Tax Residency in Sweden – How to File Taxes in 2025

‍What Is a Tax Audit in Sweden?

If a foreign entrepreneur operates in Sweden for more than six months (183 days), they are considered a tax resident and must comply with Swedish tax regulations. This also means more formalities with Skatteverket. The agency can audit your business at any time to ensure everything is reported correctly.

Audits usually take place at your business premises, where you must present all necessary documentation. Skatteverket will verify whether the information you submitted in your tax return is accurate — and whether you’ve fulfilled your legal obligations. You must notify the agency immediately if any business details change.

Although the audit itself is confidential, its outcome may be published on official government websites. Skatteverket can also request information about your clients or business partners and audit any tax period.

Who Can Be Audited by Skatteverket?

Tax audits may involve both individuals and companies, including:

• Sole proprietors (enskild firma)
• Limited companies (aktiebolag)
• Individuals registered for VAT or as employers
• Anyone who has submitted a tax declaration

What Documents Should You Prepare?

A tax audit may include:

• Payroll summaries for your employees
• Invoices, receipts, and all documents supporting your reported income
• VAT reports and declarations regarding social contributions

If any documents are sensitive or confidential, you have the right to inform the auditor. You may still be required to present them, but you can appeal to an administrative court to seek exemption.

Tax Audit in Sweden – Step by Step

Step 1: Notification of Audit

You will receive a formal notice from Skatteverket, including:

• The name of the person or company being audited
• The purpose of the audit
• Names of the tax auditors involved
• The person who authorized the audit

In some cases, the audit may take place outside your office, for example at Skatteverket’s office. However, you can request that the audit be carried out at your premises.

Step 2: On-site Audit

The auditor will examine your business records and may temporarily take some documents for review — in such cases, you’ll receive a confirmation document. They may also inspect your:

• Cash registers
• Technical equipment
• Business premises

As an entrepreneur, you are expected to:

• Provide all required documentation
• Allow access to all necessary rooms
• Offer access to computers if needed
• Arrange a workspace for the auditor
• Be available for questions or clarifications

Step 3: Audit Results

If Skatteverket finds discrepancies, they may recalculate your tax and send you a formal decision. You have the right to appeal this decision.

If no irregularities are found, you’ll receive a confirmation letter stating that the audit is complete and no changes were made to your tax filings.

Can You Refuse to Cooperate?

Refusing to cooperate is not recommended. If you decline to provide documents or information, Skatteverket may:

• Issue a formal request requiring you to submit the documents
• Petition the administrative court to secure evidence

This could lead to legal consequences and the forced release of your documents.

Need help navigating Swedish tax audits or Skatteverket communication?

Contact us at Revea – we assist entrepreneurs with accounting, tax compliance, and audit support in Sweden.

More and more migrants in Sweden are choosing not only to work for local employers but also to run their own businesses. Before taking the first steps, it’s important to understand what actions you can take to maximize profits and reduce operational costs. Here’s what you should know about managing company finances and taxes in Sweden.

Income Tax in Sweden

All registered businesses in Sweden are required to pay income tax, which consists of:

• A national component
• A local tax (municipal and regional)

Tax Rates:

• Tax rates vary depending on your municipality
• The effective tax rate ranges from 8% to 55%, depending on income level and location
• Taxes are paid monthly, with a final adjustment at the end of the fiscal year

For legal entities (such as limited companies), the tax rate is flat at 20.6%.

When registering a company, the entrepreneur must estimate their expected annual profit, which is used by the Tax Agency (Skatteverket) to calculate preliminary tax payments. Overpaid amounts are refunded after annual reconciliation; underpayments must be settled.

Preliminary tax declarations can be adjusted during the tax year, but not after the final return is filed.

VAT in Sweden – What You Need to Know

Swedish companies are also generally liable for VAT (moms). Registration is mandatory for businesses that:

• Import/export goods with customs clearance in Sweden
• Provide real estate-related services
• Operate transportation through Swedish territory

Other businesses may voluntarily register, depending on their activity.

VAT registration must be completed at least 14 days before business operations begin. It can be done online.

VAT Rates in Sweden:

Managing Business Expenses

All expenses incurred by a business in Sweden must be properly documented. Companies are required to issue and archive invoices and receipts for several years.

Most entrepreneurs use the help of professional accountants, who:

• Ensure accurate bookkeeping and tax compliance
• Assist in optimizing reporting and cash flow
• Offer strategic planning to reduce costs and increase efficiency

Taxes by Business Structure

The level of taxation in Sweden depends on both income and business type.

