Adjustment of the Act on Special Income Tax for Persons Residing Abroad
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S argues that the law on special income tax for those residing abroad needs to be adjusted to meet a modern labor market and strengthen cooperation with Nordic neighboring countries 1. S emphasizes that the new Öresund Agreement is important to facilitate things for workers and companies 1. SD argues that the adjustment is necessary to maintain Swedish taxing rights, ensure fairness, and avoid loopholes 2. M wants to simplify and clarify the rules to ensure taxing rights 3 and argues that strong companies and innovations strengthen Sweden's economy 4. S argues that those who receive a marginal tax of 50 percent have an income of 560,000 kronor per month 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Marcus Andersson (S)
Madam Speaker! We shall debate the Committee on Taxation's report number 19 on the Act on Special Income Tax for Persons Residing Abroad.
Sweden has a modern labor market with a population that works in several different ways. We have workers who are on-site, and we have civil servants who work remotely. We also have, for example, a proportion of employees who are persons residing abroad who perform the work abroad due to employment or assignments in a Swedish company or at a foreign company's permanent establishment in Sweden. It is precisely for these that the Act on Special Income Tax for Persons Residing Abroad needs to be adjusted.
Madam Speaker! Sweden has a good cooperation with our Nordic neighboring countries, and there are a multitude of synergies that we can only benefit from when we work together on the international arena. It thus brings in tax revenues to Sweden and the respective countries when we act in this way.
Much of our Nordic region's strength is that we strive for a current and flexible labor market and have tax legislations that enable national and regional growth. On September 23, 1996, the Nordic countries signed a multilateral agreement to avoid double taxation for specifically income and wealth. It was a clear step into the modern labor market with the so-called Nordic tax agreement.
In a world of tariffs and nationalist movements, it is important that Sweden takes responsibility and continues with promotional cooperation to build agreements for precisely a flexible and strong regional labor market. There must be clear and modern tax legislation and provisions in internal law that ensure the taxation of incomes for which the states have been granted the right of taxation.
Madam Speaker! We Social Democrats have fought to get a new Öresund agreement in place. Now that it enters into force as of 1 January 2025, a new tax agreement between Sweden and Denmark, the so-called Öresund agreement, applies. The agreement applies to taxes on income from and including the income year 2025, that is, income that can be declared in 2026. The fight we waged and all the pressure we exerted have borne fruit.
Adjustment in the Act on Special Income Tax for Persons Residing Abroad
The Öresund region is an extensive labor market for Sweden and Denmark. The Öresund Treaty is important for everyone who works. In Skåne, for example, it is extra important. Sweden and Denmark need the Öresund region to be a leading light in the world and show how beneficial the community between our neighboring countries is for the economy, entrepreneurship, and the individual. This community also facilitates everyday life for those who live in the region and want to move freely between the countries.
In the year 2000, Swedes and Danes were given an exciting opportunity when the Öresund Bridge was inaugurated. Our countries' labor markets were further expanded in ways that one had only dreamed of. In 2003, the first Öresund Agreement was signed, which enabled the region's inhabitants to move freely, work and live in a way that had not previously been as relevant. The bridge became not only an infrastructure project and a landmark but also a metaphor for precisely a cross-border everyday life.
Madam Speaker! After a certain period, challenges and modernization needs arose for the Öresund Agreement. The commuters in the region had encountered various issues and bureaucratic hurdles. This was evident for many years, and we Social Democrats have fought to get a change in place.
The Öresund Agreement is an important issue in the Committee on Taxation for us Social Democrats. Sweden's residents have long deserved a new agreement. Therefore, we have pushed the issue since 2012. When we were in government, we took the initiative for a review and also initiated negotiations on a new agreement. We have also, under the current government, continued to be proactive for a new agreement.
With a clear tax agreement, we strengthen Sweden's competitiveness and make everyday life easier for ordinary people. The Øresund Agreement contributes to Sweden's investments and economy and creates more jobs.
The increased commuting is in line with the new Öresund Agreement. Since 2020, the number of commuters has risen gradually, and the full-year statistics of commuters reached 20,119 people in 2023.
With the agreement, we simplify things for both employers and employees. From now on, it also applies to those employed in the public sector.
Madam Speaker! The region's attractiveness and growth are important for Sweden and Denmark. With good and simple agreements, we strengthen the region and compete with other regions. This occurs in a world that is becoming increasingly interconnected and where the Öresund region has been and continues to be a flexible labor market. Then we can attract more competence and investments.
Much has happened in the Öresund region, and it will continue to do so. Therefore, it is important not to lean back and think that it is finished, that it is solved. We Social Democrats will continue to follow the agreement.
With the Öresund Treaty, we ensure successful cooperation in Sweden's immediate vicinity. It is the cornerstone for the region and the countries to be able to develop and create jobs. This supports employers and employees. It strengthens Sweden into the future.
Erik Hellsborn (SD)
Madam Speaker! Today we are going to discuss an adjustment in the Act on Special Income Tax for Persons Residing Abroad, also called SINK. The proposal may seem technical, but it concerns a fundamentally important issue: maintaining Swedish taxing rights when labor is hired by Swedish employers, even if the work is partially performed abroad.
Why was the change needed? Since 2021, we have disregarded the formal employment relationship and instead look at where the actual, economic employer is located. This economic employer concept ensures that persons hired to Swedish operations are taxed here.
