Taxes in Sweden
Here's your quick guide to the Swedish tax system, 5 pointers.
1. Tax rates for individuals
There are many different kinds of taxes in Sweden. Most people pay only local tax on their annual income. This tax rate varies depending on the local authority and ranges, roughly, from 29 to 35 per cent. Sweden's average local tax rate is around 33 per cent.
Earners above a certain income threshold set by the Tax Agency (link in Swedish) pay an additional 20 per cent state tax.
Taxes in Sweden include a so-called basic tax-free allowance, a sum that is exempt from the taxable income. The sum differs depending on whether a person is under or over 65, see link above.
For capital gains, the tax rate is 30 per cent. If you make a profit on your property sale, the profit is taxed at 22 per cent. If you've paid interest on loans and/or mortgages during the year, you're entitled to a tax deduction.
Since 2005, there is no inheritance tax in Sweden, and since 2007, there is no wealth tax.
Tax relief for foreign 'experts'
Foreign citizens who are high earners or are categorised as 'experts', 'researchers' or 'key staff' can apply for a tax relief if they intend to stay in Sweden for a maximum of seven years.
2. Corporate tax
Sweden currently levies a corporate income tax of 20.6 per cent. The country has gradually lowered its corporate tax since 2009, when it was at 28 per cent, to today’s rate.
These steps have been taken both by centre–right and centre–left governments.
3. VAT
Value-added tax (VAT) translates as mervärdesskatt in Swedish, but is usually called moms.
The standard VAT rate for goods and services in Sweden is 25 per cent, but there are also certain reduced rates of 12 per cent (e.g. foodstuffs) and 6 per cent (e.g. books, newspapers, passenger transport within Sweden).
The Swedish Tax Agency's website has an overview of which VAT rates apply to which goods and services.
4. Taxes and public spending
The Swedish welfare system is based on the general principle that everyone contributes, and everyone gets equal access to the same safety net and public services. The Swedish tax ratio started increasing more during the 1960s and 70s as the country's public sector expanded. It peaked at close to 50 per cent in the 1990s. Today, the largest share of public spending goes to social protection, which covers childcare and pensions, among other things.
In 2023, taxes in Sweden amounted to 40.7 per cent of GDP. The average tax ratio among the OECD countries is 34 per cent.
5. The Swedish Tax Agency
Should you move to Sweden, your everyday life here will involve the Swedish Tax Agency at some point. It is not only the government agency in charge of collecting taxes, it also manages civil registration of private individuals in Sweden.
Sweden has around 8 million taxable people, and a majority of these submit their annual tax return electronically. In 2023, more than 7 million people did.