Additional taxes:

• VAT – according to the nature of goods and services
• Employer contributions – 31.42% for employees
• Employee tax – between 8% and 55% of gross salary

Tax Optimization in Sweden – How to Increase Profit

Sweden has a complex tax system, but it also offers numerous legal ways to optimize taxes and improve profitability. The most common strategies include:

1. Using Tax Deductions

• Deductions must be documented with invoices or receipts
• Claimed in the annual tax return to Skatteverket
• Common deductions include:
  • R&D expenses
  • Business development
  • Startup costs
• Some deductions apply only to specific amounts or expire after a set time

2. Choosing the Right Business Structure

• Your legal structure impacts:
  • Tax rates
  • Legal responsibility
  • Available deductions

Consulting with a tax advisor before registration can help you choose the best option.

3. Managing Investment Income Strategically

• Profits from selling a company can be tax-free if reinvested in business activities
• Sweden has double taxation treaties with many countries, simplifying international business transactions

4. Monitoring Legal and Tax Changes

• Changes in tax laws can increase or reduce your costs
• Staying updated allows businesses to adjust and stay compliant

Should You Work With a Tax Consultant?

Yes – working with a local tax advisor is highly recommended. A good consultant will:

• Analyze your business situation
• Identify areas to save money
• Recommend legal, efficient solutions
• Ensure full compliance with Swedish tax law

It’s especially important to choose an accountant familiar with Swedish regulations, which differ significantly from Polish law.

Need help navigating Swedish tax rules or optimizing your finances?

📩 Contact us – our team supports entrepreneurs with bookkeeping, tax planning, and ongoing business advice tailored to Swedish conditions.

More and more entrepreneurs in Sweden are choosing to run their own businesses. Starting a company in Sweden is not difficult – as long as you understand the key requirements. Lack of knowledge may impact your operations, so it’s worth reviewing this guide or contacting an accounting firm for help.

Steps to Starting a Business in Sweden

There are three main steps to setting up a business in Sweden:

1. Choose a legal form of business
2. Register with the Swedish Companies Registration Office (Bolagsverket)
3. Register with the Swedish Tax Agency (Skatteverket)

1. Choose the Type of Business Entity

In Sweden, you can choose from several legal business structures:

• Sole trader (Enskild firma) – the simplest form of business, requiring no start-up capital or co-owners. The owner has unlimited liability.
• Limited company (Aktiebolag, AB) – the most popular form. It has legal personality, and owners are not personally liable. Requires a minimum capital of 25,000 SEK.
• Trading partnership (Handelsbolag, HB) – a company run by two or more people. Partners have full liability.
• Limited partnership (Kommanditbolag, KB) – doesn’t require start-up capital but requires annual financial reporting.
• Branch (Filial) – a Swedish branch of a foreign company. Must appoint a managing director and maintain Swedish-standard bookkeeping.
• Simple company (Enkel bolag) – a cooperative structure for at least two people without legal personality. Each partner is personally liable.

Other legal entities include economic associations, foundations, and European companies (SE).

2. Registering with Bolagsverket

Most companies must register with the Swedish Companies Registration Office (Bolagsverket). Sole traders are exempt but may choose to register voluntarily.

Required documents:

• Company formation deed (dated within 6 months)
• Articles of association
• Bank certificate confirming share capital deposit (starting from 25,000 SEK for AB)
• Registration form

Registration cost: approx. 700–1,700 SEK

Processing time: usually 3–6 weeks

3. Registering with the Swedish Tax Agency (Skatteverket)

The final step is to register the business with the Swedish Tax Agency (Skatteverket).

You’ll need:

• Copy of passport or ID
• Form SKV 4632
• Registration via verksamt.se (requires BankID for online submission)

Upon registration, you’ll receive:

• F-tax certificate (self-employed taxpayer status)
• VAT registration
• Employer registration – if you intend to hire staff
• FA-tax – if you’re both employed and self-employed

Other Things You Need to Know

Residence permit

Issued by:

• Swedish Migration Agency (Migrationsverket)
• The Swedish embassy or Polish consulate

Valid for 5 years. After 2 years, your business must be able to support you financially.

Population registration

Mandatory if your intended stay exceeds 12 months.

You must register your address in Sweden before registering your company.

Personal identity number (personnummer)

Apply using form SKV 4620 at the Swedish Tax Agency.

Registration with Försäkringskassan (Swedish Social Insurance Agency)

Required if you:

• Want to apply for social benefits
• Need EU health insurance card (EHIC)
• Intend to claim dental or medical reimbursements

Swedish bank account

A business bank account is necessary for:

• Depositing share capital
• Managing payments and tax deductions

Business Taxes in Sweden

Income tax (individuals):

• 0% – income up to 598,500 SEK
• 20% – income exceeding this threshold

Municipal tax:

Set by each municipality and region – ranges from 30% to 35%

Corporate income tax (CIT):

• 20.6% (as of 2022)

VAT (Value Added Tax) in Sweden

Social Contributions (Employer Fees)

As an entrepreneur, you must pay social security contributions totaling 31.42% of the salary base. These include:

• Health insurance
• Retirement (pension) contributions
• Payroll taxes
• Other statutory contributions

Need help?

