Published: 2023-12-13
On December 2nd, 2023, the Swedish parliament approved of the Ministry of Finance’s proposal to extend the validity of decisions of expert tax relief from five to seven years. The new legislation entered into force on January 1st, 2024.
The expert tax relief provides an opportunity for tax relief for foreign experts, researchers, or other key personnel. If the individual qualifies, 25 percent of the employee’s employment income, as well as certain reimbursements for expenses, are exempted from taxation in Sweden. The income exempted from taxation is in addition also exempted from Swedish employer contributions.
The new legislation results in that the expert tax relief will be applied for seven years from the individual’s start of work in Sweden, in comparison to the previous five years’ time limit. It also extends the maximum duration for the intended stay in Sweden to seven years from the previous five years.
The purpose of the new legislation is to strengthen Sweden’s international competitiveness, specifically in the field of research. There is also an ambition to increase the incentives of choosing Sweden for new establishments for international companies, as well as to stimulate and encourage companies to locate or retain group management functions involving foreign staff in Sweden. .
For employees who began their stay in Sweden after March 31st, 2023, and have received an approved decision on expert tax relief (before January 1st, 2024), it is possible to apply for an extension of the decision’s validity period. An application for extension can be made from the initiative of both the employee and the employer and must reach the Taxation of Research Workers Board no later than March 31st, 2024.
In 2021, Sweden extended the expert tax relief from three to five years, which placed Sweden at an average level compared to corresponding regulations in other countries. With the extension to seven years, Sweden will instead be positioned at the upper part of corresponding tax incentives which represents a positive step for Sweden’s competitiveness on the international market and can also facilitate the recruitment of highly qualified workers.
The Swedish government has also appointed an inquiry in June 2023 that, in addition to the research and development (R&D) deduction, also encompasses the expert tax relief. The inquiry states that several additional aspects of the expert tax relief are to be reviewed to ensure Sweden’s international competitiveness in relation to corresponding regulations in other countries. The result of the inquiry should be presented no later than January 15th, 2025.
With regard to the new seven-year limit of the expert tax relief and the opportunity of extending previous decisions within a limited time frame, we would like to remind employers to review which employees with expert tax relief decisions that began their stay in Sweden after March 31st, 2023, and to ensure that an application for the extension is submitted within the applicable deadline. The application can easily be made by e-mail in accordance with the Taxation of Research Workers Board’s instructions here.
For decisions issued between December 2nd, 2023, and January 1st, 2024, the Taxation of Research Workers Board has announced that the validity period may vary between five and seven years, depending on when the processing of the application began. The decision issued will include the validity period, and decisions with a validity period of five years should include attached information of how to apply for an extension.
Please contact us if you have any questions regarding the new legislation, the application process, or the expert tax relief in general.
Contact details
Alexander Strandberg
Partner | Deloitte AB
astrandberg@deloitte.se
+46 76 827 73 41
Per Elmby
Senior Manager | Deloitte AB
pelmby@deloitte.se
+46 70 080 44 16
Cecilia Vegelius
Assistant Manager | Deloitte AB
cvegelius@deloitte.se
+46 70 080 41 64