New concept” Economic Employer” and possible tax liability in Sweden for foreign workers

Swedish Government has now passed the law which legislates the foreign workers tax liabilities, effective from January 1st, 2021.

Summarily, it will make foreigner worker an income taxpayer in Sweden if the work they do is benefitting a Swedish company or even a foreign company with Swedish permanent establishment.

Swedish companies who are using foreigner company’s workforce will be required to withhold 30% of the invoice to be paid out and report Swedish tax on salary for work performed in Sweden (unless they register themselves in the Tax Agency for F-tax and Employers). The obligation cannot be transferred to the Swedish company or to the company with Swedish permanent establishment.

There is an exception, when the foreigner workers are in Sweden and if the work is done within 15 consecutive days and the total of workdays in Sweden does not exceed 45 days per a calendar year. When calculating workdays, only days the workers works are counted.

There are some uncertainties and not all the specific questions are clarified by the Tax Agency, but we’ll work on getting answers.