Reduced compensation level to obtain Swedish expert tax relief from January 1 2025

Overview

The Swedish Government has announced that the salary requirement for tax relief for foreign experts, researchers, and key personnel is reduced from two price base amounts to one and a half price base amount. This will result in a reduced monthly salary requirement from SEK 114 601 in 2024 to SEK 88 201 for 2025.

The legislative amendments will enter into force on January 1, 2025, and will be applicable for work performed in Sweden that started on or after January 1, 2025. 

Background

A tax relief for foreign experts, researchers and similar key personnel in Sweden is granted to facilitate the recruitment of these professional groups provided that they meet certain qualifications or receive a monthly remuneration that exceeds the threshold, SEK 88 201 for 2025.

For individuals benefiting from the tax relief, 25 percent of the employment income is exempt from taxation in Sweden. In addition, certain benefits and reimbursements for expenses associated with the stay in Sweden are also tax free. The income exempted from taxation is in addition not basis for Swedish social security charges. Consequently, the expert tax rules are generally beneficial for both the employee and the employer. Today's legislation allows tax relief for the individual’s first seven years of work in Sweden. 

Reasons for reducing the remunerational requirement 

The purpose of the new legislation is to simplify for Swedish companies to recruit foreign experts. The rules aim to strengthen Sweden's international competitiveness, attract international talent, and increase the incentive for international companies to choose Sweden for new establishments and to locate group-leading functions in Sweden.

According to the Swedish Government, the high inflation of recent years has caused the remunerational requirement to increase faster than the salaries, as it is connected the price base amount. Further, other EU countries’ remunerational requirements for tax relief regimes like the Swedish regime, has a lower remunerational requirement and therefore, a reduction of the remunerational requirement is considered justified to continue being competitive on the international employee market. 

Deloitte comments

Deloitte consider the new the legislation regarding expert tax relief to be welcome, and it will now apply to more individuals coming to Sweden. We foresee that the personnel qualifying for the tax relief would increase, both in general and by having additional professions becoming eligible for the tax relief. We also anticipate professions which previously qualified based on the competence requirement might now be able to qualify based on the remuneration requirement allowing for greater foreseeability when recruiting foreign talent. We expect this to be positive for the tax relief process on all parts as the remuneration requirement does not require a formal assessment of the employee’s competence.

As the legislation is to be implemented as of January 1, 2025, it can be of great value for employers to review any planned assignments or employments to Sweden for income year 2025 to evaluate if employees will be comprised by the reduced remunerational requirement. It should be noted that the deadline to apply for expert tax relief is three months from the start of work in Sweden. The review of employees that may qualify should therefore be made at an early stage in the recruitment process. 

For those who are more interested in the background and further details about the decision can read more in our previous article “Proposal for a reduced remunerational requirement to be granted expert tax relief”. 

Contact us

Alexander Strandberg
Partner, Global Employer Services
+46 76 827 73 41
astrandberg@deloitte.se

Anna Börling 
Manager, Global Employer Services
+46 70 080 44 32
aborling@deloitte.se

Isabella Bark
Associate, Global Employer Services
+46 70 080 27 26 
ibark@deloitte.se