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%.
Detailed Explanation
Sweden operates one of Europe's simplest corporate tax structures. A single flat rate of 20.6% applies to all taxable profits of Swedish companies — regardless of whether you earn SEK 100,000 or SEK 100 million, the rate is the same.
Who pays bolagsskatt?
Bolagsskatt applies to Swedish-resident companies — primarily aktiebolag (ABs), the most common business structure — on their worldwide income. Non-resident companies with a permanent establishment in Sweden pay on their Swedish-source income. Enskild firma (sole traders) and handelsbolag (partnerships) do not pay bolagsskatt — their profits pass through to the individual owners and are taxed as personal income.
The rate in context
At 20.6%, Sweden sits in the middle of the Nordic pack: Denmark is 22%, Finland is 20%, Norway is 22%. Compared to the EU27 average of approximately 21.3%, Sweden is marginally below average. The direction of travel has been downward — from 28% before 2009 to 26.3% in 2009, 22% in 2013, and 20.6% from 2021.
Computing taxable profit
The starting point is the company's accounting profit under Swedish GAAP. Adjustments include: - Adding back non-deductible costs (fines, excess entertainment, private-use elements) - Deducting periodiseringsfond allocations (up to 25% of taxable income deferred for up to 6 years) - Interest limitation adjustment if net interest expense exceeds SEK 5 million or 30% of tax-adjusted EBITDA - Koncernbidrag (group contributions) received or given within a qualifying Swedish group - Any other statutory tax adjustments
Periodiseringsfond: the most widely used reduction tool
Swedish companies can defer up to 25% of their taxable income each year into a periodiseringsfond (tax equalisation reserve). This deferred income is added back within 6 years. For an AB earning SEK 1 million profit, a SEK 250,000 periodiseringsfond allocation reduces the current year's bolagsskatt by SEK 51,500 (SEK 250,000 x 20.6%), deferring that tax to a future year. A small annual interest charge applies (schablonintäkt based on outstanding fund balances x 1.5% x government loan rate).
AB vs enskild firma: when does corporate tax win?
For many Swedish entrepreneurs, the choice between operating as an enskild firma (sole trader) versus an AB comes down to the tax rate differential. Enskild firma profits are taxed as personal income — at up to approximately 52% (municipal plus national tax). AB profits are taxed at 20.6%. The retained earnings in the AB can then be distributed as dividends within the K10 gränsbelopp at only 20% flat tax.
The AB generally becomes tax-advantageous when consistent annual profit exceeds approximately SEK 400,000-500,000. Below this threshold, the administrative costs of running an AB (accountant, potentially revisor, annual filing) may outweigh the tax saving.
Group contributions (koncernbidrag)
Swedish tax law allows Swedish group companies to transfer taxable income to loss-making group entities, effectively enabling group-level loss offsetting. The contributing entity deducts the contribution; the receiving entity includes it as income. Requirements include both entities being Swedish tax-resident and the parent holding more than 90% for the full year. This is materially more flexible than the UK group relief system.
Payment — not a one-shot annual bill
Bolagsskatt is not paid in a single lump sum at filing. Skatteverket sets monthly preliminary tax instalments based on the prior year's assessment. If the company's profit is on track to exceed the estimate, a mid-year adjustment request should be filed — underpaying leads to interest charges on the final settlement (kvarskatt). The Inkomstdeklaration 2 is filed by 1 July (electronic) for calendar-year companies, and the final assessment follows some months later.
Source: https://www.skatteverket.se/foretagochorganisationer/skatter/bolagsskatt.html
Real-World Examples
Consulting AB with SEK 800,000 profit
A solo consultant earns SEK 800,000 before tax in her AB. She allocates SEK 200,000 to a periodiseringsfond (25% cap). Taxable income: SEK 600,000. Bolagsskatt: SEK 123,600 (20.6%). The SEK 200,000 deferred reduces this year's tax by SEK 41,200. She pays herself SEK 600,000 gross salary during the year (deductible cost to the AB, reducing AB profit to zero — this is a different planning choice).
Tech startup losing money in year 1, profitable in year 2
A software AB makes a SEK 300,000 loss in year 1. In year 2, it profits SEK 900,000. The year 1 loss is carried forward automatically (no time limit in Sweden) and offsets year 2's taxable income. Effective taxable profit in year 2: SEK 600,000. Bolagsskatt: SEK 123,600.
Group with one profitable and one loss-making AB
A holding AB owns 100% of two operating ABs. Op AB 1 profits SEK 500,000. Op AB 2 loses SEK 200,000. Without group contributions, total bolagsskatt = SEK 103,000 (on SEK 500,000). With a SEK 200,000 koncernbidrag from Op AB 1 to Op AB 2, total group taxable income = SEK 300,000. Bolagsskatt = SEK 61,800. Saving: SEK 41,200.
Common Mistakes to Avoid
- Assuming Sweden has different tax rates for different profit levels — it is a single flat rate with no bands
- Forgetting to file the Inkomstdeklaration 2 by 1 July (electronic) — there is no automatic extension
- Not using the periodiseringsfond in high-profit years — it is free tax deferral with a minimal interest cost
- Assuming sole trader (enskild firma) is taxed at 20.6% — it is not; enskild firma profits are personal income taxed at up to 52%
Frequently Asked Questions
Is there a lower rate for small companies in Sweden?
No. Sweden has a single flat 20.6% bolagsskatt rate for all companies regardless of size or profit level. There is no SME rate, no tiered structure, and no regional variation.
When did the 20.6% rate come into effect?
The 20.6% rate applies from inkomstår 2021 onwards. Prior to that it was 21.4% (2019-2020), 22% (2013-2018), and 26.3% before 2013.
Can I defer bolagsskatt payments?
Yes, through the periodiseringsfond you can defer up to 25% of taxable income each year for up to 6 years. A small annual interest charge (schablonintäkt) applies on the outstanding balance.
Does Sweden have a minimum corporate tax?
No minimum corporate tax applies. If a company makes a loss or zero profit in a year, no bolagsskatt is due. Losses can be carried forward indefinitely to offset future profits.
Does the 20.6% rate apply to holding companies?
Yes, Swedish holding ABs (mellanbolag) are subject to 20.6% bolagsskatt on any taxable income. However, dividends received from subsidiaries under the participation exemption (näringsbetingade andelar) are tax-exempt, making the holding structure highly efficient for group profit accumulation.
Practical Tips
- File the Inkomstdeklaration 2 electronically by 1 July — not 1 May (the paper deadline) — there is no online extension to request
- Use the periodiseringsfond every profitable year: free tax deferral costs only the minimal schablonintäkt interest charge
- Review mid-year whether your preliminary tax estimate is still accurate — underpaying by more than SEK 30,000 accrues interest
- Consider a holding AB structure if you plan to retain profits across multiple years or own multiple companies — group contributions and the participation exemption significantly reduce effective group tax
Ask Finn your Sweden accounting questions
Finn knows Skatteverket (Swedish Tax Agency) rules and your specific business numbers. Get instant answers in plain English.
Try free for 14 days