The government announced its plans for an “economic employer” concept for taxing workers who work temporarily in Sweden.
Previously, the government had planned to introduce the "economic employer” concept with respect to the taxation of workers who were temporarily working in Sweden. This proposal, however, was put on hold in 2018.
The government has again announced its intention to re-introduce the concept and that the rules would be effective 1 January 2021.
Historically, the approach applied by Swedish tax law has been that the employer is considered to be the company that pays the salary to the employee. Accordingly, this meant that foreign staff who have temporarily worked in Sweden may not have been subject to tax in Sweden because the employer paying the wages was not a Swedish company.
According to the proposal, a decisive factor for determining whether the employee is to be taxed in Sweden would be who the employee works for—and not who pays the employee’s salary. There would be exceptions provided with respect to certain intra-group situations.
Read a September 2019 report (Swedish) prepared by the KPMG member firm in Sweden
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.