Sweden legal and accounting and tax considerations in 2023
Sweden accounting and tax
- Sweden corporate income tax is a standard 21.4%;
- In 2021, Sweden will reduce its corporate income tax rate to 20.6%;
- Swedish companies must submit annual tax returns, in line with their financial year;
Value Added Tax (VAT)
- The standard VAT rate is 25%.
- All companies must register for VAT once their company meets the minimum threshold of SEK30,000 (€2,847).
- VAT return filing obligations are determined by a company’s annual revenue:
- Revenue less than SEK1 million (€94,890): annual filing;
- Revenue between SEK1 million and SEK40 million (€3.79 million): quarterly filing;
- Revenue above SEK40 million: monthly filing.
- Reduced VAT rates of 12%, 6% and 0% may apply to certain products and services such as select foodstuffs, tourism services, qualifying medicines etc.
Tax Duties and Levies
- Stamp duty is levied at 4.25% on the transfer of real estate and mortgage loans;
- Property tax on Swedish real estate is levied annually at an average rate of 2%;
- Standard capital gains tax is 21.4%;
- Sweden imposes no withholding tax on interest payments and royalty payments;
- The standard dividend withholding tax rate is 30%.
- An LLC, PLC or Branch is required to appoint an auditor if it has met any two of the following criteria for two consecutive years: i) more than 3 employees ii) balance sheet total exceeding SEK1.5 million and iii) a net turnover of SEK3 million;
- Audited financial statements must be submitted to the Companies Registration Office. Healy Consultants Group PLC can assist our Client fulfil this statutory obligation for an annual fee of €2,300.
Other tax considerations
- Swedish resident companies are permitted to carry forward their business losses indefinitely;
- Sweden has signed double taxation treaties with 92 countries including Australia, Canada, China, Singapore and USA. A full list is here;
- Healy Consultants Group PLC can help Clients meet their accounting and tax obligations in Sweden. Our estimated accounting and tax fees for an active Swedish company are US$2,300, and US$950 for a dormant company.
Sweden legal and compliance
- Each Swedish LLC requires a minimum of two directors and one shareholder;
- The shareholders can be of any nationality. At least half of the board of directors must be resident in the EEA, or a registered agent will be required as a local representative of the company;
- The minimum initial share capital for incorporating an LLC will be SEK50,000 (€4,745) and SEK500,000 (€47,445) for a PLC. The entire amount must be fully paid up and a certificate of deposit must be presented during company registration.
- All employers are required to contribute 31.42% of the employee’s salary to the latter’s social security account, capped at SEK458,571 (€43,514). The employee must contribute 15.49% of their salary to the security account;
- All firms hiring more than 25 employees must appoint an economic committee, comprising 3 management representatives and 2 employee representatives;
- The Swedish Discrimination Act bars discrimination amongst employees on the basis of religion, ethnicity, sex, transgender identity or disability;
- The Working Hours Act sets the maximum weekly working hours at 40 and maximum annual overtime hours at 200;
- The Annual Leave Act provides employees the right to 5 weeks of annual holidays, of which the employee can take four weeks consecutively between June and August;
- The Work Environment Act provides for health and safety standards to be maintained at the work place.
- Although Sweden does not have any exchange controls, reporting requirements exist for all cross-border transactions higher than €16,300;
- Mergers between two or more companies require approval from the Competition Authority if i) the revenue of at least two merging companies exceeds €2 million and ii) aggregate annual revenue of the merging companies exceeds €10 million.