Expatriate tax ebook - Sweden

What taxes?

Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes

Capital gains tax
Interest income, dividends and capital gains are taxed at a flat rate of 30%. Generally 70% of capital losses are deductible. A tax reduction is granted on losses exceeding income on capital, resulting in a net loss. The reduction is 30% of the net loss up to SEK 100,000 and 21% on amounts exceeding SEK 100, 000.

Inheritance, estate & gift taxes
There is no gift or inheritance tax in Sweden.

Investment income
See "Capital gains tax"

Local taxes
Not applicable

Real estate tax
As from 1 January 2008, a municipal charge of SEK 6,000 or maximum 75% of the tax assessment value is levied on family houses instead of real estate tax. Family houses abroad are not subject to the municipal charge.

Real estate tax is still levied on other property, e.g. undeveloped land.

Social security taxes
The statutory social security charges amount to 32.42% (for 2008) of the total remuneration paid to employees including all taxable benefits in kind. Employees do not contribute to these charges. Further, an employer bound by a collective agreement, pays, on average, an additional 15% of salaries to cover the cost of contractual pension plans.

Employees are charged a pension insurance fee of 7% of employment income, up to SEK 387,300 (for 2008). The maximum charge is SEK 27,100. The charge is fully credited against other income taxes.

An employer without permanent establishment in Sweden can agree with the employee, that the employee will pay all social security costs, i.e. the employer part as well as the employee part.

Stock options
Stock options classified as employee stock options according to Swedish legislation are taxed as employment income upon exercise. Employee stock options are, however, only taxable in Sweden if the options became exercisable (vested) when the individual was resident in Sweden. The taxable benefit is equal to the difference between the fair market value of the stock on the date of exercise, and the option (exercise) price.

If an individual leaves Sweden and holds employee stock options that vested when the individual was resident in Sweden, the options will be taxed at the day of departure as if the options were exercised. An individual who moves to another EEA country to take up a professional occupation will not be subject to the exit tax. Instead, the individual would be taxed at exercise.

Please note that there is draft legislation proposing that the special rules for cross border personnel (only options vested in Sweden are taxable here and the exit tax) are abolished as from 1 January 2009 and that the main rule, taxation at exercise, will apply instead.

As the tax treatment of equity oriented plans is complex in Sweden, and the classification of each plan is very important, we strongly recommend that this issue be discussed with a Grant Thornton Sweden tax specialist.

Wealth tax
There is no wealth tax in Sweden.

Other specific taxes
An individual who is not a member of the Swedish Church, or some other specific Church, still has to pay a burial fee. The fee depends on the municipality and the average burial fee is 0.22% (for 2008).

Information about Sweden:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities