Contract in Sweden working remotely from UK Contract in Sweden working remotely from UK
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  1. #1

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    Default Contract in Sweden working remotely from UK

    I have a contract to work for a Swedish client directly through my Uk Ltd.

    I'll be working completely from the UK, with the very occasional business trip to visit the client (e.g. 2-3 times per year for one or two nights each visit)

    I've read several posts here on the forum, but they mostly describe a scenario where the contractor performs the work in Sweden.

    Can someone clarify what needs to be done to be compliant with the Swedish tax authorities? There is mention of needing to register in Sweden to receive an F-tax certificate. Is this a legal requirement? The Swedish tax office guidelines on their website are fairly vague. My client hasn't asked for one at least.

    Since I wont be working in Sweden, am I correct that there will be no income/social tax implications in Sweden?

    Finally, it seems like Sweden will implement the "Financial/Economic employer" rule from 2021. Does this have any impact on my arrangement?

    IR35 implications? Should the Swedish client issue an SDS?

  2. #2

    More time posting than coding


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    Well done for doing some research on the new Economic Employer tax rules in Sweden.

    I received the usual bi-annual update from KPMG regarding this, although it doesn't add much to the previous main statement from mid 2018:

    Economic employer concept in Sweden from 2019? - KPMG Sverige

    If it's not fully implemented at your end client yet then you should be ok. You should be able to contact a specific tax layer via your agency or consultancy about this. I'm not sure what day rate you're charging or the role you perform but if this is a premium rate then I generally enforce the agency stumping up some decent advisory recommendation and then get another out of my own pocket. This ensures no conflict of interest and provides me with reassurance I'm not being taken for a fool.

    I haven't worked in Sweden for a while and so can't input but, for now, you should be fine if your end client hasn't formally migrated all external sources of work to the new system.

  3. #3

    Fingers like lightning


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    Quote Originally Posted by Winger300 View Post
    I have a contract to work for a Swedish client directly through my Uk Ltd.

    I'll be working completely from the UK, with the very occasional business trip to visit the client (e.g. 2-3 times per year for one or two nights each visit)
    No issues with this.

    Can someone clarify what needs to be done to be compliant with the Swedish tax authorities? There is mention of needing to register in Sweden to receive an F-tax certificate. Is this a legal requirement? The Swedish tax office guidelines on their website are fairly vague. My client hasn't asked for one at least.
    F-tax (short for 'business tax' in Swedish) is only applicable to services, and only for work performed within Sweden. The default for anybody, including limited companies, is to have tax retained by the payer. For companies that would be a fixed 30%. An F-tax certificate allows a company to be paid in gross and receive the full invoice amount. They are usually only declined if there is a history of non-payment, late reporting or abuse. Having an F-tax certificate by itself doesn't incur any tax or reporting liability or obligation. Virtually every company and self-employed persons in Sweden have one. It is never shown to the client, only mentioned on the invoice as 'Have F-tax'.

    You don't need one, but it doesn't hurt applying for one, for possible future use. Getting the required certificate from the HMRC first takes a while and it can be hard to find the right HMRC contact details for requesting one, which has to be done in writing. It is the same tax compliance form as you would need if you were to bid for a public sector contract elsewhere in the UK. Not sure it will even be possible to get one after Brexit.

    Since I wont be working in Sweden, am I correct that there will be no income/social tax implications in Sweden?
    Correct.

    Finally, it seems like Sweden will implement the "Financial/Economic employer" rule from 2021. Does this have any impact on my arrangement?
    No. And it's still only a consultation. No bill has been produced yet. It was originally suggested that it would be implemented from 1 January 2019, but it has not progressed yet. And it would only apply to foreign contractors without an F-tax certificate, but that is actually already the case, economic employer rule or not.

    IR35 implications? Should the Swedish client issue an SDS?
    They shouldn't. As the client is not in the UK, you would self-assess your IR35 status just like you do now before the April 2020 changes.
    Last edited by m0n1k3r; 19th January 2020 at 16:36.

  4. #4

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    Quote Originally Posted by m0n1k3r View Post
    They shouldn't. As the client is not in the UK, you would self-assess your IR35 status just like you do now before the April 2020 changes.
    Please point to the relevant clause in the draft legislation that supports your assertion. I would say that 10(2) 61R(7) flatly contradicts your assertion in relation to the application of the PAYE regulations to deemed payments. This already exists in 10(2) and the draft doesn’t amend it.

    (7)Where—

    (a)the client is the person treated as making the deemed direct payment,

    (b)the worker is resident in the United Kingdom,

    (c)the services are provided in the United Kingdom,

    (d)the client is not resident in the United Kingdom, and

    (e)the client does not have a place of business in the United Kingdom,

    the client is treated as resident in the United Kingdom.

