Proposal of a definition of “permanent stay” 

Current definition of “permanent stay” 

An individual can be considered a Swedish tax resident based on three different criteria’: i) having her/his real home in Sweden ii) staying permanently in Sweden or iii) having essential ties to Sweden. Being considered a Swedish tax resident implies that the individual is tax liable for worldwide income in Sweden. 

There is no definition in Swedish law of what constitutes a permanent stay in Sweden. Instead, it is assessed through the legislative history and case law. As the case law depends on each case’s specific circumstances, e.g., the duration and frequency of the stays as well as potential interruptions abroad, there is a difficulty in finding generally applicable thresholds but also to make an assessment even in cases where the circumstances are clear. 

A general interpretation is that an individual who regularly stay overnight in Sweden for a period of six consecutive months is considered staying permanently in Sweden. Interruptions abroad should not break the stay in Sweden if considered temporarily and is therefore included when calculating the total time spent in Sweden. The actual number of days spent in Sweden can therefore vary significantly without affecting the assessment that the stay is permanent. An individual can be considered a Swedish tax resident even if the days in Sweden are fewer than the days abroad. When assessing the permanent stay, the period assessed is a rolling twelve month-period. 

Case law 

A consecutive stay in Sweden of six months or more constitutes a permanent stay and a period outside of Sweden of six months or more will interrupt a previous permanent stay. Daily commuting to Sweden without overnight stays does not qualify as permanent irrespective of how many days spent in Sweden. What makes the assessment complex and difficult is when there are interruptions of overnight stays in Sweden.  

In 2019 the Supreme Administrative Court ruled that approximately 127 days including overnight stays spent as three months during summer, three weeks during easter and additional two weeks spent irregularly during a year did not constitute a permanent stay, even though recurring. In November 2023, the Administrative Court of Appeal in Sweden passed a judgment stating that 79 overnight stays in Sweden with a weekly frequency across the full year constituted a permanent stay in Sweden. These two rulings illustrate the complexity of assessing the permanent stay and the importance of not only the number of overnight stays but also the frequency and reoccurrence of the overnight stays. 

Proposed definition of “permanent stay”

The proposal suggests that over-night stays in Sweden exceeding 160 days in a calendar year should constitute a permanent stay, or overnight stays in Sweden exceeding 120, if the number of overnight stays in Sweden exceeded 120 also in the previous calendar year. 

The stay should then be seen as permanent as of the first day of stay in Sweden to the last day of stay in Sweden during the applicable income year. Hence, to break Swedish tax residency, an individual cannot return to Sweden later the same calendar year (spending nights in Sweden) as the period up until the last day in Sweden would then be considered for the Swedish tax residency period. Should an individual have fulfilled the criteria’ several years in a row, the stay in Sweden should be considered permanent as of the first day in Sweden the first year to the last day in Sweden the last year. 

The proposal would therefore also require that the previous year’s stays in Sweden is reviewed. E.g., an individual staying 121 days in Sweden both calendar year 1 and 2 would per the proposal only trigger Swedish tax residency the second calendar year (from first day of stay year 2 to the last day of stay year 2). However, an individual staying 161 days in Sweden calendar year 1 and 121 days in calendar year 2 would trigger Swedish tax residency both years from the first day of stay in year 1 to the last day of stay in year 2.  

When calculating the days spent in Sweden, the suggestion is to consider the calendar year, this in comparison with today’s twelve month-period where a new period for calculation can begin with each new day. The main reason is to facilitate the assessment and foreseeability for the taxpayer as the calendar year is the same as the income year. When determining the threshold of days, the Swedish Tax Agency has found it defensible to have a lower limit than the 183 days that are normally applied in tax treaties, this as the assessment is suggested to be made on a calendar year basis but also as it is only the actual days spent in Sweden that should be calculated (and not days of temporarily interruptions abroad). 

The requirement that the stay is an overnight stay for a permanent stay to occur should remain and hence the new legislation should not affect individuals commuting to Sweden daily not spending the night in Sweden. The reason for staying in Sweden should not impact the assessment (same as with current rules).

Entry into force and transitional provisions

The new legislation is proposed to enter into force on 1st of January 2025 and should not be applied to assessments prior this date. An individual permanently staying in Sweden in 2025 should therefore be considered staying here as of the first day of stay in Sweden unless the stay was already permanent before 2025, then the stay should be permanent as of 1st of January 2025. Even though the proposed new legislation should not affect the assessment of 2024, the stays in 2024 should be taken into consideration when applying the supplementary rule for 2025. Should an individual have stayed in Sweden for more than 120 days in Sweden during 2024, 121 days in 2025 should therefore be sufficient to trigger a permanent stay for 2025. 

Deloitte comments

There is a clear need for a distinct and simple definition to determine when physical presence in Sweden trigger Swedish tax residency, and the proposal of a set definition is therefore welcome from many perspectives. It is not practically possible to apply a set threshold of overnight stays by codifying the relevant case law. As such we believe, the proposition on overnight thresholds per calendar year set by the Swedish Tax Agency to be fair, relevant, and easy to implement. 

In comparison with the current legislation and applicable case law, only actual stays in Sweden should be considered eliminating the periods of interruptions abroad. Having a set threshold of days to consider will bring foreseeability for the taxpayer and the employer but also the authorities involved. 

One important impact if shifting from current rolling twelve-month assessment to the proposed calendar year assessment is in relation to people living in Sweden that intends to emigrate or repatriate from Sweden. If you have spent 120/160 overnights or more in Sweden during calendar year of exit you must not have any additional overnights in Sweden in that calendar year post exit in order not to extend your Swedish tax residency beyond point of exit.  

Overall, implementing a set definition of what constitutes a permanent stay is welcome. It would ease the understanding and foreseeability in relation to both previous tax residents in exile and in relation to non-tax residents having occasional stays in Sweden. Deloitte will monitor the next steps in the legislative process carefully. Please contact us for assistance or if you have any questions about the proposed changes.  

Contact us

Alexander Strandberg
Partner | Deloitte AB 
astrandberg@deloitte.se 
+46 76 827 73 41

Cecilia Vegelius
Assistant Manager | Deloitte AB 
cvegelius@deloitte.se
+46 70 080 41 64