A new year always brings with it new legal changes in Sweden. While we cannot cover all the changes that are made every year to, for example, the underlying calculations affecting taxes and benefits, nor provide in-depth information for each of our client’s specific industries, we have here summarized some of the more notable legislative changes that will come into effect.

Increased Maximum Duration for Expert Tax Relief

Sweden has for many years had a process through which foreign guest worker or their permanently established Swedish employers can apply for so-called expert tax relief on the grounds of the employee being either an internationally acclaimed expert in their area or earning above a certain annually updated threshold (minimum SEK 114 601 per month as of 2024). If an expert tax relief is granted, 25% of the employee’s income would be free from all Swedish taxes and employer social fees, and the program also allows certain benefits to be provided tax-free.

Through a legislative change that takes effect on January 1st, 2024, the maximum duration of such an expert tax relief is extended from five years to seven years. Through a special application filed with the Taxation of Research Workers Board (Swe. “Forskarskattenämnden”), the new seven-year duration can also be applied to any previously granted expert tax relief, as long as the employee benefiting from the tax relief first arrived in Sweden after March 31st, 2023. To be accepted, such an application must reach the Taxation of Taxation of Research Workers Board no later than March 31st, 2024. The original application for expert tax relief must, furthermore, always have been filed within three months of the employee arriving in Sweden.

Additional Information Requirements for Employees Without Tax Registrations

The Swedish Tax Authority has updated its policies for what information is to be required when submitting an employer tax declaration relating to an employee who lacks a Swedish tax identity number (e.g. does not have either a person number or coordination number). If a Swedish payroll for such an individual is to be declared, the employer or their payroll representative must now include the individual´s place of birth, country of birth and citizenship. Each of these locations should be reported by stating the relevant two-letter country code. These requirements will affect all such employer declarations generated after the start of 2024.

New Tax on Companies in Large Company Groups

From January 1st, 2024, Sweden is implementing EU directive 2022/2523. Sweden will, thereby, be able to take out a specially calculated additional corporate tax on subsidiaries of company groups where the total global revenue exceeds 750 million Euros. The stated goal of this new EU tax regime is to ensure that such company groups global profits, as calculated by a newly introduced set of principles, are to be subject to a minimum tax rate of 15%.

Changes to Personal Income Taxation

From January 1st, 2024, the income taxes for individuals who earn a low to mid-level income by working as employees or being self-employed will be decreased through an increase in one of the basic tax deductions. Such deductions are already included in the tax tables which the Swedish Tax Authority has published for the year.

Working individuals earning around SEK 35 000 per month before taxes will draw the maximum benefit of this change, increasing their monthly net retention by about SEK 230. Similar deductions previously introduced will, furthermore, now be index-adjusted for inflation. This will increase the net retention for an individual earning SEK 35 000 per month by an additional SEK 180, but the indexation will also provide a progressively larger decrease in the income tax of individuals with higher salaries up to the salary level of SEK 64 654 per month where the basic deduction for a working income slowly decreases with increased income. At the same time, the threshold for what incomes are subject to the 20% national tax taken out from higher earners will remain at its 2023 level of SEK 598 500 per year (e.g., SEK 49 875 per month) instead of being index-adjusted for inflation, which will cause a larger portion of a high-earners salary to be taxed at a higher rate than what would otherwise be the case.

Individuals who, at the start of the year 2024, are already 66 years of age or older benefit from a separate deduction intended to ensure they are taxed at about the same rate as working taxpayers and can also benefit from even more generous tax deductions if they continue working. Individuals below the age of 66 whose sole income consists of some sort of benefits do not, however, receive any such tax deductions.

Increased Social Fee Deduction for R&D Staff

Sweden has a preexisting system for allowing deductions to be made from employer social fees if the employees in question are engaged in systematic, qualified, and commercial research and development, though said definitions are applied in a restrictive manner. The standard cost savings in such a case would typically correspond to 11.83% of the salary. Previously, no individual company or company group was allowed to discount more than SEK 1.5 million in social fees per calendar month in this manner. From January 1st, 2024, this limit will, however, be increased to SEK 3 million per calendar month.

Changed Taxes on Consumption

A number of taxes or restrictions on consumption goods are lowered, modified, or removed, in some cases, to lower the cost-of-living increases brought about by inflation. The tax on petrol will be lowered by SEK 0.75 per liter. The tax on diesel will technically be raised somewhat compared with 2023’s level, but the increase is smaller than what had been previously scheduled, and the mandatory proportion of biofuels added will be lowered. The government hopes this will help decrease the price of diesel by up to SEK 5.50 per liter. The SEK 3.00 tax on standard shopping bags will be completely discontinued, but only from November 1st, 2024.

The taxes on alcohol will, on the other hand, be increased by about 8 percentile units on beer and wine and about 1 percentile unit on spirits, calculated on the price of the product. The tax on tobacco will, in the same manner, be increased by about 1 percentile unit. These increases will be calculated on each products before-tax retail price and variations will occur depending on the product type.

The Social Fee Discount for Employing Young People is Discontinued

From January 1st, 2024, the employer social fees for employing individuals aged between 15 and 18 years in positions earning less than SEK 25 000 will be raised from 10.21% to the standard 31.42%. This is a discontinuation of a previous social fee discount.

Digital Meetings Allowed in Swedish Limited Companies

From January 1st, 2024, it will be possible for Sweden-registered limited companies and certain other entities to change their articles of association to allow digital shareholder meetings. Without such a change, a limited company technically has to hold annual shareholder meetings where the shareholders or their representatives are physically present.

Measures to Curtail Organized Crime and Illegal Immigration

From January 1st, 2024, the Swedish police will have the authority to search foreigners found in Sweden for their identity papers in an effort to ascertain their identity and residency status. Such measures should, however, generally be avoidable if an expat carries their passport and any applicable residency permit or visa on them at all times and present them upon request. Most categories of non-Swedish citizens are already required by law to have a passport they can present upon request.

In an effort to curtail organized crime there is also legislation pending which, if adopted, would allow certain geographic areas to be temporarily designated as so-called inspection zones starting on March 1st, 2024. In such an inspection zone, the police would have the right to search individuals without any cause other than said area designation. There also exists a legislative proposal to bar individuals with a criminal record from entering certain public places, which in turn may result in a larger number of identity controls carried out by the Swedish police, which may take effect on February 1st, 2024.

Traffic Insurance Required for Electric Scooters

From December 23rd, 2023, most categories of electric scooters will be required to have traffic insurance taken out by their legal owner.

Decreases in Certain Employment Subsidies

The preexisting system for governmental subsidies for employing individuals who have previously been supported by certain benefits is reset to the lower benefit levels that were in effect before the COVID-19 pandemic, though the exact benefit depends on the circumstances of the employee. The previous subsidies for providing certain categories of workers with their first job experience are furthermore restricted.

Mandatory Registration of Foreign Direct Investment in Strategic Assets

Starting on December 1st, 2023, certain types of foreign direct investment in critical Swedish infrastructure, assets and/or research and development must be reported to the Swedish Inspectorate of Strategic Products (Swe. “Inspektionen för strategiska produkter”). Said authority can offer further guidance regarding what will be required for a specific transaction.