Taxation of international executives
Are there social security/social insurance taxes in Sweden? If so, what are the rates for employers and employees?
Swedish social security contributions for employed personnel are payable by the employer at a rate of 31.42 percent (2014) of the gross salary. There are no upper limits in respect of employer contributions. Please note that the employer social security contributions are levied at a rate of 10.21 percent for employees born 1938 to 1948, and at a rate of 15.49 percent for employees born 1988 or later.
Swedish social security contributions are payable by the employee at the rate of 7 percent of the net earned income with a cap at an annual income of SEK 458,571 (maximum contribution SEK32,100). One-hundred percent is allowed as a credit against income taxes.
Sweden has concluded a number of conventions on social security with different countries, mostly within Europe but also including non-European countries such as Morocco, Canada, Quebec, Turkey, Israel, and the United States. Since Sweden is a member of the EU, the provisions in Council Regulations 1408/71 and 883/2004 will apply for intra-community transfers.
Where an employee is assigned from a non-treaty country to perform work in Sweden, different rules apply depending on the length of stay. If the intended length of the stay does not exceed 12 months, no social security levies are payable. If the length of the stay exceeds 12 months, levies are payable in full from the first day. If the employer has a permanent establishment in Sweden full charges are payable from the first day.
As a main rule, Swedish social security contributions are always payable by a Swedish employer or a foreign employer if the work is performed in Sweden. This applies irrespective of the nationality of the employee. For foreign employers with no permanent establishment, the liability to pay social security contributions could be transferred to the employee by an agreement between the employer and the employee.
Are there any gift, wealth, estate, and/or inheritance taxes in Sweden?
The net wealth tax was abolished from 1 January 2007.
Inheritance and gift tax was abolished for both private individuals and companies from 1 January 2005.
Are there real estate taxes in Sweden?
From 1 January 2008, Real Property Tax on Private Residences is abolished and replaced with a Municipal Property Fee. The Municipal Property Fee for a house is SEK7,074 fee or 0.75 percent of the assessed value of the property if that amount is lower.
Are there sales and/or value-added taxes in Sweden?
The standard rate of VAT is 25 percent. However, there is a reduced rate of 12 percent for certain goods and services such as food and hotel accommodation. In addition, there is a reduced rate of 6 percent for certain goods and services such as books, newspapers, passenger transportation, cultural events, and so on.
Are there unemployment taxes in Sweden?
No. However, one can voluntarily contribute to an unemployment fund.
Are there additional taxes in Sweden that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
There are no local taxes in Sweden. The municipal income tax referred to above is not a local tax, but is an integrated part of the general income tax system.
Yield tax is levied on foreign life insurance policies. A Swedish resident policyholder will be liable to pay an annual yield tax levied at a rate of 30 percent of a deemed yield. Tax on non-Swedish pension insurance policies, which are considered qualifying for Swedish tax purposes, is levied at a rate of 15 percent and is payable by Swedish resident policyholders. The tax applies where contributions have been made from 1 January 1997.
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