Taxes - what to expect
Sweden is renowned for its high taxes. But as an individual living here, you get a lot in return, including a generous social welfare system, affordable preschools and healthcare, and world class public transport.
Sweden has a progressive income tax and income thresholds are adjusted each year. On earnings up to about SEK 440,000 per year, you will pay approximately 30-33% in local income taxes, depending on which municipality you live in. On any earnings over this figure, you will also pay national income taxes, with the money going to the state. The rate is 20% on income between about SEK 440,000 and 640,000, and 25% on income over SEK 640,000.
Paying taxes in Sweden is very straightforward: employers pay payroll tax on top of your salary every month, income tax is deducted directly from your monthly salary, and value-added tax is included in the price of food, goods and services. Every person is taxed individually, even when married.
If everything appears correct on your mandatory, pre-printed annual tax return, reporting your taxes may simply involve sending a text message from your mobile phone to the Swedish Tax Agency (Skatteverket) to confirm this. For more information visit the Swedish Tax Agency website.
Good to know
The tax year in Sweden is the same as the calendar year - from January 1 to December 31. The tax authority sends out income tax return forms every April and these must be submitted in May.
Tax relief for key foreign personnel
Sweden offers a tax relief scheme for highly skilled internationals, such as experts, researchers and people who hold vital positions in Swedish and Swedish based companies. The scheme means that 25% of a persons income is exempt from tax, for five years from the start of their stay in Sweden.
Certain conditions apply. For example, applications must be made within three months of the start of your employment. To find out more about the exemption and conditions, visit the website of the Taxation of Research Workers Board (Forskarskattenämnden).
Taxation of Research Workers Board
Income from capital
Dividends, interest, capital gains and rental income from private residences are subjected to a tax rate of 30%.
Value added tax (VAT)
In Sweden, you will pay a value added tax (VAT) – known as MOMS - on goods and services that you purchase. The standard is 25%, although a reduced rate of 12% is placed on for example food and hotels; and a 6% VAT rate applies to things such as newspapers, magazines, books, transport (taxis, buses, flights etc.) and concert tickets.