Taxes in Sweden are one of the highest in the world. For example, the income tax rate is close to 30%, and it is only for those who receive relatively little income.
Income tax of legal entities
Annual gross income from commercial activities is taxed at 22%.
Employer Insurance contributions
Besides wages, an employer must pay income tax (inkomstskatt) and insurance (social) contributions (arbetsgivaravgifter) for all employees. These monthly payments are paid to the Tax Service.
Rate of insurance contributions in 2013:
15.49% of the gross wages of employees born in 1987 or later;
10.21% – for those born from 1938 to 1947;
0% – for those born in 1937 and earlier;
31.42% – for all others.
Personal income tax
When applying for a job is signed an employment contract with the employer, which contains the employee’s gross salary, without deduction of income tax. The employer deducts the money from the earnings to pay income tax, then the rest of the money is paid to the employee, which thus receives a net salary.
Annual gross income up to 18,200 SEK income is not taxed.
With an annual income ranging from 18,200 to 413,200 SEK should be paid council tax (the tax rates are different in different municipalities, they are generally 29-35 percent of gross salary).
With an annual income of 413,200 to 591,600 SEK should be also paid council tax (25 percent of salary in excess of 413,200 crowns a year). If income exceeds 591,600 SEK will charge an extra tax of 5 percent of the amount exceeding 591,600 SEK.
These data are valid for 2013.
Entrepreneurs also pay taxes on the basis of the amount that they can make preliminary estimates for the year. Taxes are paid once a month.
In Sweden, most goods and services are subject to VAT at 25 per cent. Some goods and services have a reduced rate of 12 percent: food (except alcoholic beverages), restaurants, hotels and campgrounds; 6% – are newspapers, books, movie tickets and theater, passenger transport, travel, concerts and sporting events.
Some services are not subject to VAT, such as: health, dental, medical and social care, education, banking, private insurance policies, rents of housing.
Excise taxes and fees
These are additional taxes on certain types of goods, such as alcoholic beverages and gasoline. State decides which goods are subject to excise duties. Mostly often, this is the products, dangerous to the environment or health.
Excise taxes and fees charged for the following products:
• fuel (gasoline, oil, coal and liquid gas);
• alcoholic beverages;
• tobacco and tobacco products.
The tax declaration must be submitted to the Tax Service annually no later than May 2. Internal Revenue Service receives information about the income of citizens during the year from the employer, insurance companies and banks.
Internal Revenue Service sends a declaration to the postal address of the taxpayer, which is necessary to check the accuracy of this data in it. Then it can be signed by acting in different ways:
• Put a handwritten signature and send a declaration to the Tax Service.
• Send a text message on a cell phone.
• Call the Internal Revenue Service.
• Make a declaration over the Internet using the code on the form.
• Make a declaration via the Internet with an electronic signature (e-legitimation).
Tax on a TV set
In accordance with Swedish law, all owners of television sets are required to pay a license fee for radio and television. This tax levy is the basis for funding “Swedish Television” / Sveriges Television AB (SVT), “Swedish radio” / Sveriges Radio AB (SR), “The Swedish educational radio” / Utbildningsradion (UR).
In 2013, the license fee for a TV set was 2,076 SEK per year.