Contracting in Sweden Contracting in Sweden
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  1. #1

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    Default Contracting in Sweden

    Hello

    I have been offered a contract role by a Swedish based company. The contract is initially for just under 6 months but could be extended closer to the time. I have never contracted before in my life - UK or outside.

    I am really confused what would be the best way to take up this contract. . What would be the tax and social security implications for Sweden? Shall I set up a UK limited company? What would be most tax efficient way?

    I spoke to a UK accountant and she seemed to suggest that if I have UK ltd company, for first 6 months I will only be subject to UK tax law and if I go beyond that only then I will need to pay Swedish tax.

    Please note I will be moving full time to Sweden - i.e no commuting back to the UK on weekends etc.

    Any help appreciated.

  2. #2

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    Quote Originally Posted by ContractingBrit View Post
    I spoke to a UK accountant and she seemed to suggest that if I have UK ltd company, for first 6 months I will only be subject to UK tax law and if I go beyond that only then I will need to pay Swedish tax.
    Speak to an international tax professional, not a contractor accountant. With an accountant, you may get lucky or you may not; it's like asking a carpenter for an opinion on welding. It seems you didn't because your accountant is clueless; she probably heard something about the "183 day rule" and misunderstood the scope and implications. Income earned in Sweden will most likely be taxable in Sweden from Day 1. Failure to report income will qualify as evasion, subject to criminal prosecution. Working via a UK company that you own and manage will most likely bring that company within the scope of Swedish taxation.

    Your best bet is probably to work through a Swedish umbrella (e.g. try Sue @ I-Paye). Either way, get professional advice, not from an accountant, not from a message board.

    Also:

    IT Contracting in Sweden: Money & Tax

  3. #3

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    Many thanks for your detailed response.

  4. #4

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    Quote Originally Posted by ContractingBrit View Post
    Many thanks for your detailed response.
    No problem. Like I say, if you're inclined, have a word with Sue @ IPaye as she's a long time member here and knows her stuff (no connection):

    https://www.contractoruk.com/forums/...-at-ipaye.html

  5. #5

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    Default

    Happy to have a chat with you if it would be helpful.

    Few things to think about.

    Firstly, jamesbrown is correct the 183 day rule does not apply when you are on an assignment in Sweden where the end 'user' of your labour is a Sweden company or company with a Swedish permanent establishment. Any intermediary is ignored (so Uk Agency, UK Ltd Co etc) and the income is deemed to be fully taxable locally from day 1.

    In Sweden they have a few different regimes for income tax but they are most based on the period of time you spend there, such as SINK tax rules. The best thing to assume is the worst case scenario (fully resident) and take it from there.

    If you are planning on moving to Sweden for the term of your contract (or beyond) then no commuter expenses will be allowable.

    There is also social security to consider and you would be liable to this from day 1 unless you apply for an A1 Certificate which, although possible, is difficult to get as a self employed contractor or employee of your own PSC.

    If you end up fully tax resident in Sweden, paying Swedish social security, without any tax deductible expenses, you will be lucky to net 45%.

    Lots to think about........

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