Annual settlement of the company in Sweden

All entrepreneurs who are tax resident in Sweden are required to submit an annual company return to the Swedish Tax Agency - Skatteverket - at the end of each tax year. The Swedish tax authorities issue all legal entities with an individual number - Personnummer or Samordningsnummer - which is necessary for the settlement of income tax and VAT. All formalities can be completed via www.skatteverket.se. All Swedish entrepreneurs and employees of Swedish companies who are tax residents in the country are required to submit an annual tax return. According to Swedish legislation, a tax resident is a person who is permanently resident in Sweden and at the same time resides in the country for more than 6 months. The Swedish tax authority, the Skatteverket, is the authority that accepts tax returns.

During the course of the tax year, business owners pay advance income tax - Preliminärskatt - by the 12th of each month (if the 12th falls on a weekend, the payment must be made on Monday). At the very beginning, when setting up the business, the entrepreneur registers with the Swedish tax authorities. At that time, he or she provides an approximate projected income for the company, on the basis of which Skatteverket calculates the monthly rate of advances. At the end of the year, when examining the declaration, if the declared income is higher than expected, the office will refund the difference together with the tax refund. If the company's income turns out to be higher than initially calculated, we will have to make a surcharge.

The basis for income taxation in Sweden is the net income of the company during the tax year. The costs that the company incurs in connection with its operation are deducted from the profit. Incorporated entities pay tax at 28%. In the case of a rotation of company reserves and deposits, this tax can be reduced to 26%. In addition, the fiscal burden also includes municipal tax, which ranges from 29 to 34%. In addition to this, a national tax of 20 per cent is added for income above SEK 468,700, while the rate rises to 25 per cent for income above SEK 675,700. It is worth noting that the tax-free amount in Sweden (deducted from the income tax base) is respectively:

• with low earnings, it is between SEK 18 900 and SEK 34 300;
• for higher earnings, it is between SEK 350,660 and SEK 13,100.

Entrepreneurs registered for VAT in Sweden should include it in their return. The standard rate is 25% and this covers most services and goods. 12% - the reduced rate - applies to such things as hotel services or food. On the other hand, the low rate of 6% applies to e.g. books, newspapers, passenger transport tickets, theatre, cinema, zoo, circus or concert tickets. The deadline for filing returns, entrepreneurs have 2 May. Those wishing to file electronically should set up a digital mailbox beforehand. Logging in requires the use of BankID. Penalties for non-compliance are financial - from SEK 1 150 upwards. Once we have submitted the relevant documents, the Skatteverket has six months to issue a decision. The tax refund will be sent to the bank account number provided by the company owner in advance. If the Swedish tax authorities require a surcharge, we have 90 days to pay the arrears, while the time to appeal the decision is extended to a year. All rules on corporate taxation in Sweden are in accordance with international accounting standards and the rules set by the EU.

In addition to the settlement, all entrepreneurs who employ staff are required, in January of each tax year, to issue their subordinates with tax cards KU-10, KU-13, KU-14 - necessary for their tax settlement. In addition, doing business in Sweden requires:

• registration with Försäkringskassans on the basis of a completed Uppgifterförregistrering form, a document with a Personnummer or Samordningsnummer and a document confirming registration of the company in Sweden;
• registration at the tax office - Skatteverket - as an excise taxpayer. The regulations also cover those companies whose excise duty is 0. After registration, the entrepreneur receives a form with a tax refund date, which is generally 30 days.
• pay social security contribution, which is 31%;
• pay dividend tax, the rate of which is 30%, although in the case of Polish business owners in Sweden it can be reduced thanks to the convention concluded on 15 October 2005 between the Government of the Republic of Poland and the Government of the Kingdom of Sweden;
• keep books of account - this is a statutory obligation - bokföringslagen - applicable to all who conduct business in Sweden, regardless of place of residence. A special calculator available at the Swedish Tax Agency's official address: skatteverket.se may be of some assistance. This tool is used to calculate contributions to income tax, as well as employee taxes and social contributions.

