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SINK Tax in Sweden.

Are you going to work in Sweden for less than 6 months of the financial year? If so, you will be liable to pay taxes on your locally sourced income in Sweden under the Economic Employer Concept, if you meet one of the following criteria;

  • 15 continuous working days in Sweden
  • 45 working days total in Sweden throughout the calendar year

Although you will have a tax liability in Sweden, you can also benefit from SINK tax!

SINK tax is a special tax benefit for non-residents coming to work within Sweden for less than 6 months. With SINK tax applied, a tax deduction of 25% will be applied to your taxable earnings as opposed to the normal taxation rates (circa 30-34%).

SINK tax will typically be applied to your payroll by your employer leaving you with no ongoing administrative burden while receiving the benefit in your NET earnings. You also won’t have the requirement of completing a Swedish tax declaration at year-end.

Due to working less than 6 months in Sweden, you may be required to declare your Swedish income and taxes paid within your home country/global tax base. With dual taxation treaties in place between Sweden and many countries globally, the tax paid within Sweden will be credited off against the taxes you would have paid on the same income in your home country.

Although SINK tax is a great benefit.. please be warned!

If you work longer than 6 months within Sweden this benefit will be revoked and the underpayment of taxes for the first 6 months will be retroactively taxed under the normal regime causing a substantial tax liability.

Therefore, if you are unsure if the work in Sweden will be for 6 months or less, it is prudent to forgo SINK tax to ensure there are no nasty surprises.

Liberty Bishop (Sweden) Ltd, as a Swedish Umbrella Company (Temporary Employer), can apply for this benefit on your behalf under our hassle-free service, allowing you to concentrate on your work with peace of mind that all payroll, taxes and employment are handled for you compliantly.

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