About tax relief
Foreign citizens carrying out particularly qualified tasks or receiving a monthly remuneration above a certain level may enjoy tax relief on their Swedish earned income. Tax relief means that 25 per cent of the income is exempt from tax.
First and foremost, a positive decision from The Taxation of Research Workers Board is necessary to enable The Swedish Tax Agency to apply tax relief when taxing earned income.
Provisions on tax relief for foreign employees are found in Chapter 11 Sections 22—23 a of the Swedish Income Tax Act (1999:1229). An employee is eligible for tax relief if he or she is considered to be an "expert", a "researcher" or "other key person" within the meaning of the law. Further, an employee with a monthly remuneration above a certain level is also eligible for relief. In that case qualifications or tasks are of no importance. Read more at: Conditions for tax relief.
What is the rate of the tax relief?
Tax relief means that 25 per cent of your salary and similar revenues is exempt from income tax. The remaining part is taxed at the regular rate.
If your employer bears certain costs, this benefit is totally exempt from tax. This applies to expenses for:
- moving to and from Sweden
- two holiday trips per year to your home country together with your family
- your children's school fees for compulsory school and upper secondary school or comparable education.
If you are covered by Swedish social insurance during your stay in Sweden, the basis for the social security contribution fee that your employer pays are affected by the tax relief. The basis for the fees is consequently limited to 75 per cent of the remuneration. In other words, employer fees are not paid on the 25 per cent of your salary that is tax exempt, nor on expenses borne by your employer.
Tax relief is only valid for remuneration from the employer shown on the grant. Therefore, if you change employer, you need to submit a new application.
The Taxation of Research Workers Board cannot answer questions regarding for example what costs are borne by your employer as this is a purely contractual matter between you two.
All issues concerning the application of the grant should be directed to the Swedish Tax Agency.
How long is tax relief applicable?
Tax relief applies for five* years from the start of your stay in Sweden. Consequently, the time when your started working here is immaterial to the period of validity of the decision.
In applying the decision, the Swedish Tax Agency decides the precise period of validity in accordance with the facts of the case.
Let's take an example.
It is indicated in the application form that the employee enters Sweden and starts working here 15 November 2021. On the basis of this information tax relief would have been applied 15 November 2021–14 November 2026. However, plans changed and the employee arrived here and started working only on 1 January 2022. Tax relief applies 1 January 2022–31 December 2026 independently of the data provided in the form.
Furthermore, if your employment here is extended compared to what you stated in your application for tax relief, you do not have to apply for a new decision. The decision that you have got is still valid for remuneration paid out by the employer stated in the decision as long as its period of validity runs.
* However, the period of validity remains three years in the following situations:
- Your stay in Sweden began before 1 June 2020.
- Your stay in Sweden began after 31 May 2020, you have received a decision on tax relief which states that it is valid for three years and you have not received a specific decision extending the period of validity to five years. The possibility to apply for an extension was available until 31 March 2021.