Proposal to Reduce the Swedish Special Income Tax for Non-Residents (SINK) from 25 percent to 20 percent

On May 19th, 2025, the Swedish Ministry of Finance submitted a memorandum to the Swedish Government, proposing a reduction of the tax rate of the Swedish Special Income Tax for Non-Residents (SINK) from 25 percent to 20 percent. The change is proposed to take effect on January 1st, 2026, and apply to income received after December 31st, 2025.

Background

In Swedish tax law, there is a clear distinction between unlimited and limited tax liability. Unlimited tax liability applies to individuals who are residents, permanently stay in Sweden, or who have significant ties to Sweden and were previously residing here. Limited tax liability applies to those who do not meet these criteria. 

Income from work in Sweden and certain other income received by individuals with limited tax liability are taxed according to the SINK. Tax payers cannot make deductions or claim tax reductions, and they do not need to file a tax return as the tax is final upon submission. The special income tax is levied at 25 percent on taxable income. It should be noted that the applicable rate was 20 percent between 2013 and 2017 but was increased in 2018 in order to increase the public finances.

Deloitte's Comment

The purpose of the SINK is to facilitate the tax filing process for individuals, and to simplify the tax processes for the Swedish Tax Agency. Consequently, it should generally be more favorable to the individual to be taxed according to the SINK than the Income Tax Act. In order to maintain this balance, it has been deemed necessary by the Swedish Ministry of Finance to decrease the Swedish Special Income Tax for Non-Residents, stating that as it is not desirable to adjust the tax rate of the SINK every time a tax rate in the Income Tax Act is adjusted, it is warranted to adjust the tax rate of the SINK with some margin.

In our experience, the tax cuts of recent years have made taxation according to the SINK less favorable, and although taxation according to the SINK remains the status quo, we have seen a small but steady increase in questions about whether taxation according to the SINK or the Income Tax Act is more favorable. As it remains the stated objective of the legislation to, in most cases, be a more favorable alternative to taxation according to the Income Tax Act, Deloitte agrees that an overview of the current tax rate is warranted. We will continue to monitor the suggestions of the Swedish Ministry of Finance on this topic, and the developments going forward.