Swedish Taxation of U.S. Social Security

Relocating from America to Sweden has become increasingly common, especially for U.S. retirees. Many of these individuals are attracted by Sweden's high quality of life, with a great public health care system, affordable housing, and its unique Scandinavian culture. But moving from America, being a U.S. citizen, is not that straightforward. In this article, we will cover how U.S. Social Security is treated for tax purposes for Americans living in Sweden.

Does Sweden want to tax U.S. Social Security?

Sweden has a tax claim that covers its tax residents' global income. This means that Sweden wants to tax American Social Security payments received by a Swedish tax resident.

This type of income is classified as "ordinary income" ("inkomst av tjänst") for tax purposes, which means that Swedish progressive tax rates (up to approx. 55%) apply to the income, according to the following (applying for 2025):

Income (SEK)	Municipal Tax Rate	State Tax Rate	Total Tax Rate
0 - 625 800 SEK	28,98 % to 35,3 % (depending on Municipality of Residence)	0 %	28,98 % to 35,3 % (depending on Municipality of Residence)
>625 800 SEK	28,98 % to 35,3 % (depending on Municipality of Residence)	20 %	48,98 % to 55,3 % (depending on Municipality of Residence)

It shall be duly regarded, however, that tax treaties, such as the Swedish-American tax treaty, can limit Sweden's right of taxation, since tax treaties override Sweden's domestic legal provisions.

What tax rates apply to U.S. Social Security?

As mentioned above, a Swedish tax resident would be subject to progressive rates on American Social Security. Depending on the total taxable income of that person, the rate would vary from approx. 20% to 55%. Another factor that plays a role here is in which municipality the person is registered as resident, since the municipal tax varies between different municipalities in Sweden.

What impact does the Swedish-American tax treaty have on U.S. Social Security?

As said above, the Swedish-American tax treaty can have a big effect on Sweden's right to tax U.S. Social Security. In more detail, the tax treaty contains an article that specifically deals with pension income, which includes U.S. Social Security.

This article stipulates that American Social Security cannot be taxed by Sweden, in most situations, even if the recipient of this income lives permanently in Sweden. The effect has to be claimed in the Swedish Tax Return, which there is no special form for. Instead, a tax lawyer should prepare a written appendix to the Tax Return, in which the claim is brought forward and argumented for. Also - often proper documentation must be attached, for a tax treaty application claim to be successful.

Do I risk becoming subject to double taxation?

Since America also has a tax claim on U.S. Social Security payments to a U.S. citizen, the tax treaty has to be applied to prevent double taxation (taxation of the same income by both Sweden and America). In most cases, the application would imply that only America is allowed to tax the U.S. Social Security. However, this must be analyzed in each case, since there are a multitude of factors affecting the application of a tax treaty, such as the individual's ties to Sweden and America, whether the person has access to a permanent home in any of the countries, and whether the person in question is a U.S. citizen or not.

At nomadtax, many of our clients are U.S. expats living in Sweden. We are able to assist this group with all tax-related questions that could arise, ensuring that no unnecessary taxes are paid, while at the same time the individual stays fully compliant with Swedish tax laws.