SEK 40 million. Deadline: the 12th of the second month after the quarter ends.

Annual Basis

For companies with turnover under SEK 1 million. Deadline: the 26th of the second month after the end of the fiscal year.

VAT in Digital Services and E-Commerce

Since 2021, companies selling goods or services within the EU no longer need to register for VAT in every country where they have customers. VAT can be reported in the country of establishment or via the OSS scheme. Online platforms are responsible for reporting transactions.

VAT Refunds for Non-Registered Foreign Companies

Companies not registered for VAT in Sweden may still apply for a VAT refund. The application must be submitted by the end of June of the year following the tax year. The following documents must be included:

• Invoices (paper or electronic)
• A breakdown of goods and services
• A certificate of taxable status
• Other documents supporting the right to a refund

All amounts must be stated in Swedish kronor (SEK).

When Is VAT Refund Not Granted?

VAT refunds are not available in cases involving:

• Purchase of vehicles (cars, motorcycles)
• Private expenses
• Goods or services unrelated to business activities
• Goods resold to private individuals in Sweden
• Certain representation expenses (partial refund possible)
• Short-term vehicle rentals (up to 50% refund)

Summary

Sweden applies clear rules for foreign businesses regarding VAT. Understanding the applicable rates, registration thresholds, and declaration procedures is essential. If you’re operating across borders, consulting a VAT expert can help you avoid errors and make use of refund opportunities.

Need help with VAT registration or reclaiming VAT in Sweden?

Contact Revea – we provide tax consulting, VAT registration, and full accounting support for international companies.

Daily allowances (per diem) are reimbursements you pay as an employer to cover the increased cost of living for employees during business travel. They typically compensate for food, lodging, and incidental expenses.

Temporary Employment or Assignments at a Different Location for Max One Month

As of January 1, 2022, simplified tax exemption rules apply to temporary work and secondments. If someone takes a temporary position or assignment in a different location for a maximum of one month, they may deduct additional living expenses in the same way as during a business trip.

The workplace must be at least 50 km from the employee’s home, and the assignment must be intended to last no more than one month. If the duration is undefined or intended to be longer, the rules do not apply.

If the conditions are met, you as an employer may pay per diem and travel reimbursements tax-free, as with business travel. You do not need to deduct tax or pay employer contributions on these reimbursements.

What Is a Cost Reimbursement?

A cost reimbursement is a compensation in addition to wages that covers specific work-related expenses incurred by the employee.

Such allowances may be tax-exempt if paid under certain conditions. Per diem and mileage reimbursements up to standard rates are examples of tax-free benefits.

If you pay reimbursements exceeding standard limits, the excess must be treated as taxable income—meaning you must deduct tax and pay social contributions on that portion.

Conditions for Tax-Exempt Reimbursements

To qualify for tax exemption, the following three conditions must be met:

• The employee undertakes a business trip with overnight stay more than 50 km away from their usual place of work and residence
• The amount paid does not exceed the standard daily allowance rates for domestic or international travel
• You as employer have documentation, e.g., a travel expense report, detailing the business trip
• Your right to pay reimbursements tax-free is linked to the employee’s right to make deductions

👉 Swedish Tax Agency: Reimbursements and Silent Offsetting (in Swedish)

👉 Swedish Tax Agency: What Is Business Travel? (in Swedish)

Mileage Reimbursement

If employees use their private car for business travel, you may pay them a tax-free mileage allowance of 18.50 SEK per Swedish mile (10 km).

If the employee drives a company car and pays for all the fuel themselves, the tax-free reimbursement is:

• 6.50 SEK/mile for diesel
• 9.50 SEK/mile for other fuels like gasoline, electricity, or ethanol

If public transport is used, you can reimburse the actual cost.

👉 More info on travel expense reimbursements (in Swedish)

What Are the Standard Tax-Free Allowance Rates?

The standard amounts vary depending on the travel duration and whether the trip is domestic or abroad.

Definitions:

• Full day – Departure before 12:00 and return after 19:00
• Half day – Departure after 12:00 or return before 19:00
• Night schedule – Travel between 00:00 and 06:00

Domestic Travel

International Travel

👉 Full list by country (in Swedish)

Reduced Allowance If Employer Pays for Meals

If you pay for your employee’s meals during a business trip, the allowance must be reduced since the employee did not incur additional food costs. This also affects the tax deduction.

