What is Sweden financial year?

Sweden offers its citizens some of the finest social programs: universal health insurance, unlimited sick days, subsidized childcare, and free university tuition.

However, these luxuries do not come without a cost, and Sweden’s tax rates are among the highest in the world. In addition to Swedish taxes, Americans living abroad cannot forget their US expatriate income tax return obligation or other reporting requirements, like FBAR.

When contemplating relocating to Sweden, it’s essential to consider the impact it may have on your income tax return as a US expat, in addition to understanding the Swedish tax rates and deadlines. In other words, familiarizing yourself with the Swedish taxes for US expats is crucial before deciding to move.

Primary Tax Form for Residents: Swedish Tax Return (inkomstdeklaration)
Tax Year: January 1st to December 31st.
Tax Deadline: May 2nd (for online filing) or August 2nd (for paper filing)
Currency: Swedish krona (SEK)
Population: Approximately 10.4 million
Number of US Expats: Approximately 18,000
Capital City: Stockholm
Primary Language: Swedish
Tax Treaty: Yes
Totalization Agreement: Yes

Sweden is renowned for its comprehensive social programs. However, to support those social programs, Sweden also has some of the highest tax rates in the world. Swedish tax law is also known for its complexity, often making it difficult for expats to keep track of their obligations.

To help clear things up, here’s an overview of how Sweden’s tax law applies to US expats.

What is the 183 day rule in Sweden?

An individual’s tax liability in Sweden is determined by residence status for taxation purposes and the source of income derived by the individual. Extended business travellers are likely to be considered non-residents of Sweden for tax purposes if their stay in Sweden does not exceed 6 months. Extended business travellers are likely to be taxed on employment income derived from workdays in Sweden, provided the stay in Sweden exceeds 183 days in a 12-month period. However, The Swedish Government has confirmed their intention to introduce an economic employer concept within Swedish tax legislation.

Key considerations for taxation will be based on the entity for which work is carried out and who bears the costs rather than just the entity that pays employee salaries. Due to this Swedish tax liabilities may now arise for many foreign employees working temporarily in Sweden, and foreign employers will have Swedish tax reporting obligations. This change, which the Swedish government have approved and will come in to force on 1 January 2021, will affect international companies who assign employees to their Swedish subsidiaries as well as organizations who provide services to clients in Sweden using internationally mobile labour.

How do taxes work in Sweden?

The value added tax (mervärdesskatt or moms) rate in Sweden is 25%, with exceptions for food and services like hotel room rental fees (12%), and for sales of publications, admission tickets to cultural events and travel within Sweden (6%).[3]

Sweden has a progressive income tax, the rates for 2021 are as follows (based on yearly incomes):

Taxable income is reduced by general deductions which means that the marginal tax in practice varies between 7% on incomes just above 20,008 kronor to 60.1% on incomes above 675,700 kronor.[4] For an average salary, on an additional pay of 100 kronor, the employee first pays 32 kronor in income tax (direct, 32%).

What is the income statement in Sweden?

Resident legal entities are liable for tax on their worldwide income unless tax treaties or special exemptions apply. Non-resident entities are taxed on income that is deemed to have its source within Sweden.

Taxable income is subject to corporate tax at a flat rate of 20.6% applying from 1 January 2021. Until 31 December 2020, the corporate tax rate was 21.4%.

What is year 4 in Sweden?

Förskola (nursery school, or preschool) is provided by Swedish municipalities for children ages one to five. The amount of municipal subsidy for preschool depends on the child’s age and whether the parents work, study, are unemployed or on parental leave for other children.

Swedish preschool emphasises the importance of play in a child’s development, with a curriculum aiming to ensure children’s individual needs and interests. Gender-aware education is increasingly common, striving to provide children with the same opportunities in life regardless of gender.

Swedish compulsory schooling consists of four stages: förskoleklass (‘preschool year’ or year 0), lågstadiet (years 1–3), mellanstadiet (years 4–6) and högstadiet (years 7–9). Children between ages six and thirteen are also offered out-of-school care before and after school hours.

Compulsory education also includes sameskolor (Sami schools) for children of the indigenous Sami people.

