SWEDEN Law and Practice Contributed by: Christoffer Dahl, Niclas Söderlund, Michel Weimer and Björn Mårtensson, XR Legal
Corporations Capital gains on assets not covered by any exemp - tion (such as the participation exemption) are taxed as business income, ie, at 20.6%. 3.5 Employment Income For the Employer The general rule is that employers pay “social secu - rity contributions” of up to 31.42% of their employ - ees’ total gross remuneration. Reduced rates may apply based on, for example, age, assignment (R&D), type of remuneration, etc. Gross remuneration and social security contributions are generally income tax deductible for the employer. R&D Reduced social security contributions may apply for employees working in qualifying areas of research and development. When calculating employer social secu - rity contributions and the general payroll tax on contri - bution-liable remuneration, a deduction shall be made of 20% of the contribution base for a person engaged in research or development. The deduction may not result in the contributions being reduced below the old-age pension contribution (10.21%). A Swedish employer hiring local employees abroad would generally not be subject to Swedish social security contributions. However, the Swedish employ - er may be liable to pay similar taxes in the employee’s residence state. Foreign employers (ie, those with no permanent estab - lishment in Sweden) engaged to provide foreign work - ers for a project in Sweden are required to register for F-tax in Sweden to avoid the Swedish contractor being required to withhold 30% of the invoiced amount to cover taxes on the foreign employer’s behalf. For the Employee Sweden applies a progressive tax rate on employment income. To simplify somewhat, employment income up to SEK660,400 (for 2026) is subject to municipal tax of approx. 30–35%. Employment income exceed - ing this threshold will also be subject to a 20% state tax.
It should be noted that there are variations based on age and type of income. Foreign non-resident employees hired to do work in Sweden are required to pay the Swedish special income tax for non-residents. Expert tax Employees who are not Swedish tax residents, have not resided or had habitual residence in Sweden dur - ing the five previous calendar years and have the intention to move to Sweden for a maximum of seven years to work for a Swedish employer (or a foreign employer with a permanent establishment in Sweden) may have the possibility to apply for expert tax, pro - vided that their competence, assignment in Sweden and remuneration fulfil certain requirements. 3.6 Other Income No additional information has been provided. 4. OECD/G20 Global Tax Reform 4.1 Pillar One – Amount B Sweden has not yet implemented Amount B. As the Amount B framework has been incorporated into the OECD Transfer Pricing Guidelines as an appendix, and Swedish case law has confirmed these Guidelines as a basis for the interpretation of relevant domestic tax rules, the Amount B framework still has influence over Swedish tax law, although it is not legally binding from ratification. 4.2 Pillar One – Amount A Sweden usually welcomes OECD-based solutions to global tax issues. However, it could be argued that the reallocation under Amount A would negatively impact the Swedish tax base. This is because Sweden has a small population in relation to companies operating in the global market. By being forced to allocate profits to customers’ jurisdictions, large Swedish companies will have to allocate less profits to Sweden. 4.3 Pillar Two Sweden has implemented Pillar Two through domestic legislation, namely the Supplementary Tax Act. The law entered into force on 1 January 2024, although
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