👉 When Should the Allowance Be Reduced and Taxed? (in Swedish)

Summary of Rules for Meal Benefits During Business Travel

👉 More details on reductions (in Swedish)

Allowance Reduction – Domestic Travel

* The 30% deduction applies to people who did not receive an allowance but are claiming deductions for business travel exceeding three months or for double housing.

Allowance Reduction – International Travel

Understanding Sweden’s Employment Protection Act (LAS)

The Swedish Employment Protection Act (LAS – Lagen om anställningsskydd) lays out the core rules that govern employment relationships in Sweden. It covers how employment begins and ends, and what rights and obligations apply during termination or dismissal.

A major revision to LAS came into force in 2022, introducing important changes that now apply to all employers and employees. Below is a summary of the most relevant rules in effect today.

1. Dismissals must be based on “factual reasons”

Employers must base terminations on clear and objective facts. Unlike the older standard of “objective grounds,” today’s legal requirement is a factual reason. This change limits the influence of personal assumptions or speculation about future behavior when justifying a dismissal.

2. New rules for redundancy order

The “last in, first out” rule still applies when layoffs occur. Previously, only companies with 10 or fewer employees could exempt two people from the redundancy order. Now, all employers, regardless of size, may exempt up to three employees – but only once every three months, and across the entire organization.

3. Full-time employment is the new default

Employment in Sweden is presumed to be permanent and full-time unless otherwise agreed in writing. This means that if no specific agreement is in place, an employee is considered hired on a full-time, permanent basis.

4. New obligations for employers using agency staff

If an agency worker has been placed at the same workplace for 24 months over a 3-year period, the host company must offer permanent employment or pay compensation equivalent to two months’ salary.

5. New model for fixed-term employment

The previous “general fixed-term employment” contract has been replaced with a “special fixed-term employment” model. These contracts automatically convert to permanent employment after 12 months within a five-year period, even across multiple contracts. (Previously, this threshold was 24 months.)

6. Higher compensation for wrongful terminations

Courts still decide damages, but standard compensation amounts have increased:

• Unlawful termination: typically approx. 135,000 SEK (up from 80,000 SEK)
• Unlawful dismissal: approx. 190,000 SEK (up from 125,000 SEK)

7. Relocation investigations simplified

If a dismissal is based on personal misconduct, the employer only needs to investigate the possibility of reassignment once. Even if the employee later repeats similar behavior, no second relocation review is required unless a long period of time has passed since the first.

8. Seniority rules apply to reduction of hours

When reducing working hours across multiple employees, the employer must follow redundancy order principles. Employees with shorter length of service must be offered changes first, before those with longer tenure.

9. New rules for dismissal disputes

If a dismissal is contested, the employment still ends at the end of the notice period. During the legal process, the employer is not obligated to pay salary. The employee can instead claim unemployment benefits. If the court later overturns the dismissal, back pay and increased damages will apply.

Summary

Sweden’s current employment law strengthens clarity for both employers and employees. With full-time, permanent employment as the standard, stricter rules on dismissals, and new frameworks for fixed-term work and agency staffing, the LAS law now provides a more predictable and balanced foundation for the Swedish labor market.

Sweden is known for having one of the highest tax burdens in Europe. In return, residents benefit from a strong welfare state, high-quality healthcare and education, and a stable social safety net. Here’s what you need to know about Sweden’s tax system, residency rules, and potential deductions or refunds.

Who Is Subject to Tax in Sweden?

Everyone who works or runs a business in Sweden is subject to taxation – regardless of citizenship. This includes:

• Employees with Swedish income,
• Entrepreneurs operating in Sweden,
• Individuals staying in Sweden for more than 183 days in a 12-month period (become tax residents).
  

Late filing or failure to report taxes to the Swedish Tax Agency (Skatteverket) can result in penalties, interest charges, or administrative fines.

Current Tax Rates in Sweden (2025)

Swedish Tax Residency

You become a tax resident if:

• You stay in Sweden for more than six consecutive months,
• Your economic and personal interests (e.g., job, home, family) are centered in Sweden.
  

