A judgment that recently came from the Supreme Administrative Court (“The Court”) raised the question of whether an employee working remotely from abroad can be considered working in Sweden and therefore be covered by the Swedish work-based social insurance. The Swedish Social Insurance Agency (Sw. Försäkringskassan) argued that the person who performs the work must, as a main rule, be physically present in Sweden to be subject to work-based social insurance. The Agency claimed that when an employee works remotely from abroad a longer period the work is no longer considered work performed in Sweden. The Court came to a different conclusion.
The Court stated that the work-based social insurance is primarily intended to provide protection for gainfully employed work that is physically performed in Sweden, but that the legal preparatory work opens up to the possibility that working remotely from abroad can still qualify a person for work-based benefits in Sweden. The Court asserted that the conditions for this should be determined by case law
The Court noted that the employee’s physical presence in Sweden does not necessarily have a decisive significance when deciding upon whether a person is subject to social insurance in Sweden. The Court argued that in addition to where the work is physically performed, an assessment must be made in each individual case where the nature of the work, the employer's activities in Sweden and where the employee is employed can be considered.
In the judgment at hand the Court ruled that the person was to be considered employed in Sweden since the person was employed by an employer with operations in Sweden. The employee’s tasks were of such nature that they could be performed remotely, and the Court established that there was no information presented in the case contradicting this. The Court therefore ruled that the person was to be covered by work-based benefits in Sweden even though she performed her work remotely from abroad.
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The question on whether a person is to be seen as working remotely from Sweden when being abroad has not yet been answered in legal practice. KPMG therefore considers it positive that an indicative judgment has come from the Supreme Administrative Court. Since the Court concluded that the circumstances must be assessed in each individual case, however, additional case law will be needed to clarify which circumstances can be decisive when assessing if a person is working remotely. Because of the legal uncertainty there is still a risk that a person working remotely in Sweden from abroad is not included by the Swedish work-based social insurance.
If a person is covered by the work-based part of Swedish social insurance, this normally means that the employer must pay social security contributions in Sweden. It should be noted that an obligation to pay social security contributions may also exist in the country where the work is physically carried out (according to that country’s internal legislation).
It should also be noted that other rules may apply if EU Regulation 883/2004 or any convention on social security is to be applied. These regulations may lead to a different assessment of where a person should be socially insured when working remotely abroad.
KPMG continuously monitors any legal progress and updates the text.
Please do not hesitate to contact us if you have any questions.
The article in Swedish