A review has been conducted of the Swedish rules on R&D deductions and expert tax and is presented in SOU 2025:3. KPMG has written about the proposed changes to the R&D regulatory framework in a TaxNews article titled “Positive changes in R&D deduction rules " (sv). In this TaxNews, we outline the proposals within the framework of the rules on expert tax.
The changes are proposed to take effect from January 1, 2026.
In June 2023, the government decided to appoint a special investigator to review the provisions on both research and development deductions (R&D) and tax relief for foreign experts. The investigation's mandate in this regard consisted of two components:
The first part concerns the R&D deduction , please read TaxNews no 3, 2025 (sv).
The second part concerns tax relief for foreign experts, where the target of the investigation is to:
The investigator has engaged in discussions with authorities, companies, educational institutions, and tax consultants such as KPMG, who have extensive experience working with issues related to expert tax.
In November 2024, the government decided to include a supplementary directive for the inquiry, which is to be completed and reported by January 19, 2026. However, this does not affect the proposal for tax incentives for research and development (SOU 2025:3), which the investigation has now submitted.
The expert tax rules have existed in their current form since 2001 and aim to increase Swedish companies' access to highly qualified labor. The introduction of the salary level rule in 2012 was intended to simplify and create predictability for employers and employees. According to the investigation, the Swedish expert tax rules are generally competitive internationally but are not applied as extensively as in other countries. The investigation therefore proposes the following changes to increase attractiveness and create additional predictability.
Competence rule
Expert tax can currently be granted based on the employee’s tasks, level of education and experience, the so-called competence rule. It is proposed that the competence rule be amended. It has been highlighted that the current requirements are complex and difficult to predict, resulting in infrequent application. The investigator proposes that expert tax should be granted to employees working within the framework of research and development and who have a doctoral degree or similar experience important for the work to be performed in Sweden. The proposal also means that there no longer needs to be difficulties recruiting comparable personnel in Sweden. The possibility for other experts and key individuals to obtain expert tax under the competence rule will be removed.
Salary requirement rule
As an alternative, expert tax can be granted if on the employee’s monthly compensation exceeds 1.5 times the price base amount (Sv. prisbasbelopp). The investigator proposes the following changes. The salary level should remain in line with today's level at SEK 88,200 for 2025. The updated level has been in effect since January 1, 2025, and is considered internationally competitive. Going forward, the investigator believes that the salary requirement should follow the general income level instead of the general price level and that the salary requirement should therefore be based on the income base amount (Sw. inkomstbasbelopp) instead of the price base amount. The salary requirement is proposed to be 1.1 times the income base amount, which according to the 2025 level is SEK 88,660.
Payer
The investigation reveals that various market tax practitioners have experienced uncertainty about whether expert tax can be applied in situations where someone other than the employer pays parts of or the entire compensation, such as in split-salary situations or for compensation from incentive programs at previous employers within the same group, and that there is a demand for clarification. The investigator believes there is no need for regulatory change and refers to the current regulations, which clearly state that compensation from parties other than the employer are covered by expert tax if the cost is borne by the Swedish employer.
Tax relief
The investigation has compared the relief in Sweden with other countries and assessed that the level of tax relief should be 30 percent instead of the current 25 percent. Due to Sweden generally having lower salary levels and higher taxes, this is seen as an important step to attract and recruit highly qualified labour.
Validity period
The investigation review also proposes that expert tax relief should be available for a total period of 7 years during an individual's lifetime, instead of a continuous period of 7 years counted from the start of the stay, as is currently the case. Such a change aims to eliminate uncertainty about when the validity period starts, as there can be difficulties in determining the start of the stay.
Citizenship requirement & residency time
According to current regulations, Swedish citizens cannot be granted expert tax. The investigator questions whether this contradicts EU law and proposes that the so-called citizenship requirement be abolished to avoid potential discrimination. As a consequence, and to maintain the purpose of the expert tax, the current requirement that the individual must not have lived or permanently stayed in Sweden in the past five years should be extended to 10 years. To strengthen employers' ability to hire individuals who need to return to Sweden, it is proposed that previous time with expert tax be exempted from the mentioned residency requirement. Also, residency as a researcher at an educational institution is exempted under certain conditions.
Intent requirement
The investigator assesses that the requirement for an intention to stay in Sweden for a maximum of 7 years lacks practical significance and should therefore be removed.
Application deadline
The current application deadline of 3 months from the day work began in Sweden is proposed to be extended to 6 months. This would create a link to the threshold for unlimited tax liability and thereby reduce the risk of individuals missing out on expert tax in cases where they extend their initial plans to stay and work in Sweden.
Unchanged
The investigation also discusses other possible changes where the investigator's conclusion is that no changes should be made, at least not at present, for example the requirement to work for a Swedish employer (or a foreign employer with a permanent establishment in Sweden), how benefits should be considered and calculated when applying the salary requirement rule, and that applications should continue to be reviewed by the Taxation Board for Researchers (Sv. Forskarskattenämnden).
KPMG welcomes the investigator's clarifications.
These are important steps towards increased predictability and clarification in the application of the rules. The introduction of the salary requirement rule in 2012 has in many respects led to simplifications but has also created complex situations and uncertainty when employees have agreements other than traditional gross salary agreements.
A major challenge is the definition of employer which has, in practice, been unclear and therefore unsatisfactory. The investigator proposes no changes in this regard, stating that there is no need for clarifications or changes, considering the current regulations sufficient to apply expert tax when compensation is provided by, for example, a foreign group company if the cost is borne in Sweden. This is an interesting conclusion. In international groups where employees who work in Sweden temporarily receive part of their salary from their home country employer, but the full cost is borne by the Swedish employer, our experience is that expert tax has been denied on the foreign salary portion. It will be interesting to follow the referral responses and see how authorities comment on this aspect of the investigation.
The proposed changes align more closely with internationally comparable countries, such as Finland and Denmark, which hopefully will lead to more highly qualified individuals choosing to move to Sweden for work.
KPMG recommends that employers review internal processes and policies to assess whether future employees, including Swedish citizens, will be able to meet the requirements for expert tax.
In summary, KPMG views the proposed changes as positive and an important step for companies to internationally recruit highly qualified labour.
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