Tax residents are taxed on their worldwide income. Temporary trips (e.g., short visits to your home country) do not reset the residency period.

Taxable Income Sources in Sweden

You are taxed on the following types of income:

• Employment income,
• Pensions and social benefits,
• Insurance payments,
• Maritime employment income.
  

Non-taxable items include reimbursement for travel and accommodation.

Self-Employment and Non-Resident Income Tax (SINK)

If you run a business in Sweden but live abroad, you must apply for taxation via form SKV 4350 at the Swedish Tax Agency. For non-residents staying in Sweden less than 183 days per year, a flat SINK tax of 25% applies to gross salary. No annual tax return is required for SINK.

Reporting Swedish Income in Poland

Thanks to the double taxation treaty between Sweden and Poland, Swedish income is not taxed again in Poland. However, it may influence your tax bracket in Poland under the progressive exemption method.

If your business generates income in both countries, Swedish earnings are added to Polish income for rate calculation but not double-taxed.

Tax Refunds and Deductions

If you’ve worked legally in Sweden, you may be eligible for a tax refund – especially if:

• You paid regular taxes and social contributions,
• You can document work-related expenses (e.g., travel, housing, tools).
  

Examples of deductible expenses:

• Travel to/from work (by car, bus, or train),
• Commuting over 20 km (public transport) or 50 km (car),
• Double household costs (living in Sweden but visiting family abroad),
• Per diem allowances (traktamente),
• Pension contributions,
• Job-related purchases (books, tools, software),
• The Job Tax Deduction (jobbskattereduktion),
• General basic deduction (grundavdraget).
  

To qualify, at least 90% of your total annual income must be earned in Sweden.

Summary

Sweden’s tax system may be demanding, but it funds one of the world’s most respected public service models. The Swedish Tax Agency enjoys high public trust, and the system offers clarity and predictability – especially for those who understand the rules.

Regeringen har nu presenterat sin lagrådsremiss med förslag på förändringar i de så kallade 3:12-reglerna – skattereglerna som styr hur utdelningar och kapitalvinster beskattas för ägare i fåmansföretag. Förslaget innebär flera förenklingar, sänkt skatt för många och vissa justeringar som kan påverka planeringen framåt för entreprenörer och delägare i ägarledda bolag.

Vi sammanfattar de viktigaste punkterna – och vad som händer härnäst.

En gemensam beräkningsregel ersätter dagens två

Dagens två alternativ för att beräkna det så kallade gränsbeloppet – huvudregeln och förenklingsregeln – föreslås slås samman till ett enda beräkningssätt. Målet är att förenkla både för företagare och för Skatteverket.

I stället införs ett grundbelopp som motsvarar fyra inkomstbasbelopp (322 400 kr för 2025), vilket fördelas mellan ägarna utifrån deras andel i bolaget. Äger du flera fåmansföretag ska grundbeloppet fördelas proportionellt mellan bolagen.

Alla delägare kan använda löneunderlag

Ett tydligt steg mot förenkling är att kravet på ägarandel (fyraprocentspärren) och löneuttag för att få räkna lönebaserat utdelningsutrymme tas bort. Det innebär att alla delägare, oavsett ägarandel, får räkna på löneunderlag i bolaget och dess dotterbolag.

Men det införs samtidigt ett löneavdrag – åtta inkomstbasbelopp (644 800 kr) per delägare – vilket minskar det lönebaserade utrymmet. För delägare i mindre bolag med låga löner kan det slå hårt, trots det förenklade regelverket.

Uppräkningen av sparat utdelningsutrymme försvinner

En annan förändring är att den årliga räntan på sparade utdelningsutrymmen tas bort. I dag räknas dessa upp med statslåneräntan + 9 procentenheter. Denna uppräkning tas nu bort helt – vilket kan påverka dig som planerat att använda äldre sparat utrymme, t.ex. i samband med ett ägarskifte.

Det går fortfarande att spara utrymmen över tid, men de kommer inte längre växa av sig själva.