Many entrepreneurs are required to pay service and goods tax - VAT. Its basic rate is 25%. In addition to this, there are also pension contributions, if regulated by a collective agreement, at an average rate of 6 to 7%. The business owner is exempt from VAT when all his clients are registered for VAT. In addition, services in the field of:

• education;
• banking
• finance;
• social care;
• medical care;

are exempt from this obligation. In addition, employers are required to register and are subject to compulsory social contributions for employees, which amount to 33%. Employees, on the other hand, have to pay contribute at 7%.

The company's annual accounting in Sweden follows slightly different rules for foreign entrepreneurs who, for example, do not have a registered office in the country. To begin with, those who operate in this country with a permanent establishment are not obliged to register as VAT payers when their customers are entered in the register. However, those who have had to make an entry bear all the costs associated with this fiscal burden. A VAT return must be submitted to the relevant authorities once a month. In addition, a summary report must be submitted once every three months if the company:

• transports goods from Sweden to other EU countries;
• their turnover is exempt from VAT in Sweden because the purchaser is a VAT payer in an EU country other than Sweden;
• the purchaser uses its own VAT identification number.

A statutory special tax for pensions (SLP - särskild inkomstskatt på pensionskostnader) is also required for foreign owners.

If, on the other hand, the company does not have a permanent establishment in Sweden, the owner must send a tax declaration to the Skatteverket for foreign entrepreneurs. The tax office then has two to six weeks to send the F-skattesedel (tax card) and a certificate of registration as taxpayer F to the Skatteverket. These entrepreneurs are exempt from the general payroll contribution - allmänlöneavgift - as the employees, in this situation, pay the SA tax themselves each month.

Persons whose income is 90% derived from business activities in Sweden are entitled to deduct various costs from their income tax. Among other things, relief can be obtained in Sweden:

• for transport from the place of residence to the place of work;
• expenses for rent and utilities;
• for renting premises for an office, shop or residence;
• for running a dual household;
• for the purchase of instruments or tools needed to run a Swedish company;
• for business telephone calls;
• for the purchase of protective clothing and personal protective equipment;
• for other work-related expenses;
• for business trips - Traktamente;

Swedish company owners can also deduct costs for:

• depreciation of machinery;
• buildings;
• equipment;
• reserves;
• patents and trademarks;
• losses;
• royalties;
• rental expenses.

Poles running a business in Sweden will avoid taxation of the company's income in Poland. They are also entitled to deduct 30% of the subsistence allowance, which in Sweden is SEK 459 per day.

Employees who stay in Sweden for up to 6 months only pay SINK tax with a rate of 25%. The Swedish economic system provides for various forms of taxation. This has the advantage of being able to choose and match the best option available, which depends on the type of business. However, Swedish businesses also have points in common that are not influenced by the type of business, such as registration, declaration of income, payment of advance income tax and the obligation to file an annual return with the tax authorities.

Registration of the company is done by the entrepreneur before starting the business. At the same time, in the first year of operation, he submits an estimated income report. On this basis, the Swedish Tax Agency - Skatteverket - calculates the amount of advance income tax payments - Preliminärskatt. Advance payments must be made by the 12th of each month. If the 12th falls on a weekend, the payment is due on the following Monday.

Another important point is the preliminary tax declaration, the Preliminärinkomst-deklaration. Business owners are obliged to submit this via an e-service (E-tjänst), which can be accessed via the tax office's platform at skatteverket.se. This is done in order to regulate the rate for advance income tax if the company's income in a given year is worse or better than that projected in the first year of Swedish business. Depending on the type of Swedish business carried out, we distinguish between annual tax returns of the following types:

