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
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