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As the new year approaches, certain tax changes are expected to take effect, impacting foreign experts and temporary workers in Sweden. This article outlines the upcoming changes and emphasizes the importance of applying for Special Income Tax, or SINK.
Lower Threshold for Expert Tax
Foreign experts, researchers, and key individuals can, under specific conditions, benefit from a tax reduction when working in Sweden. Known as expert or researcher tax, this allows individuals to pay tax on only 75% of their income. To qualify, applications can be based on either the compensation level or the competence level.
The compensation-level threshold for expert tax eligibility is proposed to decrease from 2 to 1.5 price base amounts per month. This change is part of the 2025 budget proposal and is expected to take effect on January 1, 2025.
In practical terms, this means the monthly compensation must amount to at least 88,201 SEK (based on the 2025 price base amount of 58,800 SEK). The new threshold will apply to applications for individuals beginning their stay on or after January 1, 2025. Retroactive applications cannot be made for individuals whose stay began before this date.
If the monthly compensation does not exceed the threshold, eligibility can be based on the competence level. This requires that tasks, education, and experience are at a level difficult to recruit for within Sweden. This category also includes so-called key individuals, who must hold a managerial or executive role.
Time to Apply for SINK
For individuals residing abroad but working temporarily in Sweden, it is possible to apply for Special Income Tax (SINK). The tax rate is a fixed 25%, and those covered by SINK do not need to file a tax return, as no deductions are allowed.
A SINK decision applies per calendar year, meaning that individuals wishing to be covered by SINK in 2025 must submit their applications well in advance of the new year.
What Happens Without a SINK Decision?
If a SINK application has not been approved at the time of payroll processing, the employer must make a preliminary tax deduction according to standard rules. If an excessive tax deduction is made, it cannot be corrected via payroll once it has been reported to the Swedish Tax Agency.
In such cases, the employee must request a refund through a separate process or apply for an adjustment for the coming months. To avoid administrative complications, it is essential to handle SINK applications and other tax-related matters in good time, as processing times may be lengthy.
Application for Tax Decision- Azets can help
Our expertise in payroll management and tax reporting enables us to ensure an accurate and efficient application process for both employers and employees, minimizing the risk of delays and unnecessary costs that may arise.
Contact Azets for assistance with your SINK or expert tax application – we’re happy to help.
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