Our accounting firm supports English-speaking entrepreneurs in Sweden with company registration, tax declarations, payroll, and ongoing financial advice.

How does the Swedish pension system work, and how can you best prepare for the future? In this article, we explain the structure of Swedish pensions, who is entitled to benefits, and how to save for retirement—through the state, your employer, or on your own.

Public Pension – The Foundation of Retirement in Sweden

The Swedish pension system differs from the Polish one. The total amount of your pension consists of a public pension paid by the state and income-related components based on your lifetime earnings in Sweden.

This portion is managed by the Swedish Pensions Agency (Pensionsmyndigheten) and is funded annually through work and taxes. Even during parental leave, the state contributes to your pension for the first four years after childbirth.

Your pension can also be increased by:

• Receiving student aid during university studies
• Completing military service, including basic training
• Receiving disability or activation benefits
• Being on unemployment benefits

The longer and more actively you work in Sweden, the higher your public pension. You can also choose your own pension fund for investment purposes.

How Is the Public Pension Structured?

The public pension is paid for life and consists of:

• Income pension (inkomstpension) – based on lifetime earnings
• Premium pension (premiepension) – based on annual contributions
• Basic or guaranteed pension (garantipension) – for low-income earners
• Pension supplement – based on income and working years

Each year, 2.5% of your income is directed to the premium pension. You can choose whether these funds go to a private pension fund or the default state fund AP7 Såfa.

Additional Support for Low-Income Pensioners

Those with a low public pension may be eligible for:

• Housing supplement – based on income, living situation, and costs
• Elderly support allowance – for those without full pension eligibility

These are only granted under strict conditions and require a separate application.

Survivor’s Pension – Financial Support After the Loss of a Loved One

The public pension system also includes a survivor’s pension for close family members—spouse, partner, or parent (in the case of a child).

• This benefit covers part of the income the deceased provided
• To qualify, the deceased must have lived and worked in Sweden
• The amount depends on how much pension the deceased accrued

Employer-Funded Pension (Tjänstepension)

Many workers in Sweden also receive a pension from their employer—called tjänstepension. This typically applies to:

• Public sector employees
• Private sector white-collar and blue-collar workers

Employers are not legally required to offer occupational pensions, so it’s important to check your contract.

Self-Employed? No Automatic Occupational Pension

If you’re self-employed, you do not receive tjänstepension unless you save independently. This is why many entrepreneurs choose to set aside funds privately.

When and How Is the Occupational Pension Paid?

If your employer contributed to a pension fund, the provider will typically contact you a few months before you turn 65. At that time, you decide:

• When to start drawing your pension
• Whether to receive payments for 5, 10, 15, 20 years, or for life

What Else Does Tjänstepension Include?

Occupational pensions can also include:

• Supplemental health insurance – beyond Försäkringskassan
• Survivor protection – for your family in case of death

How Does a Swedish Pension Interact With Foreign Pensions?

Pensions received in Poland or another country do not affect your Swedish income pension, premium pension, or supplementary pension.

However, they may impact:

• Your basic guaranteed pension
• Housing supplement
• Elderly support allowance
• Pension supplement

This is assessed individually, based on income and benefits from abroad.

Leaving Sweden – Can You Still Collect Your Pension?

Yes. If you’ve worked in Sweden and later move away, you are still entitled to receive:

• Income pension
• Premium pension
• Supplementary pension

However, you may lose housing or elderly supplements, which are only granted to residents of Sweden.

Private Pension Savings in Sweden

Just like in Poland, many people in Sweden also choose to save privately for retirement—especially those who:

• Are self-employed
• Don’t qualify for tjänstepension

Common methods of saving include:

• Bank savings
• Private insurance plans
• Investment savings accounts (ISK)
• Capital-based pension insurance

Paying Off a Mortgage as Retirement Planning

Another form of long-term saving is paying off your mortgage. This can offer both financial and tax benefits:

• After repayment, you own your home outright
• You avoid future rent or housing costs
• You benefit from tax relief during the repayment period

This is ideal for those who prefer tangible, long-term assets over financial products.

Need Help Navigating the Swedish Pension System?

Do you have questions about Pensionsmyndigheten, your pension rights, or how to apply for supplements or retirement benefits?

Contact us – we’ll help you make informed decisions about your retirement in Sweden.

Are you living in Sweden and planning to retire here? This article explains how the Swedish pension system works, how many years you need to work to receive a pension, and what every expat or future pensioner in Sweden should know.

What Is the Retirement Age in Sweden?

Sweden has no official retirement age, which means pensions are not paid out automatically. If you wish to retire, you must apply to the Swedish Pensions Agency (Pensionsmyndigheten).

