The Swedish government plans to introduce stricter taxation for Business Travelers and posted workers in Sweden

Taxation of temporary work in Sweden

The government has announced that it wants to introduce the "economic employer" concept by 1 January 2021. If the concept is introduced into Swedish law, it will have a major impact on Swedish and foreign companies that have foreign employees who work temporarily in Sweden.



Petter Frödeberg

Partner & Head of Global Mobility Services

KPMG i Sverige


In previous editions of TaxNews we have written about the Government’s proposal to implement the economic employer concept in Sweden. The prior initiative from the Government was put on hold during the fall of 2018.

The Government has just announced that they will resume the implementation of these rules and want to implement the economic employer concept in Sweden as of January 1, 2021.

Sweden has historically seen the employer as the entity paying salary to an employee. As a result, in many situations a foreign employee who is working temporarily in Sweden and paid by a non Swedish entity has not been liable to pay Swedish tax. Many OECD countries apply the economic employer concept which implies that the employer can be another entity than the entity actually paying the salary to an employee.

In the initial information released by the Government, they state that that instead of the entity who pays the salary being the important factor for deciding whether the employee should be taxed in Sweden; the important factor will be who the employee is working for. Some exceptions for intra group situations will be also be proposed.

The Government will get back with more details on the proposal.

KPMG Comment

Currently, there is no detailed information available. However, if the economic employer concept is implemented it will have a significant effect on Swedish and foreign companies with foreign employees working temporarily in Sweden.

Even with an exception for intra group situations, the rules imply that companies need to have a process to identify which employees are working in Sweden and how much time they are spending here.

KPMG will host a seminar together with International SOS the 13:th of November about business- travelers. The seminar will be covering risks from a tax- and immigration perspective as well as a health and security perspective. The proposal about the economic employer concept will also be discussed.

Contact us now if you want to discuss the consequences of the implementation of economic employer.

Read more:
The article in Swedish

Petter Frödeberg
+46 8 723 96 82

Johan Rova
+46 8 723 99 48

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