Tax relief for foreign key personnel

Provisions on tax relief for foreign employees are found in Chapter 11 Sections 22 - 23 a of the Income Tax Act (1999:1229). Since 2001 they have covered experts/specialists, researchers, and other key personnel, and from 2012, everyone receiving monthly remuneration over a certain level.  

The legislation provides an additional advantage to companies who need foreign expertise for their Swedish operations.

Tax relief features

The main feature of Sweden's tax relief legislation will provide a 25 percent reduction of taxable income of a foreign key person. This means that a key foreign individual's income tax will be based on only 75 percent of his or her income.

The reduced tax applies to all salaries and "perks", such as employers' contributions to housing and living costs.

The reduction will apply to the first three years of the temporary stay in Sweden. However, foreign key personnel may reside in Sweden up to five years.

Foreign key personnel will also be able to receive tax-exempt contributions from employers for moving to and from Sweden, holiday travel to a home country, and school fees for children.

All other taxation is the same as that of any other Swedish resident.

Employers will receive a 25 percent reduction on the basis on which their social security contributions are calculated.

Personnel covered

Persons who can be considered for tax relief are those who reach a certain level of remuneration (which per month must exceed two times the price base amount for the calendar year in which the work commences). The price base amount for 2017 is 44 800 SEK.

Persons who do not reach the requisite level of remuneration can still be considered for tax relief if they are an expert/specialist, researcher, executive or other key personnel.

Foreign key personnel include scientists, researchers, technicians, specialists and others. One main criteria for qualifying for the tax relief on these grounds is that Swedes with the foreigner's skills or talents are impossible or extremely difficult to recruit in Sweden.

Foreign key personnel also include executives and managers who hold vital positions in a company. These people would be responsible for a company's general management and administration. Such personnel could be managers of a foreign-owned subsidiary. Other key personnel could be specialists in rationalization, production, administration, logistics, marketing, engineering, finance and information and communication technologies.

The legislation does not limit the foreign key personnel to specific qualifications or positions, but provides some examples and guidelines.

The tax relief applies only to employees of a Swedish company or operation. The tax relief is not applicable to an employee assigned to Sweden by a foreign company that has no operations in Sweden. However, if a foreign key person is assigned to Sweden by a foreign company, and is paid by the foreign company's Swedish subsidiary, he or she is eligible for tax relief on the amount paid by the Swedish subsidiary.

Other prerequisites and conditions

Employers must be a Swedish company, either Swedish or foreign owned. Or the employer may be a foreign company that has a permanent establishment in Sweden.

Individuals qualifying for tax relief may not be Swedish citizens.

An individual who has been a resident in Sweden during any of the five years prior to the start of the assignment in Sweden cannot qualify for tax relief status.

Individuals granted tax relief are not expected to reside in Sweden for more than five years.

The provisions on tax relief based on the level of remuneration entered into force on 1 January 2012 and apply only to work in Sweden which commences on or after this date. For work commenced prior to these provisions entering into force, the older provisions are solely applicable.

Applications, reporting

Application for tax relief must be submitted by the employer or foreign person within three months of the start of employment. Applications are submitted to the Taxation of Research Workers Board (Forskarskattenämnden) within the National Tax Administration.

Decisions by the Board can be appealed to county or national administrative courts.

Employers, in reporting income to tax authorities must include the key persons' tax-free amounts. All other reporting by employers follows standard procedures.

There are no legal means for extending the application time in individual cases. Applications received by the Taxation of Research Workers Board just one day after the stipulated deadline are considered to be late and will be rejected. It is therefore important to ensure that the application is submitted in time.

There are two different application forms; one to apply for tax relief based on the level of remuneration and one to apply for tax relief on the other grounds. For further information, you may find guidance in the application form. Please find the link to the said application form below.

Application forms

The application for reduced taxation should be sent to


Box 24144

SE-104 51 Stockholm

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