Sweden: Tax agency’s new rules for information reporting by certain foreign companies

New rules require certain foreign companies to submit a "specific information" (särskilda uppgifter) report to the Swedish tax agency. 

Information must be provided by foreign companies that do not file an income tax return and that satisfy one of three criteria:

• The foreign company is registered for Swedish F-tax.
• The foreign company is required to deduct preliminary tax from compensation for work in Sweden.
• The foreign company is required to provide the equipment necessary to keep an electronic staff register on a building or construction site.

The following information is to be submitted to the Swedish tax agency:

• Information regarding the company’s operations in Sweden
• The time period over which the operations or transactions have been conducted
• Any other information that the Swedish tax agency requires to assess tax liability under the Swedish income tax law

The new rules are effective for financial years beginning after 31 December 2020. Hence, the first period to submit information is for financial year 2021.

The filing date for the "specific information" report would be the same date if the foreign company were required to file an income tax return. Thus, for a company with the calendar year as its financial year, the information would have to be submitted no later than 1 July of the year after the financial year in question.

Companies must submit the "specific information" report annually, from 2022 onwards as long the company is required to file such information according to one of the three criteria listed above.

If the "specific information" report is submitted late, the company may be liable to a penalty at a range between SEK 1,250 to 3,750.  

An e-filing mechanism for "specific information" reporting will be available from mid-March 2022.

To confirm that the data on the "specific information" report provided are correct, a person who is authorized to sign the report must sign the "specific information" report (by using a pointing device such as a computer mouse). Hence, the information cannot be submitted by an advisor. If a company is unable to use the e-filing mechanism, it needs to contact the Swedish tax agency. 

Foreign companies are required to file income tax returns if they conduct business activities in Sweden (from, for example, a permanent establishment in Sweden). A company must itself assess whether it has a permanent establishment. The Swedish tax agency recently started to send out to companies income tax returns for financial year 2021.

If a foreign company received an income tax return but is not liable to tax in Sweden, the company has no obligation to file an income tax return. Furthermore, if the company is required to file a "specific information" report in accordance with the above discussed criteria, tax professionals believe the "specific information" report would suffice—i.e., a company is not obligated to file both an income tax return and "specific information" report.

When filing a "specific information" report, it is important to determine that the information is correct and transparent in order for the Swedish tax agency to be able to make a correct assessment. Incorrect information can result in a penalty assessment.

An initial step for foreign companies is to determine whether it has a permanent establishment in Sweden.

Read a March 2022 report prepared by the KPMG member firm in Sweden