Tax Guide for Expats in Sweden (2026)
- Felix Schöttle
- 19 hours ago
- 9 min read
At nomadtax, we won’t deny that Swedish winters can be long and dark. When it comes to taxation, however, Sweden is often misunderstood. In this article, we provide a detailed overview of how Swedish taxation typically applies to expats who live and work in Sweden, and which tax aspects are particularly important to consider before making the move.
Swedish Tax Residency Rules for Expats
How do you become tax resident in Sweden?
Under Swedish domestic tax law, you can become tax resident in Sweden on three main grounds:
Permanent residence in Sweden
Habitual abode in Sweden
Essential ties to Sweden (for previous Swedish residents who have moved abroad)
Each ground is independent. This means that Swedish tax residency may arise even if only one of the grounds is fulfilled.
Permanent residence in Sweden (the “12-month” concept)
A person who moves to Sweden with the intention of staying on a long-term basis is normally considered to be permanently resident in Sweden. In practice, an intended stay of more than twelve months is often sufficient for permanent residence to be deemed to exist.
Once permanent residence is established, the individual is regarded as tax resident in Sweden from the start of the stay. The assessment is based on the individual’s intention and actual circumstances, rather than on a strict day count.
Habitual abode in Sweden (there is no simple “183-day rule”)
Unlike many countries, Sweden does not apply a straightforward statutory “183 days in a calendar year” rule for people who do not intend to settle permanently.
Instead, tax residency can arise based on your pattern of presence in Sweden, developed through Swedish administrative case law. In practice:
If you move to Sweden and stay continuously, you will often be treated as tax resident after roughly six months of presence.
Importantly, the tax residency status is typically considered to apply from the first day of your stay, not from day 181 or after month six.
If you commute, travel frequently, or have an irregular pattern of stays, the analysis becomes more complex and usually requires a tailored assessment.
Importantly, once tax residency is deemed to exist, it generally applies from the first day of stay, not from the six-month mark.
Essential ties to Sweden
The concept of essential ties primarily applies to individuals who have previously been resident in Sweden and later moved abroad. It involves an overall assessment of remaining connections to Sweden, such as housing, family, economic interests and social ties.
Since this article focuses on inbound expats who have not previously lived in Sweden, this category is not discussed further here.
What happens if you become tax resident in Sweden?
If you become Swedish tax resident, Sweden will generally tax you on your worldwide income. You will also typically be required to file a Swedish annual tax return, in which you are obligated to properly disclose all your taxable income in a correct manner.
For expats, the practical challenge is often not the filing itself, but correctly:
classifying foreign income under Swedish rules, and
applying any relevant tax treaty relief.
What happens if you do not become tax resident in Sweden?
For expats who do not become tax resident in Sweden, there is still a Swedish tax claim on employment income received for work performed physically on Swedish territory. This tax is called the Swedish Non Resident (SINK) Tax.
Swedish Taxation of Salary Income (Employment Income)
Why Swedish salary taxation is perceived as high
Swedish employment income is taxed under a progressive system, meaning that the effective tax burden increases as income increases. Salary taxation consists primarily of municipal income tax and, above certain thresholds, state income tax.
Salary tax rates (2026 – overview)
The following rates apply for employment income recieved by Swedish tax residents, in 2026. This also covers benefits in kind received in an employment, such as paid housing, which is not unusual for expats to receive, at least for their first few months in Sweden after relocating here.
Annual Employment Income | Municipal Income Tax | State Income Tax | Total Tax |
0 - 643 000 SEK | 29 - 35 % | 0% | 29-35 % |
643 000 SEK and above | 29 - 35 % | 20 % | 49-55 % |
Personal allowance, municipal rate, and church tax
All Swedish tax residents are entitled to a personal allowance, the size of which depends on income level and certain individual factors. Municipal income tax rates vary depending on where the individual is registered as resident. For 2026, the average municipal tax rate is 32,38 %.
In addition, church tax of 1 % may apply if the individual is a member of the Church of Sweden or another registered religious community that levies such a tax.