Kortare karenstid – enklare vid ägarskiften

Karenstiden för att komma ur 3:12-systemet föreslås kortas från fem till fyra år. Det gäller exempelvis om du säljer bolaget och därefter vill kunna ta ut kapital med lägre beskattning utan att andelarna betraktas som kvalificerade.

Detta kan underlätta generationsskiften och andra typer av ägarförändringar i mindre bolag.

Vad gäller för dig – och när?

Förändringarna föreslås börja gälla från och med den 1 januari 2026. Nästa steg är att regeringen lämnar in en proposition till riksdagen, vilket väntas ske i samband med budgetpropositionen under hösten 2025.

Så påverkas du som företagare

Behöver du se över din utdelningsstrategi?

Regeringens förslag innebär att många delägare behöver tänka nytt kring utdelning, löneuttag och framtida ägarförändringar. De nya reglerna är enklare – men inte nödvändigtvis mer förmånliga för alla.

Vill du veta hur just du påverkas? Kontakta oss på Revea så hjälper vi dig att planera smart – oavsett om du driver ett fåmansbolag själv eller är delägare i flera.

Kontakta oss för rådgivning

Income Tax Liability

A foreign entity can operate in Sweden either as a sole proprietorship (natural person) or as a corporate entity (legal person). Foreign legal entities have limited tax liability in Sweden. This means they are taxed only on income derived from permanent establishments in Sweden. A permanent establishment refers to a fixed place of business through which the company operates wholly or in part.

Foreign individuals usually also have limited tax liability. However, once they settle or stay permanently in Sweden, they become fully tax liable, meaning they are taxed on all income, both from Swedish and foreign sources.

Entrepreneurs who do not reside or stay permanently in Sweden are taxed only on income generated from business activities carried out through a Swedish permanent establishment.

In some cases, tax liability may be removed or reduced under international tax treaties.

Population Registration (Folkbokföring)

The Swedish population register is a central system for recording residents in Sweden. It contains information on who lives in Sweden and where. Correct registration is crucial, as it affects many rights and obligations – including where a person is taxed.

The register also records civil status and other personal details. Normally, a person should be registered at their place of actual residence, defined as the location where they live on a daily basis.

Registration

A foreign company conducting business in Sweden – regardless of whether it is a legal or natural person – may become liable for:

• VAT,
• social security contributions,
• and income tax.
  

In such cases, the company must contact the Swedish Tax Agency (Skatteverket) to register and obtain an F-tax certificate.

Instructions for completing the SKV 4632 form (in Swedish) are available on the Skatteverket website under “How to apply for business registration.”

Sole proprietors with a Swedish personal identity number (personnummer), as well as companies with an authorized representative who holds a personnummer, can apply for registration online at Verksamt.se – a joint platform managed by Skatteverket, Bolagsverket, and Tillväxtverket.

Other foreign companies must submit their application directly to the International Office of the Swedish Tax Agency.

As part of the registration process, Skatteverket assigns a unique Swedish identification number to the foreign entrepreneur:

• For individuals, proof of identity (e.g., passport or ID card) is required.
• For legal entities, a certificate of incorporation is needed, and the representative must show authorization to act on behalf of the company (i.e., power of attorney).
  

Before registering, foreign legal entities should contact Bolagsverket to check whether branch registration is required. If so, Bolagsverket will assign the identification number. Contact details are available on Bolagsverket’s website.

Preliminary Tax Return (PD)

Anyone with income subject to taxation in Sweden is required to pay preliminary tax during the income year. To calculate the amount, the business must submit a preliminary income tax return to the Swedish Tax Agency (Skatteverket).

Based on this return, Skatteverket estimates the amount of tax due and notifies the business of the monthly tax instalments.

In the year following the income year, the business must file a final income tax return, reporting its actual financial results. Skatteverket will then calculate the final tax amount and compare it to the preliminary payments:

• If the company overpaid, it will receive a refund.
• If it underpaid, it must pay the difference.
  

Foreign legal entities equivalent to Swedish limited companies pay income tax at a rate of 26.3% on taxable profits.

Sole proprietors (natural persons) usually pay both income tax and social security contributions (egenavgifter). Their monthly instalments include both components.

EU law and bilateral social security agreements may in some cases override or adjust the application of Swedish national rules.

