Sweden: Tax proposals in 2022 budget bill

Withholding tax, employee stock options, value added tax (VAT), bicycle benefits

Withholding tax, employee stock options, value added tax (VAT), bicycle benefits

The budget bill for 2022, presented to the Riksdag on 20 September 2021, includes the following tax-related measures.

  • New provisions regarding withholding tax on dividends paid to foreign persons with the introduction of a new withholding tax law for dividends (expected to apply with regard to dividends paid after 31 December 2023)
  • A limitation on the ability to deduct losses from previous years when there is a change in ownership; the introduction of the special limitation rule that would limit the ability to use prior years' losses after a change of ownership (proposed to apply effective from 11 June 2021 regarding changes in ownership that take place after 10 June 2021)
  • An extension of the rules for relief from the taxation of employee stock options in certain instances (expected to apply to an employee stock option acquired after 31 December 2021)
  • Simplification of the rules on the place of employment and tax-free remuneration for temporary employment and assignments (expected to apply with regard to compensation for work performed after 31 December 2021)
  • Tax relief for bicycle benefits that an employer provides to its employees for private use (proposed to be effective with regard to benefits provided after 31 December 2021)
  • A reduction to the benefit available for environmentally friendly cars by replacing the current reduction with a fixed standard reduction based on the car's environmental technology
  • An increase in the turnover limit to SEK 80,000 (from SEK 30,000) per tax year for the exemption from value added tax (VAT)
  • Reduction of the VAT rate to 6% (from 12%) for certain repairs of bicycles, shoes, leather goods, clothing and household linen
  • An increase to the tax on alcohol and tobacco
  • Allowing tax payments under an installment plan for temporary deferrals (a large number of temporary deferrals are expected to end in the spring of 2022, starting at the turn of the month March-April 2022 and with an intention of making it easier for companies to satisfy their tax liabilities)

Read a September 2021 report (Swedish) prepared by the KPMG member firm in Sweden


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