In late February 2025, the Administrative Court of Appeal in Stockholm issued a ruling concerning Sweden’s so-called Expert Tax regime. The decision puts an end to the Swedish Tax Agency’s (Skatteverket) restrictive interpretation of one of the eligibility criteria, broadening access to tax relief for expatriates working in Sweden.
What Is Sweden’s Expert Tax Regime?
Sweden has long offered special tax relief for individuals who are not Swedish citizens and have not been tax residents in Sweden for the past five calendar years. Upon approval, such individuals can benefit from a 25% exemption on taxable employment income, along with other minor advantages.
To qualify, an individual must either hold a particularly qualified position or earn a gross salary exceeding a specific threshold, which for the 2025 tax year is set at SEK 88,201 per month. Another key requirement is that the individual must be employed by a Swedish employer or a foreign employer with a permanent establishment in Sweden.
What Was the Court Case About?
The case concerned an individual who had begun working in Sweden after being assigned by their U.S. employer to serve as CFO of a Swedish company. The individual continued to receive salary payments from their U.S. employer, a common arrangement to ensure continuity in pension contributions and social security benefits in the home country.
The Swedish Tax Agency argued that the individual should not qualify for expert tax relief because they were not formally employed by a Swedish company. However, the Swedish company for which the individual worked covered the full cost of the salary, which was invoiced to the U.S. employer. A 2021 Supreme Administrative Court ruling had already established that such salary payments could be considered when determining whether the salary threshold for expert tax relief was met.
Despite this precedent, the Swedish Tax Agency maintained that the lack of a formal employment contract with a Swedish company meant that a fundamental requirement for expert tax status was not fulfilled.
How Did the Court Rule?
The Administrative Court of Appeal held that an overall assessment should be made when determining whether an individual has a Swedish employer. The court referred to the 2021 Supreme Administrative Court ruling, which endorsed a less formalistic approach to defining an employer. Similar holistic assessments exist in both Swedish tax law and labor law.
The court identified several factors supporting the conclusion that the American CFO had a Swedish employer:
The individual worked exclusively in Sweden for the benefit of the Swedish company.
The Swedish company derived the full benefit from the CFO’s work and bore the financial risk.
The Swedish company ultimately bore the cost of the salary.
The individual participated in the Swedish company’s incentive program, which was based on its financial performance.
Leave entitlements, including vacation and public holidays, followed Swedish regulations and the Swedish company’s policies.
The individual had no guaranteed right to return to their previous position with the U.S. employer after the assignment ended.
The Swedish company was deemed to have assumed the role of employer in a civil law sense.
The salary payment arrangement via the U.S. employer was based on practical considerations, such as social security compliance, and was consistent with the purpose of the expert tax rules.
Implications of the Ruling
By rejecting the Swedish Tax Agency’s restrictive interpretation, this ruling marks a significant development for expatriates seeking to benefit from Sweden’s expert tax regime. It underscores the importance of a substantive, rather than purely formal, evaluation of employer relationships. As a result, more international professionals working in Sweden may now qualify for expert tax relief, making Sweden a more attractive destination for highly skilled workers.
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