Last updated on September 8th, 2024 at 02:46 am
Filing taxes as a non-resident in Sweden can be straightforward, provided you have a clear idea of the requirements defined by the country’s tax law. From expats working in Stockholm to investors earning dividends from Swedish companies, knowing how to handle tax obligations is crucial. This Remitly guide will walk you through the process of filing your tax return in Sweden as a non-resident.
Who needs to file taxes as a non-resident in Sweden?
Sweden’s tax system comprises income tax and social security paid by the employer. Swedish citizens only pay personal income tax. Meanwhile, non-residents must register for the preliminary tax or SINK, the special income tax for foreign residents.
To qualify as a non-resident, you must be a private individual working in Sweden for a Swedish or foreign employer. Non-residents file tax returns on taxable income earned as remuneration from Swedish sources during a specific income year. So if you’ve spent time in the land of köttbullar and since moved back to your home country or still have business dealings in Sweden, you may be required to pay tax.
Taxable income encompasses several potential revenue streams, including:
- Employment income: You’re working for a Swedish employer or performing work in Sweden for over six months for a company based elsewhere.
- Self-employment income: You’re conducting business in Sweden or offering freelance services to companies based there.
- Rental income: You own property in Sweden and earn rental income.
- Investment income: You receive dividends or interest from Swedish companies or banks.
- Capital gains: You have sold a Swedish asset, such as shares or property.
However, progressive partnerships and treaties against double taxation mean that citizens from other countries in Europe—particularly EU/EEA states—do not have to pay tax in Sweden.
What documents do you need to file taxes as a non-resident?
When preparing your Swedish tax declaration, the first step is compiling your documentation. Here’s a brief checklist:
- Personal ID: A passport or national ID for verification purposes.
- Swedish Personal Number (personnummer): This is an individual personal identity number issued by the Swedish Tax Agency (Skatteverket) if you have lived and worked in Sweden. Alternatively, you may be assigned a special tax coordination number if you have always been regarded as a non-resident in Sweden.
- Proof of income: Documents like payslips, invoices from self-employment, rental income statements, and investment reports.
- Bank account details: For making payments or receiving tax refunds.
- Expense receipts: To prove any deductible expenses, such as travel, social insurance payments, or business-related costs.
- Tax return form: Fill and complete the SINK form and verify that all your personal data is correct.
- Double taxation certificates: Depending on your eligibility, this ensures you don’t pay tax on the same income in both Sweden and your home country.
How to file income tax as a Swedish non-resident
With your Swedish Personal Number (personnummer) or a coordination number for tax purposes, the tax filing procedure is pretty quick and simple:
1. Choose the correct tax form
Select the SINK application form for your tax return if you have worked and earned employment income in Sweden for less than six months. Alternatively, you can select the Income tax return form for business income and related expenses.
2. Complete the tax return
File taxes online using the Swedish tax authority’s (Skatteverket) e-service. Available in English, it offers a convenient, streamlined filing process. You could also use paper options; just download and fill out the appropriate forms.
3. Submit your tax return
Submit your tax return electronically via the Skatteverket website or mail the paper forms to the Swedish Tax Agency.
4. Pay taxes due
Follow the instructions provided by the Skatteverket to settle any tax liabilities. You’re required to make payments personally through your tax account.
Key tax deadlines in Sweden
Sweden’s tax year runs from January 1 to December 31, which is in line with the calendar year. This makes it easy to remember key filing dates and deadlines every year. As a non-resident, you’ll typically file your personal income tax return by May 2 of the year following the income year.
Penalties
The Swedish Tax Agency can impose penalties of up to three late filing charges, each of 1,250 SEK (approximately 120 USD) and totaling 3,750 SEK—around 360 USD.
Filing taxes late attracts an initial penalty for missing the first deadline of May 2nd. If you fail to file your taxes within three months of this ordinary deadline, you’ll incur a second late filing charge. And if you delay by five months or more, you may end up paying a third fine.
What are the rates and tax deductions for Swedish non-residents?
The Swedish income tax system includes both national and municipal taxes in the annual tax bill. These deductions vary for non-residents, depending on the source and amount of income:
- SINK: Apply for SINK as soon as you start working in Sweden to benefit from the reduced, flat 25% tax rate on remuneration.
- Progressive Tax: These pricing rates vary from 32% to around 52% depending on the municipality and income thresholds for Swedish residents or long-term non-residents.
- Capital Gains Tax: This typically comprises 30% of gains from the sale of shares and other securities.
As a non-resident, you’re entitled to claim tax relief to lower your tax bill. Different tax credits and deductions may be applicable depending on individual circumstances:
- Travel expenses: Deduct costs incurred commuting to Sweden for work.
- Business expenses: Allows self-employed individuals to deduct business expenses.
- Charitable donations: Donations to Swedish-approved organizations may not attract tax.
- Double taxation relief: Sweden has several tax treaties with various EU/EEA states and other nations, helping you avoid paying tax twice.
Common mistakes when filing tax returns in Sweden
Tax declarations are often complex for non-residents. These are some of the most common pitfalls to avoid:
- Using the wrong form: Ensure that you use SINK for short-term employment income and INK1 for other types of income. The Skatteverket e-service will help you understand the distinction.
- Missing deadlines: File on time to avoid late fees and penalties.
- Incorrect reporting: Accurately report all your personal data and sources of income.
- Ignoring tax treaties: Take advantage of existing agreements to avoid double taxation if you’re from an eligible country.
Where to get help filing taxes
With a good grasp of Sweden’s tax system, filing taxes as a non-resident can be a breeze. Online filing options make it easier for those who don’t live in the country, and help is broadly available through:
- The Skatteverket: The Swedish Tax Agency offers extensive resources and support in English, as well as a fully digital filing system available online.
- Online tax services: Various online platforms assist non-residents in tax matters. For instance, Tax Help Sweden can help you prepare and submit your tax return.
- Tax consultants: Professional assistance is a surefire way to simplify the filing process and ensure you meet your tax obligations on time.
FAQs
Who needs to file taxes in Sweden?
Individuals who receive remuneration from Swedish companies must pay tax. This includes any non-resident who earns taxable income from Swedish sources.
How do I become a non-resident for taxes?
According to Swedish tax law, you may be considered a tax resident if you have investments or provide freelance services in the country.
Does the U.S. have a tax treaty with Sweden?
Yes, Sweden has an ongoing tax treaty with the U.S. This ensures American citizens working in Sweden avoid double taxation or paying foreign tax.
Do I have to report income I earned in other countries?
Non-resident taxpayers are only required to report income from Swedish sources. Unlike residents, non-residents generally don’t need to report their worldwide income.
Can I file my Swedish taxes in English?
Yes, the Swedish tax authority accepts declarations in English from foreign taxpayers.