When Sweden treats you as a tax resident

Sweden does not use the word "resident" in the way many Americans expect. The Swedish Tax Agency (Skatteverket) talks about unlimited and limited tax liability. Which one applies decides whether you are taxed on your worldwide income through an annual tax return or pay a flat final tax on Swedish pay. For an American moving to Sweden, the answer comes mainly from how long you stay and where you sleep. This guide explains the tests Skatteverket applies, using its own guidance for people who move to and work in Sweden.

The two kinds of tax liability

### Unlimited tax liability

You have unlimited tax liability if either applies:

• you are staying in Sweden on a permanent basis, meaning at least six consecutive months; or
• you have a significant connection to Sweden, meaning you lived there before and still have ties such as family, residential property or significant assets.

With unlimited liability you are taxed under the Swedish Income Tax Act. Skatteverket states that if you live in Sweden, all of your income is subject to taxation, including income from abroad.

### Limited tax liability

If neither test is met, you have limited tax liability and Swedish pay is taxed under SINK, the special income tax for non-residents.

The six-month test

### What counts as a stay

To be considered as staying in Sweden, you must sleep in Sweden. Skatteverket's example is a person who lives in Copenhagen and commutes daily to work in Malmö: because he does not sleep in Sweden, he is not staying there permanently and SINK applies to his pay.

### Six consecutive calendar months

A stay of six consecutive calendar months is a permanent stay. The period is counted without regard to the start of a new calendar year, so a stay from October to March qualifies.

### Temporary breaks

Time abroad can still count as part of your Swedish stay. If the period abroad is shorter than, or equal to, the stay in Sweden before or after it, it is treated as a temporary break. Skatteverket's example: three months in Sweden, two months abroad, then two months in Sweden counts as a permanent stay of seven months, although only five were spent in Sweden.

### Length of stay, not length of job

Skatteverket stresses that the length of your stay in Sweden, not the period of employment, decides whether your employer deducts A-tax or SINK.

How each is taxed

### A-tax

With unlimited liability, your employer deducts preliminary A-tax based on Skatteverket's decision and the relevant tax table. You file an income tax return the year after the income year. If the final tax is more than what was deducted, you pay the difference; if it is less, you get money back.

You submit the A-tax notification yourself, through the e-service in English or Swedish, or at a service centre. You do not need Swedish e-ID for these e-services, only an email address for a temporary login code. Your employer cannot submit it for you.

### SINK

SINK is a final tax of 22.5%. You do not file an income tax return and cannot claim deductions. If your employer deducted more than 22.5% before the decision, you can request a refund of the excess.

### Choosing ordinary taxation instead of SINK

With limited liability you can choose to be taxed under the Income Tax Act instead, by saying so in your SINK application. You then get a preliminary A-tax decision, file a return the following year and can claim deductions such as increased living costs or travel to and from work.

Registration and tax residency are separate tests

Population registration follows a related but different rule. Skatteverket states you should normally be registered if you spend your main daily rest period in Sweden for at least twelve months and meet the other requirements, and in practice if you plan to live there for one year or more. Someone staying seven months can have unlimited tax liability without being registered, and then uses a coordination number and submits an A-tax notification every year, showing the decision to the employer.

Filing the Swedish return

### Who files

You will most likely file if you have recently moved to Sweden and plan to live there more than a year, or have worked for a Swedish employer. Skatteverket names 4 May as the last day to file without an extension. Most income is reported by employers, banks and Försäkringskassan and is pre-filled.

### Foreign income

The general rule is that you must declare foreign income in your Swedish return, converted into Swedish kronor. For periodic payments, such as a US pension paid monthly, you can use the Riksbank's average annual exchange rate. Some income may be exempt under Swedish rules or a tax convention, but you still give details of it under Additional information (Övriga upplysningar). If you paid final tax abroad and are entitled to a settlement, enter the settlement amount and be ready to prove the foreign tax was paid.

### Filing digitally and getting refunds

You can file digitally with Swedish e-identification such as BankID, or approve the return without changes using the codes sent with it. If you have not received a paper return by 15 April but should have, you can order one. Skatteverket pays a refund automatically if you have registered a bank account with it; a missing bank account is one reason an expected April refund does not arrive.

### Business income, remote work and pensions

If you have conducted business activities abroad, you must report them. Skatteverket says these are exempt from Swedish tax only in exceptional cases, which matters for Americans who keep a US client base after moving. For people employed in another Nordic country, the general rule is liability only in the country of employment from the first day of work. Where you are taxed on pension income can depend on factors such as whether payments began before 5 April 2008 or after 4 April 2008.

Skatteverket's "Convert foreign income from employment" e-service converts foreign pay and pensions into kronor and helps determine whether they are pensionable in Sweden. A separate e-service converts foreign capital income such as interest and dividends.

The US side

Sweden's rules do not change your US filing. The IRS states that US citizens living abroad generally must file a US return on worldwide income. The US and Sweden have an income tax treaty, and the IRS publishes the treaty documents.

Common questions

How long must I stay in Sweden to be a tax resident? Six consecutive calendar months of staying, meaning sleeping, in Sweden gives unlimited tax liability. Short temporary breaks abroad can count toward the period.

What is the SINK rate? SINK is a final tax of 22.5% on Swedish pay for people with limited tax liability. No return is filed and no deductions are allowed.

Do I declare US income in Sweden? With unlimited liability, the general rule is that you declare all foreign income in your Swedish return, converted to kronor, even if a tax convention exempts it.

When is the Swedish tax return due? Skatteverket gives 4 May as the last day to file if you have not been granted an extension.