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Ready to explore the home of cozy lifestyle, sustainable living, and the fika coffee break ritual? Totally understandable — living in Sweden as an American expat can be an amazing adventure. You get to immerse yourself in the charming Swedish culture, explore picturesque landscapes, and hop over to other European countries with ease.
But here’s the catch – even as you’re embracing the Swedish lifestyle, Uncle Sam still wants to keep tabs on your finances.
As a US citizen or green card holder, you’re still on the hook for filing US taxes, no matter where you call home or earn your krona. But there’s good news; if you’re paying income tax to the Swedish government, you’ve got options to avoid double taxation.
Let’s dive in and explore how you can enjoy your Swedish dream without getting tangled up in tax troubles.
Snapshot of taxes in Sweden
- Primary tax forms: Inkomstdeklaration 1 (for individuals)
- Tax deadline: Usually May 2nd for paper forms, May 15th for electronic filing (can vary slightly each year)
- Reporting website: skatteverket.se
- Administrative language(s): Swedish (English support available)
- US Tax treaty? Yes
- Totalization agreement? Yes
Determining tax residency & liability in Sweden
Anyone who meets at least one of the following criteria meets the legal definition of a Swedish tax resident:
- Your permanent home is in Sweden, or
- You stay in Sweden for more than 183 days in a 12-month period, or
- You have essential ties to Sweden (such as family, property, or business interests)
Swedish tax residents are taxed on their worldwide income, which means they are required to report and pay taxes on income from all sources, both within Sweden and from other countries. This includes employment income, business income, investment income (dividends, interest, capital gains), rental income, pension income.
On the other hand, non-residents only have to pay Swedish taxes on Swedish-sourced income.
Understanding the Swedish tax system and deadlines
Generally, all Swedish tax residents (and those who earn Swedish-sourced income) must file an annual income tax return. Most taxpayers file Inkomstdeklaration 1 for individuals.
In Sweden, the tax system is highly automated. The Swedish Tax Agency (Skatteverket) typically sends pre-filled tax returns to residents based on information they’ve already received from employers, banks, and other sources.
The tax deadline is usually May 2nd for paper forms and May 15th for electronic filing, although these dates can vary slightly each year. To file your return and pay taxes, you’ll use the skatteverket.se portal.
Note:
Before you file, you'll need a personal identity number (personnummer) from the Swedish Tax Agency.
Taxation of income in Sweden
Sweden employs progressive tax rates. Swedish income tax rates for the 2023 tax year are approximately as follows:
| Income (SEK) | Income (USD) | Tax rate |
| Up to 614,000 | Up to ~$58,370 | About 32% (only municipal tax) |
| Over 614,000 | Over ~$58,370 | About 52% (municipal + state tax) |
Note:
The rates above include both municipal and state taxes. Municipal tax rates vary by municipality but average around 32%.
Deductions & allowances
Some common Swedish tax benefits for US expats living in Sweden include:
- Basic deduction: Varies based on income, but can be up to SEK 41,300 (~$3,780)
- Work-related expenses: Such as travel between home and work (with limitations)
- Home office deductions: If your employer doesn’t provide an office
- Pension contributions: Up to 35% of your income, with a cap
Other taxes in Sweden
Self-employment taxes
Self-employed individuals in Sweden pay:
- Income tax: Same progressive rates as employees
- Social security contributions: About 28.97% of profits
- VAT: If annual turnover exceeds SEK 30,000 (~$2,750)
Social security taxes
Swedish employees typically have about 31.42% of their salary paid by their employer for social security contributions. Employees pay an additional 7% of their salary, but this is fully compensated through a tax reduction.
Note:
Sweden’s totalization agreement with the US prevents American expats living in Sweden from paying social security taxes to both countries.
Capital gains taxes
Capital gains in Sweden are typically taxed at a flat rate of 30%. However, gains from the sale of private residences may be deferred or reduced under certain conditions.
