Are you a large foreign company, for example in the construction sector, considering establishing operations in Sweden? Navigating Swedish legislation and its extensive tax system can be overwhelming. Below is an overview of key steps and rules to know before starting your operations. Note that requirements may vary depending on the scope and type of business.

At Revea, we are an accounting and auditing firm in Stockholm that helps both Swedish and foreign entities daily with accounting, auditing, tax issues, payroll management, and financial advisory. Feel free to get in touch if you need support or advice on any of the topics below.

Income Tax Liability

A first step for foreign companies is to determine the type of tax liability:

• Legal Entities (foreign companies): Have limited tax liability in Sweden, meaning tax is only levied on income from operations or a permanent establishment in Sweden.
• Individuals (sole proprietors): Generally have limited tax liability as long as they are not residents or permanently present in Sweden. If you move here and register, you become unlimitedly tax liable, meaning all income – both Swedish and foreign – is taxed in Sweden.

If your company is only temporarily or partially present, you might sometimes avoid certain taxes thanks to international tax treaties. It is wise to always check the applicable double taxation agreements between Sweden and your home country.

Limited vs. Unlimited Tax Liability – Summary Table

<table>
 <thead>
 <tr>
 <th>Type of tax liability</th>
 <th>Scope of taxation</th>
 <th>Who does it apply to?</th>
</tr>
</thead>
 <tbody>
 <tr>
 <td>Limited tax liability</td>
 <td>Tax on income from Swedish activities</td>
 <td>Foreign legal persons and natural persons not resident in Sweden or residing here for short periods</td>
</tr>
 <tr>
 <td>Unlimited tax liability</td>
 <td>Tax on all income (both Swedish and foreign)</td>
 <td>Natural persons residing in Sweden or permanently residing here</td>
</tr>
</tbody>
</table>

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Registration with the Tax Agency

A foreign company operating in Sweden may need to register for:

• F-tax (F-tax certificate)
• VAT
• Employer Contributions
• Preliminary Income Tax

This applies whether you are a legal entity (e.g., a limited company) or an individual (sole proprietor). To apply, you typically submit form SKV 4632 (Business Registration) or register online via verksamt.se – a joint platform run by the Tax Agency, the Companies Registration Office, and the Agency for Economic and Regional Growth. If you are a foreign company without a Swedish contact person with a Swedish personal number, you may need to submit your application directly to the Tax Agency’s foreign affairs department.

Identification Number and Branch Registration

• Swedish Organizational Number: The Tax Agency assigns a unique organizational number upon registration.
• Branch: If you establish a branch in Sweden, first contact the Companies Registration Office to determine if branch registration is required. You will then receive an organizational number directly from them.

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Preliminary Tax Declaration (PD) and Monthly Prepayments

Companies with tax liability in Sweden usually pay prepayment tax during the income year. You submit a preliminary tax declaration to the Tax Agency, which estimates your expected tax and sets monthly payments.

• Annual Income Declaration: After the income year, you submit an annual income declaration (e.g., by May 2 for legal entities) when your final tax is calculated.
• Adjustments During the Year: If circumstances change, you can submit a new preliminary tax declaration to adjust your monthly payments.

Tip: Monitor your business results continuously to avoid large outstanding taxes or overpayments.

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Annual Income Declaration

A foreign company with tax liability in Sweden must submit its annual income declaration.

• Legal Entities (similar to Swedish limited companies): Typically by May 2 of the year following the income year.
• Individuals (residing abroad): By May 31 of the year following the income year (this may vary if an individual becomes unlimitedly tax liable and registers).

In these declarations, you report your accounting results, deductions, and the preliminary tax paid.

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Social Contributions and Withholding Tax

1. Salary for Work in Sweden

• Permanent Establishment in Sweden: If you have a permanent establishment, you are considered a Swedish employer and must pay employer contributions and withhold preliminary tax (withholding tax) on salaries paid in Sweden.
• No Permanent Establishment: If you lack a permanent establishment, you generally do not withhold tax but may still be liable for social contributions on work performed in Sweden. In such cases, the employee reports their income through a preliminary self-declaration (SA tax).

2. Social Security and A1 Certificate

EU legislation and social security agreements between countries can affect where employer contributions are paid. If an employee is seconded to Sweden for a short period (e.g., less than 24 months) and holds an A1 certificate from their home country, you can often avoid paying Swedish employer contributions.

Checklist for Seconded Employees:

• Secure an A1 Certificate (or equivalent under bilateral agreements) from the relevant authority in the home country.
• Keep Copies of the certificates in your personnel records.
• Contact the Swedish Social Insurance Agency (Försäkringskassan) if unsure about the applicable rules.

