The Swedish parliament has decided to adopt the bill on changed rules for taxation of temporary work in Sweden. This means that new rules regarding the implementation of an economic employer concept will become Swedish law from January 1st 2021.
Tax Matters has previously reported about the suggested change in Swedish tax law. The new rules regards taxation of non-residents. The changes entail that non-resident employees, hired by a Swedish company, will be taxed in Sweden if the work is for the benefit of a Swedish company or for the benefit a permanent establishment (PE) in Sweden. The new rules will apply regardless of whether the employee stays in Sweden for more or less than 183 days during a twelve month period. “Hired by” in this context covers employees who perform work in Sweden under the control and management of a Swedish company (or for a Swedish PE). There is one exception. If the work is carried out for a maximum of 15 consecutive days and the total workdays in Sweden does not exceed 45 days in a calendar year.
The Parliament also adopted legislative changes regarding obligatory tax withholding for companies without a PE in Sweden as well as additional obligations to withhold tax on payments to foreign companies without an F-tax registration in Sweden. Even if the company does not have a PE in Sweden, Swedish tax shall be withheld if/when the work is performed in Sweden.
The decision was expected as there have not been any opposition to the new rules. We suggest that foreign companies quickly adapt to the new rules and apply for relevant registrations in Sweden in order to be compliant with the new rules that will come into force on January 1st 2021.
Tax Matters will keep monitoring the implementation and development.
Johanna Glimmerbeck och Hanna Ekelund arbetar på PwCs: kontor i Örebro respektive Stockholm med individbeskattning och frågor i internationell kontext och är särskilt specialiserade kring arbetsgivarfrågor vid gränsöverskridande personal.
Johanna: 072-353 02 92, firstname.lastname@example.org
Hanna: 070-929 44 45, email@example.com