According to Swedish tax law, a housing benefit is taxable for the employee, that is, the person who receives the housing benefit from their employer. However, there are exceptions—situations where a housing benefit is not taxed. And how is the taxable value of the benefit calculated in Sweden? Read on, and we will answer these questions.
What is a housing benefit?
An employee, i.e., a worker, is considered to receive a housing benefit when their employer provides them with accommodation at the employer’s expense.
This can involve any type of accommodation, regardless of standard or location. In certain industries, it is common for employers to cover employees' housing costs. For example, this may occur when an employer sends an employee to work temporarily in another country. It is also common during large construction or installation projects.
How is a housing benefit taxed in Sweden?
The general rule in Swedish tax law is that all benefits received by an employee must be taxed. Typically, the taxable value of a benefit should be calculated based on the market value of the benefit. However, in certain cases—especially in relation to the pricing of rented housing—the price can vary significantly, depending on the type of accommodation, whether the housing is rented from a private individual or a company, and similar factors.
Since companies often have to pay significantly more to rent housing than private individuals, the Swedish Tax Agency ("Skatteverket") has introduced specific standard rates for calculating the value of a housing benefit. The value of the housing benefit, according to the standard rates, depends on the region of the county in which the property is located, the “value year” of the property, and the number of square meters. In many cases, the benefit values derived from using the Swedish Tax Agency's standard rates are favorable.
The taxable value is subject to employment income tax, at progressive rates ranging from 30 % to 55 %. In some cases, such as when a person is taxed under the Swedish Non Resident Tax Regime ("SINK"), the tax rate can be lower.
Are there exceptions to the taxation of a housing benefit in Sweden?
There are several exceptions to the general rule that a housing benefit is taxed as employment income. In Sweden, for example, no tax is levied on an employer-provided accommodation during business travel. The same applies when a person temporarily works in another location within Sweden. Whether any exception applies should be analyzed by a tax lawyer.
Taxation of owners of companies that own residential properties
So far, we have only addressed the situation where an employee receives a housing benefit from their employer. But what about individuals who own companies that, in turn, own residential properties? Are they taxed for receiving a housing benefit? According to case law, there is a presumption that owners of such companies should be taxed for a housing benefit. To avoid taxation, one usually needs to prove that they did not have access to the property, for instance, if it was rented out. However, the legal situation has become more complicated since the Supreme Administrative Court declared that mere entitlement to a property is not sufficient to trigger withdrawal taxation. Therefore, there is a distinction between individuals actively working in a company and potentially having access to a property, and passive shareholders who may also have access to a property, since the first group would be subject to employment income taxation, but the other group would be subject to withdrawal taxation.
Employers in Sweden with housing benefits—what are the rules?
As an employer, you are required to include information about any housing benefit in your monthly employer declarations. You must therefore report a correct value to the Swedish Tax Agency, which will then form the basis for any taxes and employer contributions. In most cases, it is advisable to hire a tax lawyer who can calculate the lowest legally permissible value for a housing benefit. Note that this also reduces the employer's social security contributions in Sweden.
Do you, as an employer or employee, have any questions regarding the Swedish taxation of housing benefits? Please feel free to contact us.
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