Foreign partners in Swedish partnerships (handelsbolag or kommanditbolag) are liable to pay tax in Sweden only if the partnership has a permanent establishment in Sweden. In such cases, the partner must also submit a preliminary tax return to determine monthly tax instalments.

A foreign entrepreneur applying for an F-tax certificate must file a preliminary income tax return, regardless of whether they have a permanent establishment in Sweden or not.

It is possible to update the information provided at any time during the year by submitting a new preliminary return. Skatteverket will then recalculate the monthly instalments. Relevant forms include SKV 4313, SKV 4314, and SKV 4315.

Annual Income Tax Return

A foreign business that is subject to Swedish tax on its commercial activities is obligated to file an annual income tax return.

• Foreign legal entities typically must submit their tax return no later than May 2 of the year following the income year.
• Foreign individuals must submit their tax return no later than May 31 of the following year.
  

More information is available in the Swedish Tax Agency’s brochures “Bokföring, bokslut och deklaration”, parts 1 and 2 (SKV 282 and SKV 283).

1) Wages for Work Performed in Sweden

Whether social security contributions must be paid in Sweden depends on:

• EU law,
• bilateral social security agreements, and
• Swedish national law.
  

International agreements take precedence over Swedish law, and within the EEA, EU law generally prevails.

If a company pays wages for work performed in Sweden, it is generally required to pay Swedish social security contributions (arbetsgivaravgifter). If the company also has a permanent establishment in Sweden, it must:

• pay preliminary income tax, and
• register as an employer with Skatteverket.
  

This also applies to wages or remuneration paid to shareholders for work performed on behalf of their own company.

A foreign company with a permanent establishment is treated as a Swedish employer for purposes of social security contributions and income tax withholdings.

2) Social Security Contributions

Anyone who pays wages for work is required to pay social security contributions. The amount is based on the total salary and benefits paid.

A foreign company must pay contributions for work performed in Sweden regardless of whether it has a permanent establishment, except in certain short-term cases.

Under Swedish law, foreign employers without a permanent establishment are not required to pay social security contributions if:

• the employee was posted for less than one year,
• and meets other conditions under EU or bilateral social security rules.
  

If an employee resides in an EU/EEA country and is posted to Sweden for less than 24 months, and is not replacing someone previously posted, they may remain under their home country’s social security system.

In such cases, no Swedish social contributions are required. The employee must hold an A1 certificate (previously E101) proving social security coverage in their home country. In Sweden, A1 certificates are issued by Försäkringskassan. Employers should always request and keep a copy of the certificate.

Even when hiring a self-employed contractor, a foreign business might be liable for social contributions. However, if the contractor provides a valid F-tax certificate, the company is exempt.

A foreign company without a permanent establishment may agree with an employee that the employee will take responsibility for paying the social contributions. This agreement can be oral, but for legal clarity, a written agreement is strongly recommended.

• The agreement should be submitted to Försäkringskassan.
• The employee must also submit a preliminary tax return to Skatteverket to calculate monthly income tax and social contributions (known as SA tax, or SA-skatt).
• This arrangement must also be declared in the employee’s annual income tax return.
  

Regardless of any such agreement, the foreign company must file an annual income report (kontrolluppgift) for the wages paid.

The rate of social contributions depends on the employee’s age and whether the company has a permanent establishment in Sweden. Foreign employers without a permanent establishment do not pay the general payroll fee (allmän löneavgift).

3) Preliminary Income Tax Withholdings

A foreign company with a permanent establishment in Sweden must withhold preliminary income tax on wages paid to employees.

For employees who are tax residents in Sweden, the applicable tax rates are listed in Skatteverket’s tax tables (skattetabeller).

Short-Term Stays: Less than 6 Months

If the employee stays in Sweden for less than six months, they may be subject to the SINK tax (Special Income Tax for Non-Residents). In this case:

• The employer must withhold 25% of the gross salary as tax.
• To apply the SINK rules, either the employee or employer must submit an application to Skatteverket.
  

The SINK tax is final – no annual tax return is required by the employee for income taxed under SINK.

Since January 1, 2005, employees have had the option to voluntarily opt out of SINK and be taxed under the regular Swedish Income Tax Act instead. This allows them to deduct business-related expenses and potentially reduce their tax burden.

