Expat Tax Advice for Americans Living in Sweden

Sweden is an increasingly popular expat destination, as the lush landscapes please the eye and the progressive, forward-thinking culture expands the mind. But Sweden boasts some of the highest tax rates in the world. Don’t miss this expert expat tax advice on filing taxes in Sweden and the US.

Although Sweden offers some of the best social programs in the world, it also has some of the highest tax rates. As a US expat, you’ll need to be sure you know the tax laws for both your host country and your home country. Fortunately, we’ve outlined the 8 things you need to know as an expat living in Sweden.

1. Tax Rates in Sweden

Sweden’s universal health insurance, subsidized childcare and free university tuition aren’t without a price. Employees are taxed up to 25% on their income as well as 29 to 34 percent as part of a municipality tax.

2. Residency in Sweden

For tax purposes, individuals who live or regularly reside in Sweden are considered residents. Residents of Sweden will be taxed on worldwide income versus non residents who are only taxed on income from Swedish sources.

3. Swedish Tax Deadlines

Like the US, the tax year in Sweden is from January 1st to December 31st. All tax returns are due by May 2nd of the following year to the Swedish Tax Agency.

4. Swedish Taxes on Foreign Income

Residents of Sweden are required to pay taxes on worldwide income, while non-residents only pay taxes on income from Swedish sources.

5. Social Security Taxes in Sweden

Income tax rates in Sweden tend to be higher than most other countries due to the extensive list of social security programs. In addition to high taxes, employees are required to make a contribution of up to 28,900 Swedish kronor for social security.

6. Other Taxes in Sweden

Sweden also has a value added tax on all goods and services. The standard rate is 25%, although some reductions on food and certain tourism industries may apply. There is also a 30% tax on capital gains.

7. Foreign Bank Account Reporting for Americans in Sweden

If you are a US citizen or resident, you will still be required to file a US tax return each year if your income is above the threshold. If you have assets in foreign bank accounts, you may be required to report those as well. Specifically, anyone with $10,000 dollars or more in a foreign bank or financial institution during a calendar year will be required to file the FBAR.

8. Filing US Taxes in Sweden

Fortunately, there are a few ways you can lower or eliminate your US tax obligations. The first is the Foreign Earned Income Exclusion, which allows you to exclude a certain amount from your foreign earned income on your US expat taxes.

The second is the Foreign Tax Credit, which allows you to offset the taxes you paid in your host country with your US expat taxes dollar for dollar.

And third is the Foreign Housing Exclusion, which allows an additional exclusion from income on US expat taxes for certain amounts paid for household expenses that occur as a consequence of living abroad.
If you have any questions about filing your US expat taxes, please contact us.

Want more expat tax advice while living abroad?

For more information on your expat tax obligations while living abroad, download one of our free, in-depth guides that provide targeted information that is most relevant to your personal situation.

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