Deductions and tax free benefits: limited in general, but expats may have special items
Sweden generally has fewer deductions than many other jurisdictions. However, expats may in some cases access deductions such as:
certain home travel costs (often subject to EU/EEA-related conditions and other limitations),
certain costs for maintaining housing abroad, and/or
increased living costs in qualifying situations.
These rules are fact-dependent and need careful handling.
Swedish tax law do also provide benefits to be deemed tax exempt, such as the employer's cost for providing an employee with a gym membership, or other sport- or rehabilitationrelated expenses. Please note that there is a cap applying to this tax exemption, of 5 000 SEK per calendar year.
Lastly, for some expats taking up employment in a Swedish start up, employee stock options (ESOPs) can be received tax free, although the criteria applying for tax exemptions are rather strict.
The Swedish “expert tax regime” (a major opportunity for some expats)
Sweden has a special regime for qualifying inbound experts (often called the expert tax regime). In brief, it may allow:
25% of salary to be tax exempt for a limited period (often referenced as up to seven years, subject to meeting the requirements and filing correctly), and
a corresponding reduction in the salary base for employer-paid Swedish social security contributions, which can make the regime attractive for employers as well.
Timing and procedure matter. If you are moving to Sweden and believe you might qualify, it is typically important to plan and apply correctly and on time.
Swedish Taxation of Capital and Investment Income
General capital income tax rates
The following tax rates are applied to capital income (dividends, capital gains, interests) received by Swedish tax residents in 2026 in an ordinary Brokerage Account.
Income Type | Tax Rate |
Dividends from private companies | 25 % |
Dividends from publicly traded companies | 30 % |
Dividends from "closely held companies" | 20 - 55 % |
Closely held companies (the “3:12 rules”) — a common expat pitfall
One of the most important Swedish regimes for entrepreneurs is the closely held company framework (often referred to as the 3:12 rules).
In simplified terms, if you own a company and are active in it, Sweden will likely treat certain dividends/capital gains partly as employment income for tax purposes, leading to significantly higher effective taxation than the ordinary capital rate.
Key points:
Some dividends may be taxed at 20 % within a calculated annual allowance ("gränsbelopp"), that was increased for some individuals due to legislative changes that entered into force on 1 January 2026.
Above that allowance, taxation of dividends and capital gains is done with employment income tax rates (29-55 %), meaning that the income is put in the same basket as employment income for progressive reasons.
The rules are complex and can apply even when the company is non-Swedish, which can lead to unpleasant surprises for inbound expats.
In companies with 30 % or more non-active partners, the rules do not generally apply, meaning that ordinary capital income taxation (usually 25 %) would apply.
Even if your activity in the company stops, the 3:12 rules will apply for an additional four years after you stopped being active in the company.
Failing to declare foreign company ownership correctly in the Swedish tax return can also lead to serious issues, including penalties and surcharges, and in serious cases, criminal investigations.
ISK (Investment Savings Account) and endowment insurance
Sweden also has favorable investment/trading wrappers, most famously the ISK (investment savings account).
In simplified terms:
you do not pay capital gains tax on each sale or dividend/interest inside the account, and
instead you pay an annual tax (1,065 % for 2026) calculated on a notional base (linked to the account's average annual market value and a benchmark interest rate).
Since 2025, the first 150 000 SEK invested on a ISK, is entirely tax free.
For mobile expats, it is also important to consider whether another country could tax the same assets/income depending on your tax treaty residency position, meaning that a review must be done of in which country you have your residency in, according to an applicable tax treaty that Sweden is party to. An endowment insurance, ("Kapitalförsäkring"), is taxed similarly as the ISK, i.e. with a flat annual 1,065 % tax based on the average market value of the account/insurance. However, legally speaking, an endowment insurance policy holder is not formally the owner of the securities held therein, which can lead to problems of mismatching, since the risk is high that other countries than Sweden would tax the policy holder as the owner of the securities.
Real-estate linked income from abroad is subject to Swedish taxes
A surprise for some exapts moving to Sweden, is that Sweden wants to tax their income from real estate located abroad. For example, if a person moves to Sweden but keeps ownership of two properties in Italy, any rental income from these properties will be subject to Swedish taxes.