Gymnasium (upper secondary school, sixth form or high school, years 10–12) is optional. There are eighteen regular national programmes of three years to choose from, six of which are preparatory for higher education such as university, and twelve of which are vocational.

While entrance requirements vary between programmes, all of them demand students to have passing grades in Swedish, English and mathematics from their final year of compulsory schooling.

In 2022, about 85 per cent of Swedish ninth-year students qualified for a vocational programme and 81–84 per cent for a national programme. Those whose grades don’t qualify have five so-called introductory programmes to choose from. From these introductory programmes, students can then move on to a national programme.

What is Sweden's monetary policy 2023?

The Government’s assessment is that the Swedish economy will be in recession throughout 2023 and that the recession will deepen in 2024, with expected GDP growth of -1.0 per cent in 2023 and 1.2 per cent in 2024.

Compounding the already weak economic situation, inflation in Sweden is at its highest in more than 30 years. The consumer price index (CPI) inflation rate is expected to reach 8.8 per cent this year. Currently, inflation is being driven primarily by higher prices of food and services, whereas the impact of energy prices on inflation is decreasing. The underlying inflation – i.e. inflation excluding interest costs and energy prices – is expected to reach 6.6 per cent this year.

As a consequence of the high inflation, real wages are declining and the value of savings are decreasing. High indebtedness and a high proportion of mortgages with variable interest rates also make Swedish households and businesses particularly sensitive to the rapidly rising interest rates that accompany inflation. At the same time, unemployment in Sweden is high in comparison with other European countries.

The Government intends to tackle the difficult economic situation by implementing a three-part plan:

Tackle inflation and support vulnerable households
Re-institute the work-first principle
Structural reforms to boost growth

In addition to efforts to manage the difficult economic situation, the Government intends to continue working in several areas to solve societal problems that Sweden has had for some time. This work includes:

What is the 6 month rule in Sweden?

If you are planning to visit Sweden for longer than 90 days you need to apply for a visitors' residence permit, or – if there are special reasons – a visa for a longer period (a D-visa, national visa).

When applying, if you know that you will need to stay in Sweden for a period longer than 90 days, you should not apply for a Schengen visa but for a visitor’s residence permit. In special cases, it might be possible to apply for a national visa, known as a ‘D-visa’. Such permits are decided in accordance with national Swedish rules. This means, for instance, that visa facilitation agreements do not apply and visa decisions are not subject to appeal.

What happens if you stay longer than 90 days in Sweden?

If you already have an on-going application for a residence permit at the Swedish Migration Agency, you cannot be granted two permits at the same time. You will only receive a decision in the application considered to be most advantageous for you, which most often is an application for a residence and work permit as it gives you the right to settle in Sweden. If the application for a visitor’s permit is made while you are in Sweden, you are at risk of having your application for a residence and work permit rejected. If you are outside Sweden, you must wait until a decision is made in the application that is most advantageous for you. This may mean that the dates that you apply for a visitor’s permit may have passed when the decision is made. The Swedish Migration Agency therefore recommends that you do not apply for a visitor’s permit in these cases.

be able to support yourself during the time you will be in Sweden
have a valid passport (the passport must be valid for at least three months after the end date of the visit)
have a return ticket or money to buy a ticket.

Why is Sweden tax so high?

A majority of Swedes have confidence in the Swedish Tax Agency, despite Sweden’s famously high income taxes. The Tax Agency plays an important part in every Swede’s life. Here’s why.

A highly trusted public body

Is Sweden a high tax country?

Countries around the world usually implement one of four types of tax systems when it comes to taxable income: zero taxation, residential taxation, citizenship-based taxation, or territorial taxation.

The general rule of thumb with the residential system is 183 days; in other words, if you spend more than the allotted 183 days in Country XYZ, your worldwide income will be taxed.

In other cases, just being a resident in a certain country is enough to become subject to the country’s tax on your worldwide income.

The majority of people are not aware of the existence of low-tax countries and just accept the taxation system imposed on them by their own country, even if they make money online and have their main customers in some other part of the world.

Other folks are well aware of the “hidden gems” or tax havens out there but argue that high tax rates are a necessity if you want a certain quality of life.

