Sweden

Social security contributions

Employers pay Swedish employer social security contributions on compensation paid to employees who are covered by the Swedish social security system.

Social security contributions are levied at 31.42% of the total taxable remuneration (no cap) in cash and in kind paid by a Swedish employer or a foreign employer with a PE in Sweden. Foreign employers who do not have a PE in Sweden must register for the payment of social security contributions or may enter into an agreement with the employee that the employee pays and reports the contributions on a monthly basis. Different rates apply depending on which solution is used.

A pension fee of 7% of gross earned income, up to SEK 599,250 (i.e. a maximum fee of SEK 41,948), is payable by the employee, but the fee is normally fully tax creditable on the employee’s tax return (i.e. the effective cost for the employee is normally nil).

Consumption taxes

Value-added tax (VAT)

The Swedish VAT system is harmonised with the European Union (EU) rules. The general VAT rate of 25% is chargeable on most goods and services. Reduced rates apply to a few goods and services, such as foodstuffs, restaurant meals, and non or low alcoholic drinks (12%), as well as to transport of passengers (6%). Certain financial and insurance services are exempt from VAT.

Net wealth/worth taxes

The Swedish wealth tax was abolished as of 1 January 2007.

Inheritance, estate, and gift taxes

There are no inheritance, estate, or gift taxes in Sweden.

Property fee

Property fee is paid by the registered owner of the real property as of 1 January each year. The fee rate is a maximum of SEK 9,287 or 0.75% of the taxable value of the real estate for houses and for block of flats. The real estate fee is not payable on real estate situated abroad.

Special wage tax on pension premiums

Swedish employers and non-Swedish employers with a PE in Sweden pay special wage tax of 24.26% on pension costs relating to tax qualified company pension plans.