Under Swedish tax law, rental income can be taxed as:
Capital Income, with an applicable tax rate of 30 %, but where only standardized deductions are granted. To clarify, deductions witht the real costs for the rental, such as internet, garbage collection, and repairs, are not granted.
Business Income, with progressive tax rates (29-55 %) applying. In this case, deductions can be made, including depreciation.
A Capital Gain derived from selling real estate property located abroad is also covered by the Swedish tax claim on any person being deemed as a Swedish tax resident. This can be a uncomfortable surprise for exapts coming to Sweden.
Interest cost paid on a mortgage is always deductible under Swedish tax law.
Tax planning timing matters when moving to Sweden
For many expats that moves to Sweden, major tax outcomes depend on timing, such as:
whether assets are sold before or after becoming Swedish tax resident,
whether assets are held in the most suitable account type, and
whether ownership structures should be reviewed before arrival.
Another important factor is usually if the expat has achieved tax treaty residency in the optimal state. Sometimes, setting up a relocation in a way that ensures continued tax treaty residency status in the previous home state, at least for the initial period of living in Sweden, can lead to massive tax savings. This is espescially the case if real estate in the previous home state is sold subsequent to moving to Sweden.
Swedish Tax Return for Expats
Who must file, and when?
If you are tax resident in Sweden, you are required to file an annual Swedish tax return. The filing deadline is on the 4th of May 2026, for the tax year of 2025.
It is is sufficient that you are tax resident for just one day during the tax year in question, and you will be obligated to file a Swedish Tax Return as a consequence. This is important to keep in mind for expats moving to Sweden during the latter part of a calendar year. Often, this person would have to file a tax return covering the time from arriving in Sweden to the 31st of December.
You will generally receive a prefilled return from the Swedish Tax Agency with reported Swedish-source data (e.g., salary, bank interest), during February or March of 2026. If you have foreign-sourced income, it must be declared and handled correctly. Filing can be done online, or on paper form.
Foreign income, classification, and “open disclosure”
Foreign income often requires:
correct classification under Swedish rules,
possible application of a tax treaty, and
sometimes an open disclosure approach to reduce the risk of penalties if classification is not straightforward. This is done by a tax lawyer, drafting a legal appendix to your tax return. We always do this when preparing tax returns for our clients.
Where documentation is needed from foreign authorities or banks, planning ahead is important. It is also important to be able to produce sufficient evidence to e.g. claim tax treaty benefits.
Double Taxation Issues for Expats in Sweden
Why double taxation happens
Double taxation is unfortunately common in expat situations, especially where income, assets, or accounts remain abroad.
Tax treaties and foreign tax credits
Sweden has tax treaties with many countries. These treaties can:
allocate taxing rights between countries, and/or
In some cases, Swedish domestic foreign tax credit rules may also be relevant. Treaty analysis is often highly fact-specific.
Tax treaties can also affect planning
Depending on the treaty and the type of income, certain treaties may significantly impact the effective tax outcome - for example, in connection with selling real estate located outside Sweden. Often, we would use tax treaties for tax optimization purposes, i.e. to make sure that our client pay as little tax as possible, within the legal framework.
Conclusions: Is Sweden Really “That Bad” for Taxes?
Sweden has abolished several taxes that are common elsewhere, including:
wealth tax, and
inheritance and gift tax.
Combined with investment wrappers (such as the ISK and the endowment insurance), Sweden can be relatively attractive for individuals with substantial capital.
At the same time, employment income and business income can be taxed at high effective rates. A common way to summarize it is:
it can be relatively “easy to be wealthy” in Sweden,
but it can feel “harder to become wealthy” through salary alone.
Our Advice Before You Move to Sweden
If you are moving to Sweden for work, our strongest recommendation is to speak with a Swedish tax professional before arriving.
In many cases, proper planning can materially affect the outcome. For example:
timing of sales and transfers,
choice of investment wrappers,
structuring of foreign company ownership, and
potential eligibility for the expert tax regime.
If you would like help assessing your Swedish tax position before you relocate, you are welcome to contact us.