Contracting Sweden

[fraggs]

If anyone can clarify the tax rules in Sweden for overseas contractors it would be much appreciated.

When I took my contract in Sweden I remained as a UK tax resident. The tax office indicated that up to six months there is no tax liability in Sweden so long as the company has no permanent residence in Sweden. Frankly, most offshore solutions scared me off and what I'm doing now is efficient, simple and completely legal.
Of course I am now approaching six months in Sweden and I need some sound advice on my options. It would seem as if even if I spend a month or two working in other countries, my swedish tax residency is based only on when I first arrived. Since I came here in December, even if I now went and spent a couple of months working the UK I would still be considered as working in Sweden for more than 6 months if I come back in June.

Has anyone had any direct experience with this? The rules seem clear but I need some good advice from someone who actually knows how it worked for others.

[Bradley]

Re:Sweden

From PWC website:

The Swedish Tax Agency has adopted new guidelines regarding temporary stays in Sweden. Domestic Swedish tax law does not cover in detail when an individual should be regarded as tax resident in Sweden. The Tax Agency has now adopted guidelines for the situation where an individual who stays in Sweden for a short time (i.e. less than six months) leaves for a while and then returns to Sweden for another period.

The guidelines are aimed at situations where an individual stays in Sweden continuously for several months. Situations where an individual comes to Sweden and stays overnight a couple of times a week, should not be affected. A continuing stay in Sweden exceeding six months is still considered to lead to tax residency.

The new guidelines will affect situations where, for example, an individual stays in Sweden for five months, thereafter leaves Sweden and then returns for another five months. The break between the two stays is, under the new practice, supposed to be longer than five months in order to avoid tax residency in Sweden retroactively from the beginning of the first period in Sweden.

Smorgesborg!

[fraggs]

Re: Re:Sweden

Thanks for the response. My next predictable question ... if I decide to stay more than 6 months, is the tax calculated over the entire stay or only for after 6 months? Basically, I have paid no Swedish tax so far. If I stay after 6 months will I suddenly have an accumulated debt in addition to paying tax on all further income?

[Bradley]

Re:Swedish Tax Residence

I decide to stay more than 6 months, is the tax calculated over the entire stay or only for after 6 months?

Over the entire stay.

Basically you will be personally tax resident in Sweden. This means that your worldwide income could be taxable in Sweden. You Swedish source income will definitely be taxable in Sweden.

Of course, you may also be tax resident elsewhere e.g. the UK and if that's the case you'll get a deduction for any tax paid here and vice versa.