To opt for standard taxation:

• Submit form “Särskild inkomstskatt för utomlands bosatta” (SKV 4350).
• In the “Other information” section (Övriga upplysningar och yrkanden), state that you want to apply Swedish income tax rules instead of SINK, and list any deductible expenses.
• Alternatively, file a tax return the following year, requesting that income previously taxed under SINK be re-taxed under standard rules.

Long-Term Stays: More than 6 Months

An employee who stays in Sweden for more than six months may be considered a tax resident, even if officially residing elsewhere. Such individuals are subject to the same tax rules as Swedish residents.

A foreign company with a permanent establishment must:

• Withhold income tax according to the tax tables,
• Register as an employer,
• Provide both Skatteverket and the employee with an annual income statement for the previous tax year.

Payments to Subcontractors

Even if work is subcontracted, withholding tax may still apply if the subcontractor does not hold an F-tax certificate.

This does not apply if the subcontractor is not established in Sweden.

A foreign company without a permanent establishment is not required to withhold tax.

However, if it employs someone who is a Swedish tax resident, the employee must file a preliminary income tax return with Skatteverket to determine their monthly tax instalments (SA tax).

Annual Income Statement for Employees

A foreign company is obligated to submit an annual income report (kontrolluppgift) for each employee, detailing:

• taxable earnings,
• pension rights,
• and, where applicable, withheld taxes.
  

This applies regardless of whether the company has a permanent establishment in Sweden.

The income report must be submitted by January 31 of the year following the income year.

Depending on the employee’s country of residence and applicable social contributions, different reporting forms may be required. If the employee lives abroad, the report may also need to include the employee’s foreign tax identification number (TIN).

Value Added Tax (VAT / Moms)

The term “foreign entrepreneur” in the context of Swedish VAT refers to a business that does not have a place of business or a permanent establishment in Sweden, and, for individuals, does not reside or stay permanently in the country.

VAT Registration

VAT registration in Sweden is generally not voluntary. However, in some cases, a foreign business may apply for voluntary VAT registration, allowing it to take on the VAT liability itself. This typically applies to:

• Sales of goods,
• And in certain cases, services related to real estate located in Sweden.
  

For sales to private individuals, VAT registration is always required.

F-tax Certificate (Godkännande för F-skatt)

All businesses operating in Sweden can apply for an F-tax certificate. This certificate is especially important for clients who pay for services rendered:

• If the person or company being paid holds an F-tax certificate, the client is not required to withhold tax or pay social security contributions on the payment.
• For payments for goods, the certificate has no tax implications.
  

A foreign business that is operating or planning to operate in Sweden in the near future may also apply for an F-tax certificate.

This applies even if the business is not liable for income tax in Sweden.

However, foreign businesses must be able to demonstrate that they are:

• Declaring and paying taxes and contributions in their home country,
• And provide a certificate confirming they have no tax debts in their home country.
  

The same may apply to individuals who manage or control the foreign company – such as:

• Direct and indirect owners,
• Persons with significant influence over the company,
• Especially in companies with four or fewer owners holding more than 50% of the total voting power.
  

When calculating the number of owners, close relatives (parents, children, spouses, siblings, etc.) are treated as a single person.

This includes stepchildren, adopted children, and registered partners. Cohabitants who have shared children or were previously married are treated the same as spouses.

If the business ceases operations in Sweden, this must be reported to Skatteverket in order to cancel the F-tax certificate. More details are available in the brochure “F-tax Certificate for Businesses” (SKV 432).

Deregistration and Changes to Company Information

If a business ceases operations in Sweden, it must deregister from the Swedish Tax Agency’s registers and, where applicable, from Bolagsverket (the Swedish Companies Registration Office).

Deregistration and updates can be submitted using:

• The form SKV 4639 – Application for Deregistration/Change of Information, or
• Electronically via Verksamt.se.
  

Failure to file a deregistration notice – while simultaneously stopping the submission of tax returns – may result in:

• Late fees,
• And Skatteverket issuing estimated tax assessments.
  

In some cases, a new preliminary income tax return may be required together with the deregistration notice.

This allows the monthly tax instalments to be reduced due to the closure of the business.