Along with other European countries, Sweden has a special tax regime in place, applying to highly skilled foreigners relocating to Sweden for work purposes. This tax regime is known as the "Expert Tax Regime." The Swedish Government recently announced their intention to make this tax regime more beneficial by lowering the so-called “salary threshold requirement.”
What is the Swedish Expat (Expert) Tax Regime?
The Swedish Expert Tax Regime was implemented with the specific purpose of enabling Swedish companies to access highly skilled foreign labor more easily. Due to Sweden’s high income taxes, which are quite infamous globally, the Expert Tax Regime allows eligible individuals to enjoy a 25% tax break, meaning that only 75% of the person’s income is subject to Swedish Income Tax. Some benefits, such as cash allowances for children's schooling, can be received completely tax-free under the regime.
The reasoning behind the implementation of the Tax Regime was to increase Swedish companies’ competitiveness in the global labor market. Employers of individuals covered by the Tax Regime also benefit, as the portion of the salary that is tax-exempt is also exempt from Sweden’s very high Social Security Contributions. As a result, it is not uncommon for employers to assist foreign employees with applying for the Swedish Expert Tax Regime, usually by hiring a tax law firm to handle the drafting and filing of the application. The regime is applicable for seven years.
What are the Requirements to be Eligible for the Swedish Expert Tax Regime?
In short, there are two separate legal grounds that one can fulfill to be covered by the Swedish Expert Tax Regime. The first ground involves an assessment of the skills of the employee. In more detail, employees who possess the following skills are covered by the Expert Tax Regime:
Specialist tasks with such a focus or at such a level of competence that it entails significant difficulties in recruiting within the country.
Qualified research or development tasks with such a focus or at such a level of competence that it entails significant difficulties in recruiting within the country.
Executive tasks or other tasks that involve a key position in a company.
Secondly, an employee can also qualify for the Swedish Expert Tax Regime under the so-called “salary threshold requirement,” which is a minimum monthly wage requirement. For the tax year of 2024, this threshold is set at a monthly gross wage of SEK 117,000.
What are the Suggested Amendments to the Swedish Expert Tax Regime?
In April 2024, the Swedish Government announced its intention to reduce the Salary Threshold Requirement by 25%. The objective of this change is to allow more foreign employees to be covered by the Expert Tax Regime.
Considering a Job Offer from a Swedish Company?
Are you considering accepting a job offer from a Swedish company and would like to be included in the Swedish Expert Tax Regime? Do not hesitate to reach out to us. We help employees and employers with all aspects related to the Swedish Expert Tax Regime.
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