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| CURRENT SECTION :: Overseas Guides | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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Profile written by Matt Walters of Capital Consulting (October 2008). Introduction Although not immediately quoted as a contract destination, the wide variety of sectors using contract services in Sweden makes it an increasingly popular option. I. Registration i. Residence permit On arrival you should go as soon as possible with all relevant documentation to your local Migration Board office and apply for a residence permit. Full details of requirements and offices may be found on their website. They will issue you with a temporary residence permit. ii. Personal Identification Number Armed with your newly-acquired temporary residence permit and all other relevant documentation, you must go to the local tax office and ask for a personal identification number. iii. Permanent Residence Permit You may need to return to the Migration Board office with your Personal Identification Number to obtain a permanent residence permit but often they will post it to your Swedish address. II. Taxation in Sweden The Swedish tax year is the calendar year; taxpayers must file an annual tax return between 1 May and 30 June of the year following the tax year. Basic tax rates are banded between 0% and 25% dependant on income, but a further municipal tax of up to 31.6% also applies. Swedish tax allowances: i. 25% Tax allowance Foreign experts performing an activity in Sweden requiring rare skills can benefit from an expatriate tax regime so long as the assignment does not exceed 3 years, the remuneration is borne by a Swedish entity, and the individual did not reside in Sweden during the 5 years prior to the application. Under this regime, 25% of the employee’s income as well as moving and schooling expenses and two annual trips home are exempted from Swedish tax and social security contributions during the first 3 years of the assignment in Sweden. ii. Basic allowance A basic allowance of between SEK 12’000 and 31’600 is deducted from the taxpayer’s earned income. iii. Expenses i. There are allowances for commuting and work-related travel costs (unlimited). ii. Resident taxpayers are entitled to an employment income deduction varying between SEK 5’000 and 18’000. iv. Alimony Alimony paid to a former spouse is deductible. Maintenance paid for children living outside of the taxpayer’s house is not deductible. v. Housekeeping A deduction of up to SEK 50’000 is available for services in and around the home such as cleaning, ironing, childminding, etc. In these cases 50% of the expense is tax-deductible, up to a maximum deduction of SEK 50’000. vi. Double housing Foreign contractors coming in to Sweden may benefit from double housing tax relief on a second home. III. Social Security Social security must be paid on your salary in Sweden unless your employer can detach you from another EU country by means of an E101 certificate. Care must be taken here, and it is worth taking advice, as detachment by means of an E101 may not be the best solution in all cases due to either a) the duration of your intended stay in the country, b) the level of cover provided, or c) the cost of said contributions. It is also worth noting that, under the EU social charter, social security contributions made within an EU country will count towards your time stamp for the UK. IV. Work permits Citizens of EU countries do not need a work permit to take up employment in Sweden. This also goes for citizens of Switzerland, Liechtenstein, Iceland and Norway. Citizens of all other countries must go through a full registration and work permit process. A work permit can only be obtained if no suitable candidate can be found in Sweden or another Member State of the EU/EEA or Switzerland. Dependant on your personal circumstances, income and where you are contracting, you may be liable for additional tax in other countries where you are tax-resident (your home country, for example). Before taking any contract overseas, you should always seek professional advice from advisors with experience in the field of international and cross-border taxation. Capital Consulting is an international payroll and contract-management company providing tailor-made tax planning services to contractors working overseas. For more detailed information on your personal situation, please contact Capital on +41 32 732 97 00. Previous Page
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