Taxation of international executives
Are there special residency considerations for short-term assignments?
A foreign employee will be considered as resident in Sweden if they have their principal home in Sweden or is present in Sweden for at least 6 consecutive months. A stay is considered continuous despite temporary absence.
Non-residents are taxed under the special income tax act for non-residents. However, the employee may voluntarily choose to be taxed under the rules for tax residents.
Are there special payroll considerations for short-term assignments?
An application must be made in order to be taxed under the special income tax for non- residents.
What income will be taxed during short-term assignments?
If the employee is considered non-resident, only employment income (remuneration and benefits-in-kind) derived from Sweden will be taxed in Sweden. Trips to and from Sweden, when the employee starts and ends the assignment, are tax-free as well as housing if temporarily assigned.
For resident short-term assignees, ordinary tax rules apply.
Are there any additional considerations that should be considered before initiating a short- term assignment in Sweden?
All information contained in this publication is summarized by KPMG AB, the Swedish member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on Inkomstskattelagen (1999:1229), Lag (1998:674) om inkomstgrundad ålderspension, Socialförsäkringslagen (1999:799), Socialavgiftslagen (2000:980), Lag (1984:1052) om statlig fastighetsskatt, Lag (2007:1398) om kommunal fastighetsavgift, Skattebetalningslagen (1997:483), Lag (2007:346) om skattereduktion för hushållsarbete, Skatteförfarandelag (2011:1244), Folkbokföringslagen (1991:481), Lag (2001:1227) om självdeklarationer och kontrolluppgifter.
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