1. sole proprietorships - Enskildnäringsidkare - the income earned from running a sole proprietorship, Skatteverket - the tax office - considers as income for the business owner. Hence, business tax is declared on a single tax return in this case, and the entrepreneur, who pays contributions and taxes, is entitled to the same pension and health benefits as full-time employees. The tax return for the previous year must be submitted by 2 May, using the form sent out by the office - INKOMSTDEKLARATION 1;
2. civil law partnerships - Enkeltbolag - income tax, by 2 May, is settled in an appendix to the annual tax return, as business profits are equated with the income of the owner and partners of the partnership;
3. general partnershipse - the regulations relating to the taxation and operation of general partnerships are contained in the General Partnerships and Civil Partnerships Act (Lag om jandelsbolag och enklabolag, SFS 1980:1102);
4. commercial companies - Handelsbolag - HB - the tax base here is the value of the profit share held by the individual shareholders. Therefore, the income of this type of company:
   • is included on the tax return of the companies, forming a trading company;
   • or each shareholder, individually, reports the income received from this activity on their return.
   As legal entities, Handelsbolag are obliged to submit annual financial statements for the previous year;
5. limited liability companies - Aktiebolag - AB; private joint stock companies - Privataktiebolag; public joint stock companies - Publiktaktiebolag; The financial year of these companies:
   • need not coincide with the calendar year;
   • is designated in the memorandum of association (Stiftelseurkund).
   Acts governing these companies:
   • Stock Corporation Act - Aktiebolagslagen, SFS 2005:551;
   • implementing regulations - Aktiebolagsförordningen, SFS 2005:559;
   • other regulations on accounting, bookkeeping and finance.
6. limited partnerships - Kommanditbolag - KB; branches of companies - Filial; business associations - Ekonomiskförening; foundations - Stiftelse; European joint stock companies - Europabolag;
   The owners of these companies, at the end of March/early April, receive an income tax settlement form - INKOMSTDEKLARATION 1 - from the tax office - Skatteverket. The documents, together with the annual report, should be submitted no later than 2 May.

The documents needed to file an annual tax return in Sweden depend on several factors:

• the country of tax residence;
• the type of business you run;
• whether you have employees.

Poles that run business in Sweden but are tax resident in their home country:

• are required to settle with the Polish tax office. In the settlement, you must include the income earned from running a Swedish company. To do so, download the PIT-36 form and add appendix ZG;
• if the business conducted in Sweden is the only source of income, the entrepreneur is entitled to abolition relief. In that case, you need to complete a PIT/0 declaration;
• If the owner of a Swedish business pays insurance contributions in a country other than Sweden, he/she is obliged to present an A1 form and certificates confirming the amount of contributions paid.

Non-Swedish citizens who are Swedish tax residents and who conduct business in Sweden:

• if you run a sole proprietorship in Sweden, you must settle your tax with the Swedish tax authorities there. A statistical number is required for this, as well as a VAT number, which can be obtained by submitting the following documents:
  • form SKV 4632;
  • an entrepreneurs' tax application, which can be downloaded from the Swedish Tax Agency's website → skatteverket.se;
  • a copy of your passport;
  • a certificate from the Social Insurance Institution (ZUS) stating that you are not in arrears with your social security payments;
  • a certificate from the Social Insurance Institution (ZUS) stating that you are not in arrears with your tax payments.
  It is necessary to have all documents translated into Swedish by a sworn translator;
• all Swedish business owners unconditionally apply through the skatteverket.se, website regarding the issuance of an income tax decision for persons living abroad. Required documents:
  • SKV printout 4350;
  • photocopy of identity document;.
• it is necessary to complete INKOMSTDEKLARATION 1, sent between 19 March and 15 April by the Skatteverket - the tax office.

Swedish entrepreneurs who are registered as employers are obliged to issue KU-10, KU-13 or KU-14 tax cards to their subordinates every year in January.

• January - December - the duration of the tax year in Sweden;
• January - this is the time when you have to issue the relevant documents for income tax settlement to your employees: KU-10, KU-13 or KU-14.
• 19 March - 15 April - during this time the tax office - Skateverket - should send you the income tax return INKOMSTDEKLARATIOIN 1. If you have not received the form by the end of this period, notify the Skatteverket and download a new form from skatteverket.se;
• 1 March - 2 May - time for entrepreneurs to submit their annual tax return;
• 15 August - 15 September - during this period, the business owner should receive decisions from the Swedish tax authorities.

Tax residents in Sweden are entitled to various tax reliefs, which are taken into account when filing their annual return with the Swedish tax authority, Skatteverket.

