Sweden

Introduction of the concept of 'economic employer'

The Swedish government implemented the concept of ‘economic employer’ into Swedish tax law as of 1 January 2021. Previously, Sweden applied a more formal employer concept.

The new concept particularly applies when interpreting the so-called ‘183-days rule’ in tax treaties where Sweden is a contracting state. The regulations will, however, not impact employees working in Sweden for a maximum of 15 days in a row or 45 days in total during a calendar year. 

New rules on mandatory tax withholding

In addition to the introduction of the economic employer concept, new rules on on tax withholding for work performed in Sweden were introduced from 1 January 2021.

A withholding tax (WHT) obligation now applies for Swedish payers when making payments to a foreign company, or to a non-resident person, for work carried out in Sweden, unless the recipient of the payment is approved for F-tax (an F-tax certificate signifies that you are an entrepreneur who is responsible for paying your own taxes and contributions).