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The Supreme Administrative Court clarifies the terms applying in granting expert tax relief

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PwC-skatteradgivning-FormThe Supreme Administrative Court (HFD) has recently determined that an individual is not to be seen to meet the conditions required to be granted expert tax relief if his or hers monthly compensation is in excess of two price base amounts during only his or hers first two years of employment and not in subsequent years of employment.

Non-Swedish employees intending to work a maximum of five years in Sweden can, as an incentive to working in Sweden, apply for so-called expert tax relief during their first three years of employment in Sweden. A decision granting this tax status implies that 25 percent of the individual’s income is tax exempted and that the employer does not need to pay employers’ contributions on such income. In order to incur this tax status, there are a number of conditions that must be met and one of these is the requirement of specialist competence. The individual is, according to the law, to comprise an expert, researcher or other key individual in order that expert tax relief can be granted. With the aim of increasing predictability in this context, a so-called amount rule was introduced stipulating that the requirement of competence is always seen to be met when the individual’s salary and benefits are in excess of two price base amounts each month for the calendar year in which the employment is initiated.

In the case at hand, an individual had applied for expert tax relief based on fulfilling the required salary level during the first two years of his employment in Sweden. After this period, he would no longer incur that salary level. The individual was denied expert tax relief by the Taxation of Research Workers Board with regard to the fact that already at the beginning of his employment it was clear that he would not meet the salary level requirement after two years; his monthly compensation did not, therefore, meet the requirement for granting this tax status. The case was appealed to the administrative court and administrative court of appeal, and, in both cases, the individual was granted expert tax relief during the two first years of employment. The case was, in the end, appealed to the HFD by the Swedish Tax Agency.

The Agency claimed that the salary requirement needs to be met during the entire period of employment in Sweden for the tax status to apply, that is, the salary requirement is to be met during five years provided the individual intends to work in Sweden during five years (otherwise, the salary requirement is to apply during the period in which the individual is employed). The individual claimed, on the other hand, that the law only provides support for the interpretation that the monthly compensation is to be in excess of the stated amount in the calendar year in which the employment started and that he, thereby, should be granted expert tax relief during the first two years of employment in Sweden, that is, as long as the salary level is met.

HFD concluded, by way of introduction, that the law is formulated in an unclear manner and that, therefore, there is room for varying interpretations. However, the Court stated that the preparatory work states clearly that the intention was that the stipulated salary amount needs to be fulfilled during the entire period of employment and that the formulation of the law text aims at clarifying the price base amount to be applied in determining the required level of compensation. Consequently, HFD agree with the Tax Agency’s interpretation and determined that the rule stipulating a specific amount of income must be fulfilled during the entire period of employment, however no longer than during the three years for which expert tax relief can apply.


Through this decision, HFD has clarified that an individual must meet the salary requirement each month during the first three years of employment in order that expert tax relief can be granted. With the aim of ensuring that this tax status can be granted and, thereby, actually comprises an incentive for a foreign employee to work in Sweden, it is important to, at an early stage, investigate the possibilities of dividing up the intended amount of salary and benefits so that the required salary level is met each year during the employee’s first 36 months in Sweden.

Do you have any questions on individual taxation?

Gina Hedin

Gina Hedin

Gina Hedin arbetar med nationell och internationell personbeskattning på PwC:s kontor i Göteborg.
010-212 76 72
Gina Hedin works with national and international personal income taxation at PwC's office in Gothenburg.
+46 10-212 76 72

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