Sweden: A few tax questions

[dswallow]

My partner and I are seriously looking at moving to Sweden (from the UK). Preferably to a rural area, where we can have a smallholding. We are both self-employed (using the internet) but are a little concerned with all the various taxes. We earn just under ?25k a year each, so know we would have to pay municipality of residence tax of anywhere between 29-35%, and maybe the national tax on a small amount of our earnings.
What has confused us is the social security - on all the websites I have seen it seems to infer that 30.7% is payable, is that on gross income? If so does that mean we would be paying 29-35% + 30.7% and then another 25% on anything over the national income threshold? Even if we capped our earnings to avoid the latter, paying 60% tax seems waaay to high.
If we're working from home, will the home be liable for 90% capital gains tax, or would we just pay the normal 30%?
We were really drawn by the outdoor lifestyle and quality of life, but if we have to pay 60% tax I just can't see that it is possible...unless there is some tax credit system I have missed?
Any help or advice muchly appreciated,
JB

[TLimestahl]

Hello,

I'm no tax advisor in any way, but in my opinion one of the key factors when starting a business in Sweden is choosing the right business structure. Sweden still got the world's highest tax pressure, and tax planning is consequently crucial.

I'm swedish and have previously been working as an IT contractor ('Sole trader') (enskild firma, in swedish). As a sole trader you are infact correct that one would have to pay around 60% in taxes and social security on your gross income, regardless of marginal tax levels.

You should probably be looking into setting up a Ltd (AB - AktieBolag) or other as you will then pay corporate tax. Below you will find a couple of links that should clarify and give you an idea on the laws and taxation regarding a business. But either way, you are likely to have to cut your net pay, if you compare Sweden and England.

You may find the tax office useful - www.skatteverket.se (they have some information in english)

http://www.skatteverket.se/download/...606/419b01.pdf - "Tax application for foreign entrepreneurs" will give you some ideas (very general) on setting up in Sweden.

Other links that might be useful:

1. Setting up a business in Sweden
2. Costs for setting up a business in Sweden
3. Establishing a business in Sweden Check out the links on the left hand side, under tax the individual tax system and marginal tax brackets are explained.

Let me know if you have any questions, glad to help out.

Cheers,
Andy
Gothenburg, Sweden

[Jeff Bixby]

Originally Posted by TLimestahl

Hello,

I'm no tax advisor in any way, but in my opinion one of the key factors when starting a business in Sweden is choosing the right business structure. Sweden still got the world's highest tax pressure, and tax planning is consequently crucial.

I'm swedish and have previously been working as an IT contractor ('Sole trader') (enskild firma, in swedish). As a sole trader you are infact correct that one would have to pay around 60% in taxes and social security on your gross income, regardless of marginal tax levels.

You should probably be looking into setting up a Ltd (AB - AktieBolag) or other as you will then pay corporate tax. Below you will find a couple of links that should clarify and give you an idea on the laws and taxation regarding a business. But either way, you are likely to have to cut your net pay, if you compare Sweden and England.

You may find the tax office useful - www.skatteverket.se (they have some information in english)

http://www.skatteverket.se/download/...606/419b01.pdf - "Tax application for foreign entrepreneurs" will give you some ideas (very general) on setting up in Sweden.

Other links that might be useful:

1. Setting up a business in Sweden
2. Costs for setting up a business in Sweden
3. Establishing a business in Sweden Check out the links on the left hand side, under tax the individual tax system and marginal tax brackets are explained.

Let me know if you have any questions, glad to help out.

Cheers,
Andy
Gothenburg, Sweden

Hi ,

Something to think about as well just as a general comment.. Life is a lot cheaper in Sweden then the UK. However you need to live it like a Swede, e.g not eat out and don't drink out. That is expensive.

If you are planning on having children there is no contest it is so much cheaper with child care that you can actually afford going to work. A few of my friends in London has stopped working because it didn't make any sense to go to work.

I've been in the UK for 11 years so not up to speed with any tax situations in Sweden any longer but if you are buying I believe you can claim back the interest you pay on your mortgage and off-set against the tax. Can't give you more details really..

Quality of life is great in Sweden and all houses comes with a minimum of double if not tripple glazing! haha little did I know when I moved to England....I never been so cold in my life!

Well all the best and let us know how you get on.
tinalise is offline

[jwise]

anyway, sweden's tax problem is much better that UK i think

because you will always no idea how much you need to pay to them.

it's difficult you know.