If you read my articles or follow my YouTube channel, you know that I have traveled the world extensively; you’ll also know how much I appreciate using top-notch services wherever I travel.

Yes, with all that cheese, vine, and “je ne sais quoi” street vibe, France is truly a formidable country.

Being Europe’s third most populous country, France is still a global power, a member of the G7, and the EU’s second-largest economy by purchasing power parity.

However, the country has some of the highest tax rates in the world, a whopping 45% top marginal rate.

Spain has one of the most attractive Golden Visa programs in Europe. From golden beaches to a Spanish tapas counter everywhere you turn and all over high standards of living, Spain is a happening place.

How much income tax do Swedes pay?

In Sweden, most people pay only local tax on their annual income. This tax varies depending on municipality and ranges from 28.98 per cent to 35.15 per cent. Sweden's average local tax rate is 32.34 per cent.

Earners above a certain income threshold set by the Tax Agency (link in Swedish) also pay 20 per cent state tax.

The Swedish tax system includes a so-called basic deduction, a sum that is exempt from the taxable income. The sum differs depending on whether a person is under or over 65, see link above.

What is the income declaration for Sweden 2023?

Anyone who earned above 20,431 kronor during 2022 needs to declare their income tax. You will most likely receive a tax declaration by post or in your digital mailbox if you need to declare, but check the Tax Agency’s website if you’re not sure. Below you'll find some of the key dates to be aware of.

March 5th was the final date to create a so-called digital mailbox (digital brevlåda), which means you receive your declaration digitally rather than as a paper form sent through the post.

What is year 5 in Sweden?

Sweden places great importance on its education system. As a whole, the country promotes equality regardless of gender or social status. Sweden also encourages innovation and creativity across all fields, and has its sights set on being a leading country in research.

Sweden gives its students the right to choose where they want to attend school. This means, if a child does not like their school they are able to switch schools—public or private—at no extra cost.
As a technologically advanced society, Sweden often uses computers and IT software for interactive learning. Over 70% of primary students have access to their own computer.
A recent study in Sweden suggests that there is some inequality among learning abilities in Sweden, specifically in the areas of math, science, and reading.

Sweden is a country built around staunch equality and community spirit. This directly influences their school system, where children are taught the same subjects until they are old enough to make their own education / career choices. From a very early age, the way in which a child learns is nurtured and they are encouraged to socialize and collaborate with their fellow classmates. Furthermore, great emphasis is put upon treating the genders equally, which lends towards Swedish society’s reputation for equality among gender and class.

Sweden largely uses the A to F grading scale, but assigns numbers to these letters to calculate an overall final grade at the end of the semester.

Public schools in Sweden are supported by their municipality (i.e., the state or province) and thus paid for by Swedish taxes. The government body that oversees education across the country is the Swedish National Agency for Education. This body of government is responsible for ensuring all students in Sweden have access to high-quality education regardless of where they live in Sweden. Public schools follow the Swedish National Syllabus, which teaches all general subjects.

One of the main differences between public and private schools is that private schools are not obliged to teach the Swedish National Syllabus. However, the majority of private schools choose to follow this curriculum so that education expectations and standards remain the same throughout the country.

Children are required to go to school when they turn six years old. It is possible for kids to start preschool as early as one year old. Their compulsory education lasts until 15 years of age.

What grade is year 10 in Sweden?

Sweden gives its students the right to choose where they want to attend school. This means, if a child does not like their school they are able to switch schools—public or private—at no extra cost.
As a technologically advanced society, Sweden often uses computers and IT software for interactive learning. Over 70% of primary students have access to their own computer.
A recent study in Sweden suggests that there is some inequality among learning abilities in Sweden, specifically in the areas of math, science, and reading.

Sweden largely uses the A to F grading scale, but assigns numbers to these letters to calculate an overall final grade at the end of the semester.

Children are required to go to school when they turn six years old. It is possible for kids to start preschool as early as one year old. Their compulsory education lasts until 15 years of age.

Will interest rates go down in 2023 in Sweden?

