The ‘economic employer concept’ (ekonomiskt arbetsgivarbegrepp).

In November 2020 the Swedish Parliament approved the introduction of the economic employer concept in Sweden. The new regulations were effective as of 1 January 2021.

The intention with the legislation is to create competition neutral regulations and to protect the Swedish tax base, which is reduced if Swedish employees are taxed abroad while foreign employees in a similar situation are not taxed in Sweden.

In short, with the new legislation the important factor to assess if an employee is taxable or not in Sweden is which entity that is the beneficiary of the employee’s work and not which entity that pays the salary to the employee. The regulations will not impact employees working in Sweden for a maximum of 15 working days in a row to the extent the number of working days in Sweden do not exceed 45 days in total during a calendar year. 

If the 45 day threshold is exceeded, only the exceeding days will be taxable if it is assessed that the economic employer is in Sweden. If the 15 day threshold is exceeded, all working days during that stay in Sweden are to be assessed.

What do you need to do?

We recommend all organizations to set up a process to keep track of who is traveling to Sweden, how many days that are spent here and what tasks that are done when they are working in Sweden. 

Once there is a process to identify which employees work in Sweden and what they do here, the next recommended step is to analyze what is required in practice to be able to comply with the new regulations and build a process outlining who should do what. When an employee triggers taxation in Sweden under the new rules, several actions are required by the employer. Among other things, the foreign company needs to register in Sweden, withhold Swedish tax and submit employer tax returns including the salary relating to work performed in Sweden. Normally, the tax paid in Sweden can be refunded in the home country, which means the employee's home country tax return will be affected. 

How KPMG can help

KPMG assists many Swedish and foreign organizations of varying sizes with both advice on the process and the practical work that needs to be done. 

Our Business Traveler services helps both companies and employees to deal effectively with these kinds of requirements. It brings together in-depth expertise in tax, immigration, mobile assignment administration using state of the art technology to make managing a global workforce simple, efficient and more transparent.

You are welcome to contact us if you have questions about the regulations.

KPMG LINK Business Traveler tool

The Business travel tool provides companies with great visibility and control in dealing with the compliance and risk aspects associated with business travel, with minimal interruption to employees and the business.

You will be able to:
  • Track the travel of all employees, including on-the-go tracking via a mobile app.
  • Receive instant trip analysis and guidance – fast, accurate and tailored tax, social security and immigration assessments.
  • View real-time travel assessments for an employee who is contemplating a business trip.
  • View management information which is available 24/7 through a live digital dashboard and generate compliance reports detailing issues and next steps.
  • Receive regular updates to tax, social security and immigration rules and logic.

For more information please contact us.

Petter Frödeberg

+46 70 756 27 31

Johan Rova
+46 72 186 89 96