As of 2023, you can apply from the age of 63 (previously 61). Starting in 2026, the lower pension age will gradually increase in line with life expectancy.

You can continue working beyond retirement age, and the later you retire, the higher your pension benefit. You can choose to receive the full pension or partial payments while continuing to work.

How Many Years Do You Need to Work to Qualify?

To receive the guaranteed pension, you must:

• Be at least 66 years old (previously 65)
• Have lived in Sweden for at least 3 years
• If you’ve lived or worked in the EU, EEA, or Switzerland, your years can be combined—but at least 1 year must be in Sweden

To qualify for the full guaranteed pension, you must have lived in Sweden for at least 40 years, from age 16 until retirement age. If you’ve lived in Sweden for fewer years, the pension will be proportionally lower.

People born in 1937 or earlier may still receive the guaranteed pension as compensation for changes made in the pension system in 2003.

What Is the Structure of the Swedish Pension System?

The Swedish pension system consists of three pillars:

• Public pension (allmän pension) – provided by the state
• Occupational pension (tjänstepension) – provided by the employer
• Private pension savings (privat pension) – personal savings in a private pension fund

Public Pension (Allmän Pension)

The public pension is paid out by Pensionsmyndigheten and includes:

Income Pension (Inkomstpension)

This is based on your income throughout your working life. Each year, 16% of your income is allocated to this pension. Income includes wages, parental allowance, unemployment benefits, sickness benefits, and self-employment income. Women receive pension contributions from the state for 4 years after giving birth.

Premium Pension (Premiepension)

Each year, 2.5% of your income goes into a pension fund of your choice, or into the state fund AP7 Såfa. This is similar to private investment accounts.

Guaranteed Pension (Garantipension)

This is for those aged 66 or older, even if they have little or no income history. You must have lived in Sweden for at least 3 years to qualify. Full benefit is available after 40 years of residence.

• Maximum guaranteed pension:
  • 8,597 SEK for single individuals
  • 7,861 SEK for married individuals

Pension Supplement (Pensionstillägg)

This is part of the guaranteed pension and depends on your income pension and number of working years. It is automatically included when applying for your public pension.

• Available from age 66
• Maximum amount: 600 SEK/month (gross)

Additional Benefits for Pensioners

If your pension is low, you may qualify for:

Housing Supplement

Available for renters, homeowners, co-ops, care homes, etc. Amount depends on income, assets, housing costs, and family situation. Apply from age 66, once you receive your full public or foreign pension.

Elderly Support Allowance

For people who do not receive a full pension or receive no pension at all. Helps cover basic living and housing costs.

Survivor’s Pension

If a close relative dies (spouse, parent, cohabiting partner), the survivor may receive benefits such as:

• Orphan’s pension
• Adjustment pension
• Widow’s pension

No need to apply—Pensionsmyndigheten contacts eligible individuals after receiving the death notification.

Occupational Pension (Tjänstepension)

Most people in Sweden receive an occupational pension in addition to the public pension. If you’ve had multiple employers, you may receive payments from several pension providers.

Not all employers offer occupational pension—you must check your contract.

There are four main collective agreements for tjänstepension in Sweden:

1. Municipal and regional employees
2. State government employees
3. White-collar private sector workers
4. Blue-collar private sector workers

It may also include:

• Health insurance coverage (beyond Försäkringskassan)
• Life insurance benefits for surviving family members

Pension companies typically contact you around age 65. You can also request early withdrawal. You can choose to receive benefits for 5, 10, 15, 20 years or lifelong.

Private Pension Savings

If you are self-employed or not covered by occupational pensions, you can choose to save privately.

Saving 4.5–6% of your income during your working years can match the average tjänstepension benefit.

Popular options include:

• Investment Savings Accounts (ISK)
• Capital insurance (kapitalförsäkring)

Pros and Cons of the Swedish Pension System

Disadvantages

• Full public pension available only from age 66
• Retirement age will increase from 2026 onward
• Full guaranteed pension only available after 40 years of residence
• Foreign pensions may reduce benefits like housing supplement and basic pension

Advantages

• Guaranteed pension for those aged 66+ with low or no income
• Mandatory occupational pension programs
• AP7 Såfa fund has historically high returns
• Partial pension eligibility after just 3 years of residence
• Additional benefits include housing supplements, elderly allowances, survivor’s pensions
• Mothers receive 4 years of pension contributions after childbirth
• The state contributes for:
  • Parental leave
  • University students with financial aid
  • Military trainees
  • Unemployed individuals receiving benefits

Need Help with Your Pension in Sweden?

Have questions about Pensionsmyndigheten, pension rights, or how to apply?

Contact our accounting office — we’ll help you navigate every part of the Swedish pension system.

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.