What is the change?
The changes in the legislation affected three different parts that regulate tax obligations for foreign companies that have personnel temporarily working in Sweden, as well as certain changes in the procedures for Swedish companies employing foreign companies. As a rule, this model has been used for employees from third countries hired through EU resident companies for up to 6 months.
Since 1 January 2021, the following changes have been made:
– The concept of economic employer is introduced. Swedish legal entities (Permanent Establishments of Foreign Companies) can be qualified as an economic employer for the purpose of withholding and paying taxes on the wages of foreign employees, if certain criteria are met;
– Foreign companies operating in Sweden (under a labour contract, for example) are required to register with SKV (Skatteverket) and provide certain information to assess their tax liabilities;
If the Swedish customer makes payments to foreign companies that do not have this registration, he will be obliged to withhold and pay 30% of the tax on the amount paid.
– Obligation to register foreign labour force with the Labour Protection Department.
What to do now?
Analyse the current situation and assess the liabilities arising from the performance of contract works, the rental of personnel in Sweden, and the secondment of employees to Sweden.
If necessary, complete the required registration steps either yourself or with the help of local qualified specialists
Information prepared on the basis of materials provided by Proffseconomics Sweden AB.
This publication is for general information purposes only and does not constitute professional advice. It should not be applied without obtaining independent advice based on specific facts. We are not responsible for any damage incurred as a result of applying the provisions of this manual.