VAT
The standard VAT rate in Sweden is 25%. Reduced rates include:
- 12% for foods, hotel stays, and restaurant services
- 6% for books, newspapers, and public transportation
Property taxes
Property tax in Sweden is relatively low. For most residential properties, it’s capped at SEK 8,549 (~$780) per year or 0.75% of the property’s tax assessed value, whichever is lower.
Inheritance, estate, & gift taxes
Sweden abolished inheritance and gift taxes in 2004. There are no taxes on inheritances or gifts, regardless of the amount or relationship between the giver and receiver.
Wealth tax
Sweden no longer has a wealth tax, having abolished it in 2007.
Remember:
While this provides a general overview, tax situations can be complex for expats. It's always wise to consult with a tax professional familiar with both US and Swedish tax laws for personalized advice.
How Americans living in Sweden pay US taxes
Moving to Sweden doesn’t mean you’re free from your US tax obligations, as all American citizens and permanent residents who meet the minimum income reporting threshold must file a US tax return annually, even if they live and have tax residency abroad.
Americans abroad receive an automatic two-month tax extension to June 15th. You can extend that deadline even further upon request to October 15th. Nonetheless, you’re responsible for paying taxes by April 15th.
With all this in mind, if you also file taxes in Sweden, this could result in double taxation. Fortunately, most US expats in Sweden can benefit from one of the following tax breaks:
The Foreign Tax Credit
The Foreign Tax Credit (FTC) offers Americans dollar-for-dollar credits for any foreign income taxes they pay. This allows them to essentially subtract what they’ve paid in foreign income taxes from their US tax bill.
In a country like Sweden where taxes are generally higher than in the US, this usually not only eliminates your US tax liability — it also gives you surplus credits. You can then apply these credits toward future US tax bills on foreign income.
To qualify for the FTC, foreign taxes must be legal, based on income, charged to you specifically, and paid.
The Foreign Earned Income Exclusion
The Foreign Earned Income Exclusion (FEIE) lets Americans abroad exclude a portion of their foreign-sourced earned income from taxation. For tax year 2023, you can exclude up to $120,000 per taxpayer. In tax year 2024, that figure increases to $126,500.
To qualify for the FEIE, you must meet either the Physical Presence Test or Bona Fide Residence Test. Doing so also makes you eligible for the Foreign Housing Exclusion or Deduction, which allows you to exclude additional income based on qualifying housing expenses like rent, utilities, and more.
Reporting obligations
For many Americans, a move abroad can mean new or different reporting obligations. For example:
- Foreign Bank Account Report (FBAR): Americans with over $10,000 in foreign financial accounts must file an FBAR.
- Statement of Specified Foreign Financial Assets (Form 8938): Americans living abroad with over $200,000 in foreign financial assets on the last day of — or over $300,000 in foreign financial assets at any point during — the tax year must file Form 8938.
US expats in Sweden should be aware of the US-Sweden tax treaty and totalization agreement, which can affect how certain types of income are taxed and how social security contributions are handled.
US-Sweden tax treaty
The US–Sweden tax treaty allows the Swedish government to share US expats’ Swedish tax information with the IRS, as well as their Swedish bank and investment account details and balances.
Some Americans in Sweden will benefit from the treaty though, for example students, teachers, trainees, researchers, entertainers, sportsmen, and expats receiving dividends, interest, royalties, pension income, alimony, social security income, and child support.
Expats who can claim a provision in the treaty should do so by filing IRS Form 8833.
The US-Sweden totalization agreement
A separate agreement called a totalization agreement prevents US expats in Sweden from paying social security taxes to both the US and Swedish governments. Expats’ contributions made while in Sweden can be credited to either system.
Which country they pay depends on how long they will be living in Sweden for. If you work temporarily in Sweden (usually up to 5 years), you can continue paying into the US system instead of the Swedish system. Work credits from both countries can be combined to meet eligibility requirements for benefits.
