QROPS Advice: Taxation of Expatriates Living in Sweden

The basis for taxation in Sweden is determined by an individual’s residential status. Swedish residents are taxed on their worldwide income and non-residents only on income arising from sources in Sweden.
Expatriates are considered resident in Sweden if they meet the following conditions:
􀂃 they are domiciled in Sweden, i.e. have a permanent home in Sweden, or
􀂃 they stay permanently in Sweden, i.e. stay continuously for more than 183 days in the country, or
􀂃 they are considered to have an essential connection with Sweden after leaving the country/moving abroad
When determining whether an individual has an essential connection with Sweden, all important ties with Sweden, both economic and social, are taken into consideration by the tax authorities.
Individuals who are Swedish nationals, or foreign nationals who have been resident in Sweden for a total of ten years, are deemed to be resident in Sweden until five years have elapsed from the date of moving out of Sweden, unless the person can prove that their essential connections with Sweden have been broken. After five years the burden of proof is reversed and the tax authorities have to prove that essential ties still exist between the individual and Sweden.
An individual who is considered resident in Sweden may, at the same time, be considered resident in another country under that country's domestic legislation (dual residence). If there is a tax treaty between that country and Sweden there are normally provisions in the treaty to determine in which country a person shall be considered resident in case of dual residence, or how double taxation is to be eliminated. Sweden has negotiated double taxation treaties with over 80 countries including all countries in the Nordic region.
Special rules on taxation apply to foreign experts and key personnel. According to these regulations, only 75% of the income earned is subject to income tax and social security charges during the first three years in Sweden. Some benefits, such as school fees and allowances for moving residence, are tax exempt. These regulations apply to foreign personnel employed by a Swedish company, or a foreign company with a permanent establishment in Sweden. The employment and residence in Sweden must be
limited in time, not exceeding five years, and the employee should not have been a resident in Sweden prior to the employment.
To qualify for this exemption it is necessary to obtain a ruling from the National Tax Board, which is part of the Swedish Tax Administration. The application must be filed within three months upon arrival.

http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Sweden_2009.pdf