Taxation & Payments
Everyone living in Sweden for one year or longer must be registered with the Tax Agency. Registering, or being folkbokförd, means that you are officially listed as a resident of Sweden and can pay taxes. You will receive a personal identity number (personnummer) and be eligible for a Swedish identity card (id-kort). In addition to registering when you first move to Sweden, you must keep the Tax Agency informed if you move within Sweden, marry or divorce, or move away from Sweden.
Your personal identity number is an official number used to identify you in official Swedish databases, similar to a social security number or civil registration number in other countries. If you are staying in Sweden for at least a year, you will receive a personal identity number; those staying for less than a year receive a co-ordination number.
The personal identity number (Swedish: personnummer) is the Swedish national identification number. When it was introduced in 1947 it was probably the first of its kind covering the total resident population of a country. Numbers are issued by the Swedish Tax Agency (Swedish: Skatteverket) as part of the population register (Swedish: Folkbokföring).
The number is used by authorities, by health care, schools and universities (both public-run and private). Also used by banks (needing it by law for tax purposes and mandatory customer identification) and insurance companies (needing it for car liability insurance and for medical travel insurance coordination).
Your personal identity number will be used in many day-to-day situations like collecting parcels or signing a tenancy agreement. It is quite common to be asked for your personal identity number, and in many instances it will be required. As such, it is important to register for your number as soon as you can after entering Sweden.
Registration takes place in person at your nearest Tax Agency office. Visit the Tax Agency’s website for details on what to bring and where to find your nearest office.
Family members that are non EU citizens must apply for a residence card at the Swedish Migration Agency.
Should the process time for your application take longer than promised, we recommend that you contact Solvit which is a network in all EU countries that free of charge can help you with problems connected to your EU rights. Another useful site is the National Board of Trade’s ”Without a personal identity number in Sweden”.
Remember: This number is unique to each individual, is based on your date of birth, and follows you throughout your life. It’s used for identification in many everyday situations so it’s a good idea to learn it by heart
Your personal identity number will be used in all official capacities as well as many day-to-day situations like collecting parcels or signing a tenancy agreement. It is quite common to be asked for your personal identity number, and in many instances it will be required. As such, it is important to register for your number as soon as you can after entering Sweden.
Registration takes place in person at your nearest Tax Agency office (Skattekontor). Visit the Tax Agency’s website (www.skatteverket.se) for details on what to bring and where to find your nearest office.
Registering with the authorities isn’t the most exciting part of your move, but it is certainly one of the most important. You’ll need to register with several different government offices in order to make sure your life in Sweden moves forward smoothly.
EU and Nordic citizens who work or have sufficient means to support themselves automatically have right of residence in Sweden and do not need to apply for a residence permit or register.
Swiss citizens must apply for a residence permit at the Migration Board within three months of arrival.
Non-EU citizens with a work or residence permit as well as Swiss citizens who have received their residence permit approval must visit the Migration Board (Migrationsverket) after arriving in Sweden to leave fingerprints and be photographed for a residence permit card. This should be done as soon as possible after you enter the country. More information can be found on the Immigration Board's website www.migrationsverket.se
People living and working in Sweden for less than 6 months can pay a special voluntary income tax of 25%, those who stay longer must follow the normal tax rules. Unless you’re an unusually complicated case regarding income tax, making your tax declaration in Sweden in generally very straightforward because everyone is taxed at the source. So when it comes to completing your tax return you basically just have to confirm the details which have been pre-prepared by the authorities according to the information provided by your personal identification number. You can confirm these details quickly and easily by telephone, internet, and even by SMS. It’s up to you to declare any investments you have that are liable to taxation by the Swedish authorities. In Sweden tax deductions do not take into account your marital status or whether or not you have children.
Income tax deduction includes social insurance contributions and comprises municipal tax, which varies between municipalities, but is 31% on average, and ate tax, which is only deducted on the part of your income which exceeds SEK 328,600 per annum. If your gross annual earnings are between SEK 328,600 and SEK 488,600 you’ll be taxed at a rate of 20%, if you earn more than SEK 488,600 the annual rate of tax is 25%. Once again you can consult www.skatteverket.se for more information about the Swedish tax system, for declaration forms and addresses for local offices.