3. Prepayment for Income Tax (Withholding Tax)

• SINK (Special Income Tax for Non-Residents): If employees stay in Sweden for less than 6 months, they may sometimes be taxed under SINK – a final withholding tax of 25% without deductions.
• Regular Income Tax: If the stay exceeds 6 months, or if the employee becomes a permanent resident, regular Swedish income tax applies according to tax tables.

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VAT (Value Added Tax)

A "foreign entrepreneur" under VAT law is a business that lacks a permanent establishment in Sweden. VAT registration may still be required if:

• You sell goods or services to private individuals in Sweden.
• You conduct VAT-liable activities in Sweden and are not covered by reverse charge (where the buyer would otherwise pay the VAT).

In many cases, you can voluntarily register for VAT. This can be advantageous if you frequently make purchases in Sweden and wish to deduct input VAT.

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F-tax Certificate (Approval for F-tax)

Why is the F-tax certificate important?

• It demonstrates that you are responsible for your own tax and social contributions on payments for work performed.
• The client does not need to withhold tax or pay employer contributions on invoices from you if you have an F-tax certificate.

A foreign company can obtain F-tax even if not all income is taxed in Sweden. However, you may need to provide evidence of your tax history and that you have no outstanding tax debts in your home country. Sometimes, a certificate from the tax authorities in your home country is also required.

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Deregistration and Changes to Company Information

When you cease operations in Sweden or make significant changes (e.g., change of address or representative), it is important to notify the Tax Agency and, if applicable, the Companies Registration Office.

• Deregistration: Done using form SKV 4639 or electronically via verksamt.se.
• Changes: You may need to submit a new preliminary tax declaration to adjust your prepayment tax if business activity decreases or ceases.

Failure to deregister when ceasing to file declarations may result in fees and estimated tax assessments from the Tax Agency.

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Get Help from Revea – Your Financial Partner in Sweden

Establishing a business in Sweden can be complex, especially regarding tax matters, accounting, and employer responsibilities. Our consultants at Revea in Stockholm have extensive experience helping foreign companies – particularly in the construction sector – meet all financial and legal requirements.

• Accounting and Financial Statements: We handle ongoing accounting, financial statements, and annual reports in accordance with Swedish standards.
• Auditing and Quality Assurance: Our authorized auditing team supports you with statutory audits and internal controls.
• Tax and Legal Advisory: We guide you through income tax, SINK, VAT, employer contributions, and double taxation treaties.
• Payroll Management and Personnel: We take care of payroll, tax deductions, and social contributions so you can focus on your core business.

Want a reliable partner to guide you through Swedish regulations, handle necessary registrations, and ensure everything is set up correctly from day one? Contact us at Revea – we’re happy to explain how we can help your company successfully establish itself in Sweden.

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Contact Us

Do you have questions about taxes, declarations, or any other aspect of establishing your business in Sweden?

Feel free to contact us at Revea for a no-obligation discussion and quote. We help you save time, reduce risks, and ensure a smooth start in the Swedish market.

Phone: +46 (0)8 20 31 87
Email: info@revea.se

Serving on a company board often entails significant responsibility and extensive work. The board makes key business decisions, oversees the company’s finances, and is responsible for ensuring that the company complies with applicable laws and regulations. But how does the remuneration for this role work – and what should you consider when paying or receiving board fees?

1. Personal Assignment or Corporate Assignment?

The main rule is that board fees are treated as personal remuneration. This means that the fee recipient normally reports the payment as employment income, and the company is responsible for paying employer contributions. Invoicing the board fee through your own company is only possible in exceptional cases and requires that the assignment is not considered personal in legal terms. In practice, these exceptions are quite narrow, so it is important to ensure that all formal requirements are met before invoicing via another company.

2. Tax Rules and Social Security Contributions

Since board fees are often classified as employment income, both preliminary tax and employer contributions must be reported and paid to the Tax Agency. In turn, the board member receives a payslip similar to that of an employee. To avoid unnecessary tax conflicts, it is wise to:

1. Ensure that the board fee decision is documented in the company – for example, in the annual meeting minutes or a specific agreement.
2. Clarify whether the fee recipient is considered an employee or not – if the board member also has an employment contract with the company, it is necessary to clarify the overall compensation package.

3. Size and Assessment of the Fee

There are no statutory minimum or maximum amounts for board fees in private companies. Often, the company’s size, complexity, and financial situation serve as the basis for determining the fee. For larger, listed companies, the fee may also reflect the risk and responsibility assumed by the board member. Although there are no precise rules regarding the amounts, recommendations and guidelines (for example, from industry organizations) provide guidance for a reasonable level.

