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Sweden: Tax proposals in 2020 budget bill

Sweden: Tax proposals in 2020 budget bill

The government on 18 September 2019 submitted the 2020 budget bill that includes tax proposals and reflects certain reform initiatives.


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Among other measures, the 2020 budget bill proposes the following tax amendments that would be effective 1 January 2020:

  • Repeal of the upper tier limit for state income tax (the so-called “value tax”)
  • Reduced tax rate for individuals over the age of 65 years
  • Requirements for certain electronic payments
  • Reduced advertising tax rate

The government also indicated its intentions to implement certain tax-related initiatives, including:

  • A “financial employer” concept effective from 1 January 2021 (that is, the so-called economic employer concept when taxing foreign residents who work temporarily in Sweden)
  • Tax on the financial sector effective from 1 January 2022 (that is, a tax to be imposed on the financial sector or a "bank tax”)
  • Changes to the rules for deduction for research and development (R&D) effective from 1 April 2020 (to further reduce employers' fees for those who work with R&D in a company)
  • Increased taxation by foreign sellers regarding chemical taxes (to revise the rules that currently exempt from the chemical tax certain foreign sellers that make sales directly to Swedish consumers)
  • Value added tax (VAT) e-commerce package (to revise the VAT rules for e-commerce between businesses and consumers) to be effective 1 January 2021
  • Tax on waste incineration and tax on plastic carriers

Read a September 2019 report (Swedish) prepared by the KPMG member firm in Sweden

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