Sweden Accounting Questions Answered

What is the corporate tax rate in Sweden?

Sweden's corporate income tax (bolagsskatt) is a flat 20.6% on taxable profits for all Swedish aktiebolag (ABs) and most other legal entities. There is no regional variation, no tiered rates based on profit size, and no surcharges. This rate has been stable since 2021 when it was reduced from 21.4%.

How do the Swedish 3:12 rules (fåmansföretagsregler) work?

The 3:12 rules (fåmansföretagsreglerna) govern how dividends and capital gains from closely held Swedish ABs are taxed. Dividends within the annual gränsbelopp (threshold) are taxed at 20%. Above the threshold, dividends are taxed at 30% (or as employment income if very large). The K10 form is filed annually to calculate and track the threshold.

Should I take salary or dividends from my Swedish AB?

For Swedish AB owners, the optimal approach is a salary sufficient to maximise the K10 gränsbelopp salary-based addition and maintain pension entitlements, with additional profits retained in the AB and extracted as dividends within the gränsbelopp at 20%. The exact optimal salary depends on company profits, number of employees, and personal circumstances.

How does the Swedish periodiseringsfond (tax reserve) work?

The periodiseringsfond allows Swedish companies and sole traders to defer up to 25% of taxable income into a tax reserve each year. The reserve is reversed within 6 years and added back to income. An annual interest charge (schablonintäkt) based on outstanding balances applies. It is one of the most widely used tax deferral tools in Sweden.

When do I need to register for moms (VAT) in Sweden?

You must register for Swedish moms (mervärdesskatt) when your taxable turnover in Sweden exceeds SEK 120,000 in a 12-month period. Below this threshold, registration is optional. Standard rate is 25%, with reduced rates of 12% and 6% for specific goods and services.

What are the Swedish VAT (moms) rates for different goods and services?

Sweden has three moms rates: 25% standard (most goods and services), 12% reduced (food, restaurant meals, hotel accommodation, bicycle and clothing repairs), and 6% lower reduced (newspapers, books, cultural events, sporting events, public transport). Exports are zero-rated.

How do I set up a company (aktiebolag) in Sweden?

To set up a Swedish aktiebolag (AB), you need SEK 25,000 minimum share capital, at least one director resident in the EEA, and registration with Bolagsverket via verksamt.se. Electronic registration takes 1-4 weeks and costs approximately SEK 2,200. You then register the AB with Skatteverket for tax purposes.

Should I operate as enskild firma or aktiebolag (AB) in Sweden?

For annual profits below approximately SEK 400,000, an enskild firma is usually simpler and cheaper to run. Above this level, the tax savings from operating as an AB (20.6% bolagsskatt vs up to 52% personal income tax) typically outweigh the additional administrative costs. The 3:12 rules make dividends from an AB particularly tax-efficient.

What are Swedish employer obligations for social contributions and payroll?

Swedish employers must pay arbetsgivaravgifter of 31.42% on gross salaries, file monthly arbetsgivardeklarationer (AGD) by the 12th of each month, provide at least 28.5 days annual vacation, pay sick pay for days 2-14, and withhold A-skatt (income tax) from employees. Reduced arbetsgivaravgifter rates apply for workers under 26 and over 65.

How do pension contributions work as tax deductions in Sweden?

Swedish employer pension contributions (tjänstepension) are deductible up to 35% of the employee's gross salary, are not subject to arbetsgivaravgifter, and are the most tax-efficient form of employee compensation. Individual pension savings (IPS) offer a personal deduction of up to SEK 35,809 per year. For AB owners, employer pension is one of the best tax planning tools available.