Industrial production and merchandise exports had already reverted to their pre-pandemic trend in early 2022. Since then, the upturn has gradually lost momentum. For example, the purchasing managers’ index (PMI) and the National Institute of Economic Research’s Economic Tendency Survey suggest that manufacturers started losing ground late last year. International demand and energy price developments will determine the depth of their downturn. High energy prices have weakened the competitiveness of the euro area, especially German manufacturers. Sweden is a net electricity exporter and uses very little natural gas, which is a potential competitive advantage (see chart below). But so far, its electricity price subsidies have been significantly smaller. If disbursements of these subsidies continue to be delayed, Swedish businesses risk being as severely affected as their counterparts elsewhere in Europe. Partly due to increased defence spending and investments in new energy production, the downturn in exports and industrial investments will be moderate compared to other recessions. We believe exports will fall by 2.0 per cent during 2023 and then grow by 4.0 per cent in 2024.

Sharply falling residential investments. Falling home prices and soaring construction costs are now putting heavy pressure on housing construction. We expect housing starts to halve from 67,000 units in 2021 to 30-35,000 this year. Residential investments will fall by a total of 30 per cent in 2023 and 2024, reducing GDP growth by about 0.7 percentage points per year. There is widespread uncertainty, and anecdotal information indicates downside risks and dramatic freezes of new projects, but some form of stimulus measures for housing construction will probably be launched if this downturn threatens to be larger than we have forecast. Lower demand for commercial premises will also contribute to falling construction investments. We expect overall capital spending in Sweden to fall by 3.1 per cent this year and by another 0.3 per cent in 2024.

Squeezed households will cut consumption Along with residential investments, household consumption will be the main driver of this year’s GDP decline. Real wages are projected to fall by a total of 11 per cent in 2022 and 2023. This is larger than the downturn in the early 1980s, when they fell by about 10 per cent over a four-year period. But the decline in real disposable incomes will be only about 4 per cent, due to tax cuts and increased subsidies. The fall in disposable incomes will be on a par with developments in the early 1980s but far milder than during the crisis of the early 1990s, when disposable incomes dropped by 10 per cent. At that time, a collapse in employment was an important driver, while the labour market looks significantly more resilient this time around.

What is the fiscal year in Sweden?

In Sweden, the fiscal year for individuals is the calendar year, 1 January to 31 December. The fiscal year for an organisation is typically one of the following: However, all calendar months are allowed. If an organisation wishes to change into a non-calendar year, permission from the Tax Authority is required.

When are Swedish tax returns due?

The financial year of most Swedish companies follow the calendar year; consequently, most tax returns are subject to the 1 July due date. The annual assessments are made by the Swedish Tax Agency during the calendar year following the income year and should be completed about a year after the expiry of the financial year.

When are Swedish tax assessments made?

The annual assessments are made by the Swedish Tax Agency during the calendar year following the income year and should be completed about a year after the expiry of the financial year. Income taxes are collected during the year in which the income is earned, under a preliminary tax system.

Which country has a fiscal year?

In Ukraine, the fiscal year is the calendar year, 1 January to 31 December. In the United Arab Emirates, the fiscal year is the calendar year, 1 January to 31 December. In the United Kingdom, the financial year runs from 1 April to 31 March for the purposes of government financial statements.

What is the fiscal year in Sweden?

In Sweden, the fiscal year for individuals is the calendar year, 1 January to 31 December. The fiscal year for an organisation is typically one of the following: However, all calendar months are allowed. If an organisation wishes to change into a non-calendar year, permission from the Tax Authority is required.

When are Swedish tax returns due?

The financial year of most Swedish companies follow the calendar year; consequently, most tax returns are subject to the 1 July due date. The annual assessments are made by the Swedish Tax Agency during the calendar year following the income year and should be completed about a year after the expiry of the financial year.

Which country has a fiscal year?

In Ukraine, the fiscal year is the calendar year, 1 January to 31 December. In the United Arab Emirates, the fiscal year is the calendar year, 1 January to 31 December. In the United Kingdom, the financial year runs from 1 April to 31 March for the purposes of government financial statements.

When is the fiscal year in Germany?

In Germany, the fiscal year runs from 1st January until 31st December. In Greece, the fiscal year is the calendar year, 1 January to 31 December. In Hong Kong, the government's financial year runs from 1 April to 31 March.