  5. #5

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    Quote Originally Posted by jamesbrown View Post
    Please point to the relevant clause in the draft legislation that supports your assertion. I would say that 10(2) 61R(7) flatly contradicts your assertion in relation to the application of the PAYE regulations to deemed payments. This already exists in 10(2) and the draft doesn’t amend it.
    My assertion is simply that the Swedish client wouldn't know anything British legislation and would rather have nothing to do with it as British law has no jurisdiction in Sweden. IR35 (or anything similar) doesn't exist in Sweden and the client wouldn't even understand the question if you were to ask it. If you have an F-tax certificate you're outside of what would be IR35 in Sweden. If you don't, but provide services in Sweden then you're inside. If you provide services from outside Sweden then you're outside.

    Therefore the default position of what happens if the client has not provided an IR35 assessment takes place.
    Last edited by m0n1k3r; 22nd January 2020 at 21:59.

  6. #6

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    Quote Originally Posted by Winger300 View Post
    I have a contract to work for a Swedish client directly through my Uk Ltd.

    I'll be working completely from the UK, with the very occasional business trip to visit the client (e.g. 2-3 times per year for one or two nights each visit)

    I've read several posts here on the forum, but they mostly describe a scenario where the contractor performs the work in Sweden.

    Can someone clarify what needs to be done to be compliant with the Swedish tax authorities? There is mention of needing to register in Sweden to receive an F-tax certificate. Is this a legal requirement? The Swedish tax office guidelines on their website are fairly vague. My client hasn't asked for one at least.

    Since I wont be working in Sweden, am I correct that there will be no income/social tax implications in Sweden?

    Finally, it seems like Sweden will implement the "Financial/Economic employer" rule from 2021. Does this have any impact on my arrangement?

    IR35 implications? Should the Swedish client issue an SDS?
    Hey I wondered if you have any info on this from your contract? I am starting a remote contract for a company in Sweden tomorrow. They mentioned a F-Tax slip in the contract but I don't think I need one as I'll be working in the UK through my limited?

    Cheers
    Jen

  7. #7

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    Quote Originally Posted by JMcE View Post
    Hey I wondered if you have any info on this from your contract? I am starting a remote contract for a company in Sweden tomorrow. They mentioned a F-Tax slip in the contract but I don't think I need one as I'll be working in the UK through my limited?

    Cheers
    Jen
    Probably not but does their accounts dept know. This gets tricky as they end up registering you as a local supplier. If it is in the contract someone is going to expect it, and might hold up your payments. I'm not certain what you do here but you need to clarify this.
    I'm alright Jack

  8. #8

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    Quote Originally Posted by BlasterBates View Post
    Probably not but does their accounts dept know. This gets tricky as they end up registering you as a local supplier. If it is in the contract someone is going to expect it, and might hold up your payments. I'm not certain what you do here but you need to clarify this.
    Thanks for the quick response. Yeah the accounts department knows, I'll double check again.

  9. #9

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    Quote Originally Posted by Winger300 View Post
    I have a contract to work for a Swedish client directly through my Uk Ltd.

    I'll be working completely from the UK, with the very occasional business trip to visit the client (e.g. 2-3 times per year for one or two nights each visit)

    I've read several posts here on the forum, but they mostly describe a scenario where the contractor performs the work in Sweden.

    Can someone clarify what needs to be done to be compliant with the Swedish tax authorities? There is mention of needing to register in Sweden to receive an F-tax certificate. Is this a legal requirement? The Swedish tax office guidelines on their website are fairly vague. My client hasn't asked for one at least.

    Since I wont be working in Sweden, am I correct that there will be no income/social tax implications in Sweden?
    I can confirm that you currently don't need an F-tax certificate or pay any taxes in Sweden if you don't work within the borders of Sweden. The draft Economic Employer bill from 2019 however contained provisions for it to apply also for foreign companies without a fixed establishment in Sweden, however the wording was unclear about whether it only applied to work performed in Sweden or whether it would also apply to services performed abroad. I'm a Swedish-British citizen and am a director of a limited company in Sweden (no such thing as a one-director company in Sweden). Having dealt with the Swedish tax authorities for several decades, I might know a thing or two about it.

    Finally, it seems like Sweden will implement the "Financial/Economic employer" rule from 2021. Does this have any impact on my arrangement?
    No. Pending the wording of the final legislation, it will probably also not apply if your contract is direct with the client even if you were to work in Sweden.

    IR35 implications? Should the Swedish client issue an SDS?
    IR35 is only applicable within the UK. It is the part of the chain within the UK that is closest to the client that should make the determination. If it's only you, then you're then one making that determination. You could always try asking the Swedish client about IR35 and SDS, but they wouldn't know what it is (no such things in Sweden) and most likely just ignore the request.
    Last edited by m0n1k3r; 15th July 2020 at 12:43.

  10. #10

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    Quote Originally Posted by JMcE View Post
    Hey I wondered if you have any info on this from your contract? I am starting a remote contract for a company in Sweden tomorrow. They mentioned a F-Tax slip in the contract but I don't think I need one as I'll be working in the UK through my limited?
    You currently don't need one unless you perform work in Sweden.
    Last edited by m0n1k3r; 15th July 2020 at 12:44.

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