Swedish employees and business owners are entitled to relief:

• for accommodation - this applies to temporary employees. The following must be submitted to the office:
  • a tenancy agreement for the accommodation;
  • receipts for accommodation;
  • bank statements for utilities and rent;
• for commuting to work from their permanent place of residence. Reimbursement is granted for one journey per week, by the cheapest means of transport. In the case of travel by air and train, the lowest ticket prices are not taken into account;
• for travel to work from accommodation within Sweden. If public transport is not available, the state reimburses SEK 18.5 per 10 km;
• for the purchase of apparatus and tools necessary for the work, excluding mobile phones and computers;
• for renting premises, e.g. for a business;
• for costs incurred for training necessary to maintain the job;
• for costs related to working in Sweden. SEK 5,000 in reimbursement can be obtained. As proof, you must provide:
  • receipts;
  • invoices
  • receipts;
• for costs related to the purchase of protective clothing needed for work. The purchase of working clothes is not taken into account;
• for food. This applies to temporary employees of Swedish companies;
• for interest on consumer loans and mortgages. This applies to employees of Swedish companies who have taken out the loan in question;
• for costs incurred as a result of running a dual holding (Dubbelbosättning). The deduction covers all employees and owners of Swedish companies who are able to produce the relevant documents proving that they are running a second holding at their place of residence. The deduction can be obtained:
  • for one year - when a single person is able to prove that their family wants to move to Sweden;
  • for 3 years - applies to informal and formal unions;
• for business travel expenses - traktamente - for the first 90 days, you are entitled to SEK 230 per day. After 90 days, the rate drops to SEK 69 per day;
• For income - Jobbskatteredukation;
• for time worked in Sweden - Grundavdrag - applies to persons who have 90% of their income earned in the Kingdom of Sweden or have worked in the Kingdom of Sweden for a full year;
• due to payment of social insurance contributions in Poland.

1. Who is obliged to file an annual tax return in Sweden?
   All Swedish employees and entrepreneurs, except temporary employees.
   
   
2. Where should the annual tax return be filed?
   Employees and owners of Swedish companies should submit their tax returns to the Swedish tax office - Skatteverket - either in person or via skatteverket.se.
   
   
3. How much is the Swedish municipality tax, and who pays it?
   The municipal tax rate is on average between 29 and 34%. The obligation is on all Swedish tax residents.
   
   
4. How much is the state tax in Sweden?
   In Sweden, the percentage tax rate is equal to:
   • at annual incomes greater than SEK 490 700 - 20%;
   • with an annual income higher than SEK 689 300 - 25%.
   
   
5. How long is the tax year in Sweden?
   The tax year in Sweden coincides with the calendar year. This means that it lasts for 12 months, from January to December. An exception is made for certain Swedish companies.
   
   
6. Who is entitled to tax relief in Sweden?
   All Swedish tax residents residing in Sweden for more than 6 months and earning 90% of their income in Sweden are entitled to tax reliefs.
   
   
7. What documents are needed for the annual tax return in Sweden?
   
   • INKOMSTDEKLARATION 1 - tax return sent by the tax office;
   • E101/A1 - document confirming the place of payment of insurance premiums;
   • KU-10 or KU-13 - a list of income received during the previous tax year, which is provided to employees by the employer;
   • KU-14 - applies to recipients of a Swedish pension;
   • photocopy of payslips;
   • a photocopy of the employment contract;
   • photocopy of identity card;
   • documents proving entitlement to the reliefs you wish to deduct.
   
   
8. How long does one wait in Sweden for a tax decision?
   The tax office has 6 months to give a decision.
   
   
9. How do I get my tax refund from the Swedish tax office?
   The Skatteverket will transfer the granted tax refund to a pre-designated bank account in SWIFT or IBAN format.
   
   
10. Glossary:
    Bolagsverket - Swedish Companies Registration Office - all legal entities that want to protect their name should register with it;
    Arbetslöshetskassor or a-kassor - Swedish unemployment fund;
    SINK - statlig inkomstskatt för utomlands bosatta - a tax at a rate of 25 per cent on income for persons living in the country for less than 183 days. These persons are so-called non-residents and have limited tax liability and therefore do not have to submit an annual tax return to the Swedish tax office;

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