Taxation of international executives
Are there special residency considerations for short-term assignments?
A foreign employee will be considered as resident in Sweden if he/she has his/her principal home in Sweden or is present in Sweden for at least six 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?
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