The Swedish tax system - a brief introduction

Tax for commuters - SINK

If you are commuting daily between your residence in Denmark and your place of work in Sweden, you usually have limited tax liability in Sweden. You should apply to pay SINK tax (special income tax for non-residents) - a special gross income tax of 25 percent. SINK tax is a direct flat-rate tax, so you are not entitled to any deductions, nor do you need to submit a tax return at the end of the year. You must apply for SINK taxation every year before the end of the year.

As a daily commuter, you have the option of choosing to be taxed according to ordinary Swedish income tax system. In this system, the tax rate depends on your income level, you are entitled to deductions, and you must submit a tax return form. In order to access the full range of deductions, at least 90 percent of your yearly income has to be taxed in Sweden.

Standard Income Tax in Sweden

If you live in Sweden or stay regularly you have unlimited tax liability. You count as staying regularly if you are in Sweden six consecutive months or more - short term departures from Sweden do not interrupt your stay. When you have unlimited tax liability in Sweden, your salary and other income of service shall be taxed according to ordinary income tax, A-tax, and you are required to file an income tax return every year, stating all your income.

Your tax rate will be determined according to your income level. You will pay average municipal tax and national tax if your income is higher. You are required to file a tax return every year, and you are entitled to deductions. 

As a daily commuter, or if your stay in Sweden is less than six months, you can choose to be taxed according to standard income tax regulations rather than SINK tax. You are then entitled to deductions such as travel to and from work.

If a minimum of 90 percent of your overall earned income during the year originates from Sweden, you are also entitled to personal deductions, such as standard tax allowance and earned income tax credit.

You should be aware that the Danish tax rules can also affect your deductions. For example, you are only allowed deductions for paid interests if you were not able to deduct them in the Danish taxation.

To choose taxation in accordance with standard tax regulations, use the same e-service as when you apply for SINK – You can choose to pay A-tax by stating it when answering the question in the form about how you would like to be taxed.

Read more about declaring taxes on Skatteverket's website

Read more about SINK - Special income tax for foreign residents on Skatteverket's website

Tax when working from home

As a main rule, salary is taxed in the country where you performed the work. But accordin to a special tax treaty between Sweden and Denmark, the Øresund Tax Agreement, your salary will continue to be taxed in Sweden even if you occassionally work remotely from Denmark or on temporary business trips, if certain conditions are met. From 2025 onwards, the Øresund Tax Agreement also applies for employees at public institutions.

Read more about tax when working remotely

Taxation of a Swedish company car

If you commute and pay SINK tax, you pay 25 percent tax on the value of the benefit of having access to a Danish or Swedish company car. On the other hand, if you pay ordinary Swedish tax, you pay tax on your company car at the tax rate your other income is taxed at.