4. Division Between Fixed and Variable Components

Some companies choose to split the fee into a fixed part and a variable part, linked to the company’s performance. However, this can create tax challenges, as board fees are often considered a fixed remuneration for ongoing board assignments. If you are considering a variable component, it is advisable to consult an expert to ensure it is handled correctly for tax purposes.

5. Documentation and Transparency

Regardless of the fee structure, clear documentation is essential. Always record the board’s decision on the fee and ensure it complies with the company’s articles of association and relevant meeting resolutions. A transparent and well-documented process minimizes the risk of future inquiries from auditors, the Tax Agency, or other stakeholders.

In summary, there are two key aspects to consider regarding board fees: how the remuneration is classified (as employment income or not) and that the fee decisions are properly documented. The rules can be complex and are updated regularly, so it is wise to seek expert advice to get it right from the start.

Do you have questions about board fees or other financial matters? Contact us at Revea for assistance with accounting, auditing, tax issues, payroll management, or financial advisory. We help you navigate the regulations correctly and ensure that you and your company comply with the applicable rules.

The annual accounts are a central part of closing a financial year, and it is crucial to complete them correctly to avoid unnecessary issues and ensure that the company meets its obligations. Here are some key points to keep in mind:

1. Reconcile the Accounting Records

Before starting the year-end closing, ensure that all accounting records are in order. Verify that all business transactions have been recorded and that there are no unclear or missing entries.

2. Correct Any Errors

Review and rectify any mistakes in the accounting records. Check that balances in items such as accounts receivable and payable match reality.

3. Reconcile Balance Sheet Accounts

Ensure that the balance sheet accounts are accurate by comparing them with supporting documents such as bank statements, receivables, and payables. Any discrepancies must be resolved before finalizing the accounts.

4. Inventory the Stock

If your company holds inventory, it is important to perform a stocktake at the time of closing the books. This ensures that the inventory value in the balance sheet is correct and that any necessary adjustments are made.

5. Prepare the Annual Report

If your company is a limited company, an annual report is required to meet statutory requirements. Ensure that the report is clear, accurate, and provides a true and fair view of the company’s financial position.

6. Seek Assistance if Needed

The year-end closing process can be complex, especially for larger companies or if there have been many transactions during the year. A qualified accountant or auditor can help ensure everything is done correctly from the start.

Proper preparation for the year-end closing not only saves time but also reduces the risk of errors and subsequent adjustments. If you need support with your annual accounts, do not hesitate to contact us at Revea. We assist with everything from accounting and auditing to tax advice and financial planning.

Get in touch, and we’ll review your situation together!

In 2025, several changes will come into effect that affect taxes for both wage earners and pensioners. The new rules are designed to create economic incentives for work and improve financial conditions for older people. Here are the key updates:

Tax Relief for Work and Pension

1. Enhanced Earned Income Tax Credit

From 2025, the earned income tax credit and the increased basic deduction will no longer decrease with higher incomes, resulting in lower marginal tax for high-income earners.

2. Lower Tax for Older Employees

Wage earners who turn 67 during the income year will pay only 8% tax on employment income up to 342,000 SEK, including the increased basic deduction and the enhanced tax credit.

3. Increased Basic Deduction for Pensioners

Pensioners aged 67 or older will pay significantly lower taxes. The difference in net income may amount to about 1,900 SEK per month compared to younger pensioners, thanks to the higher basic deduction.

Economic Benefits of Working Longer

Continuing to work after age 66 offers several benefits:

• Higher Pension
  Every additional 10,000 SEK in annual income increases the future pension by about 110 SEK per year for life.
• Lower Employer Contributions
  Employers pay only the age pension fee (10.21%) for employees who turn 67, compared to 31.42% for younger workers.

Tax on Pension and Combined Income

Combining pension with work provides a more favorable tax outcome, especially after age 67. However, if the income is high, state income tax may apply. To avoid this, you can:

• Reduce the Proportion of Pension Withdrawals
  Withdrawing less of your public pension reduces the risk of exceeding the threshold for state income tax.
• Use the Tax Agency’s Tools
  Run a preliminary tax calculation to optimize the balance between salary and pension.

Key Thresholds for 2025

• State Income Tax
  A 20% tax is levied on taxable income above 625,800 SEK, regardless of age.
• Earning Cap for Pension Rights
  The maximum pensionable income is 604,500 SEK.

Plan for a Better Pension

Working longer and delaying pension withdrawals offer significant financial benefits through both a higher pension and lower taxes. Want to know how your situation will be affected? Contact Revea for advice on accounting, tax, and pension!

Have questions about how the new rules affect you? Get in touch with Revea – we’re here to help you navigate financial matters!

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