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 employee fees 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 the first three years of your temporary stay in Sweden. Which date you started working here does not affect the period of validity.
The exact applicable time is based on the actual circumstances and is set by the Swedish Tax Agency when applying the Board's decision.
Let's take an example.
On the application form you have indicated that you will arrive in Sweden on 1 February 2018. The work will start a week later and cease on 31 December 2022. Tax relief is granted. All things being equal, tax relief applies for the period from 1 February 2018 to 31 January 2021. However plans are changed and you arrive here and start working only on 15 june 2018. The work will cease in the beginning of 2023. Tax relief applies for the period from 15 June 2018 to 14 June 2021.