The tax rates for individuals on employment income are relatively high compared to many other nations. The municipal tax (kommunalskatt) varies depending where you live (registered) – from 29% to 35%. In addition to this, a state tax of 20% and 25% is paid on income above certain amounts. For your information, the 2019 tax rates for the Gothenburg region are:
- Billdal %
- Brännö %
- Donsö %
- Gothenburg 32.60%
- Hjuvik %
- Nolvik %
- Olofstorp %
- Styrsö %
- Säve %
- Torslanda %
- Vrångö %
Very few deductions are allowed with regard to employment income, and even the ones that are permitted have limitations and complex criteria for them to be valid deductions.
The Swedish tax year follows the calendar year and all income received from 1 January to 31 December should be declared. For someone who is paid from a Swedish company, tax is withheld (Preliminärskatt) during the income year. The witholding from your salary is based on the estimated amount of tax you should pay. At the end of January or early February (the year following the income year), you should receive an annual statement of income (kontrolluppgift) from your employer indicating salary, benefits, and the amount of tax which has been withheld during the year.
Sweden is known for its technological innovation and payment is no exception. Many reports suggest that Sweden will become a cashless society in the next 15 years so navigating the payment systems here may be a bit different from those in your home country. We’ve compiled a list of advice and important tips when faced with everyday economic services and needs in Sweden as a newcomer.
Even though Sweden is part of the European Union, it retains its own currency called the Swedish Krona (SEK). Euros are accepted in some parts of Sweden at the discretion of local municipalities. Most of these towns can be found at the Finnish border and at the Danish border. Swedish Kronor are available in coins (1 kr, 2 kr, 5 kr, 10 kr) and bills (20 kr, 50 kr, 100 kr, 200 kr, 500 kr, 1000 kr).
Even though Swedish Kronor are the official currency of Sweden, many stores around the country do not accept cash payment methods.
Most transactions occur with debit cards, though credit cards are largely accepted as well. A majority of retailers will accept Visa, MasterCard, and American Express cards.
Personal checks or travelers checks are very rare in Sweden and most retailers will not consider these as acceptable forms of payment.
For services involving recurring bills or invoices, many companies will send you an electronic notice with the amount due, rather than directly withdrawing funds from your account. You must manually pay this from your bank account upon receipt of the services or goods. Examples of these services include online purchases and utility costs.
For transactions between individuals, most Swedes use a service called Swish. This is an app you can download on your mobile phone to instantly send money from your bank account to another account. This is ideal for many situations, including splitting the cost of dinner and buying items at yard sales or markets. Swish only works with Swedish bank accounts which can hinder recently arrived internationals from participating.
This is an electronic payment service that is similar for Swish, but it is ideal for small business transactions involving card payments. You may encounter this technology in a local shop or market, but it works similarly to card payment at other retailers.
The value-added tax in Sweden is called mervärdesomsättningsskatt (or in short more commonly “moms”) and is imposed on all products and services at a rate of 25%. The VAT is usually automatically included in the display price of items at stores and restaurants unlike sales tax added afterwards in other countries. Sometimes reduced VAT rates apply for certain situations. For example, the rate for foods and services (such as restaurants and hotels) is 12% and the rate for sales of publications, admissions tickets, and travel within Sweden is 6%.
BankID is a service connected to your Swedish bank account that allows you to sign documents, authorize transactions, and manage mobile banking. BankID also serves as an authentication program that can protect and secure your personal information and accounts. You can also use BankID to authorize foreign transactions and turn on/off your banking cards. It is an essential tool that most Swedes use in everyday life.
In order to open a bank account in Sweden, you normally need a personal identification number and often a Swedish identification card. You must have a Swedish bank account in order to receive income, use Swish, and use BankID.
If you are interested in transferring funds from your Swedish bank account to a family member’s account in your home country, there are a variety of services and tools available. By visiting www.moneyfromsweden.se, you can compare rates, delivery times, and methods of payment from the biggest companies and banks that offer international transfers.