Tax Breaks for Expats

Sweden has a relativly high private marginal tax rate, which can be an impediment to Sweden´s attractiveness on the labor market, but the personal income taxes has decreased somewhat during recent years.

An employer in Sweden pays more than 30% of an employee´s gross salary in social cost and the employee supports on average 30% of their gross salary in income tax, which brings the taxation of a regular income to about 60%. The higher income categories are hit with an additional income tax of up to 20% of the annual income that exceeds a certain threshold.

In order to leverage this high level of taxation and encourage foreign experts to take assignments in Sweden, several tax breaks are made available to expatriates.

Expert Tax Relief		SINK Tax
Foreign key personal may, under certain circumstances, qualify for special tax relief when working in Sweden. These experts include executives, scientists, researchers, technicians and other specialists. If the tax relief is granted, a 25% reduction of the taxable income…		The SINK tax allows the employer to deduct 25% as withholding tax of the taxable income of the employee, instead of the average 30%. The employee avoids having to submit a tax return in Sweden
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