The Swedish Tax Agency has, however, pointed out a loophole. If the hired worker is sent abroad for shorter periods, at most half of the working time during a twelve-month period, there is a risk that the income will fall completely or partially outside of Swedish taxation. The current proposal closes the loophole by clarifying that even this work, performed outside of Sweden's borders, shall be covered by SINK under the same time limit that already applies for employees in Swedish companies. This is particularly important in the Öresund region.
In the new Öresund Agreement, Sweden and Denmark have promised each other to ensure that the allocated taxing rights can actually be utilized. These adjustments are therefore needed for the agreement to function fully as intended.
It is largely a matter of justice. A Swede residing in Malmö and commuting to Copenhagen should not be treated worse than a Dane residing in Copenhagen and hired by a Swedish company in Malmö. Both contribute to the Swedish welfare when the work is actually performed for a Swedish employer.
Equal treatment is also crucial for competition neutrality. Otherwise, there is a risk of distortions that favor foreign staffing solutions over domestic ones.
According to the conducted impact assessment, only a small number of individuals are affected, primarily residing in Denmark. Therefore, the public finance effect is negligible. But the principle is all the more important; we must not open unnecessary loopholes that can be exploited on a larger scale in the future. Skatteverket's costs are limited to simpler information and IT adjustments, and no companies are burdened with new administrative requirements. It is, in other words, a surgical intervention that provides maximum legal certainty at minimal cost.
All referral bodies, including Svenskt Näringsliv, Skatteverket, and Försäkringskassan, have approved or submitted the proposal without major objections. In other words, there is a broad consensus that the proposal is both necessary and well-formulated.
The legislative change is proposed to enter into force on 1 July 2025, which gives employers reasonable time to adapt the routines. At the same time, we note that equal pay for equal work also means equal tax for equal work, regardless of where the working time happens to be located during shorter periods.
Madam Speaker! Through the current bill, we ensure that the Swedish tax legislation aligns with our international commitments, safeguards neutral competition, and maintains public confidence in the fairness of the tax system. The legislative change is small in scope but great in significance – for justice, for the tax base, and for the order in the Öresund region.
Crister Carlsson (M)
Madam Speaker! I would like to begin by moving to approve the Committee on Taxation's proposal in the report SkU19 Adjustment of the Act on Special Income Tax for Persons Residing Abroad.
In this matter, we seem to be fairly in agreement across party lines. What the Moderaterna strive for, where possible, is to lower taxes. So far, we have prioritized lowering taxes for ordinary wage earners. We lower the tax on work to motivate more people to take a job and so that ordinary people can keep more of their money. We lower the tax on ISK to encourage Swedes to save more and, for example, acquire a down payment for their home.
The Moderates and the Tidö parties, however, also always want to simplify, clarify, and not least remove harmful taxes. In this case, it becomes a simplification and a clarification. The background to the proposal is the new Öresund Agreement with Denmark, which entered into force in December 2024 and which sets requirements that Swedish law ensures the right of taxation for Sweden even in cases where work is performed in the home state or a third country.
According to the current SINK regulations, it already applies that certain work abroad shall be considered as work performed in Sweden. This does not, however, apply to hired labor, which is now being clarified. You live in Denmark but work temporarily for a Swedish company via a Danish staffing agency. You work remotely from Denmark, and with the new rule, Sweden can tax your income. It is therefore not sufficient that the work physically takes place outside of Sweden; if the connection to the Swedish employer is strong enough, it can still be considered as work performed in Sweden.
It is a matter of us in Sweden retaining our tax power in Sweden to finance school, healthcare, care, and much more. But could it be an idea and fair to lower the special income tax for those residing abroad? They do not enjoy the social benefits in the same way as we who live in Sweden. The proposal would then mean a tax reduction for approximately 90,000 people who are residing abroad.
A closely related treasure is the exit tax, which is well worth mentioning. In 2022, the Social Democratic government appointed a new inquiry to review the taxation of capital assets for persons moving abroad. And it is probably a qualified guess that when the Social Democrats talk about "looking at the tax," it means raising and not lowering it.
In 2023, this investigation was, of course, scrapped by the current government. The arguments against the exit tax are several: It scares away investors and companies. Sweden becomes unattractive when one cannot trust the state. Fewer investments in the country make us poorer and reduce tax revenues. It is actually morally wrong for the state to lock people into countries. The tax is levied on assets and not on income. Individuals' money is locked in the company's value; it is not money one has in hand. It locks up capital, and a strong economy with growth requires mobile capital where the money can be invested in new smart ideas.
Another aspect connected to this is that these rules must not complicate generational successions in family businesses, for example when children of entrepreneurs live abroad.
The tax reforms regarding ownership have created security that makes successful entrepreneurs choose to stay in Sweden. Tax on ownership in itself and not on return is enormously harmful for successful growing companies, as it can look on paper as if there are large values even though in practice there may not be liquidity to pay the tax with.
I read an article about how thousands of wealthy individuals have moved away from England since new rules were introduced involving high taxes on income and capital gains. Swedish advisors report an increase in home-moving among Swedes, which of course is good for us. Here, critics argue that the United Kingdom risks losing not only large tax revenues but also competence and investments.
Similar phenomena have been seen in Norway, but we have also had it in Sweden. When the taxes on inheritance and gifts and subsequently the wealth tax were abolished, it was to lure successful entrepreneurs back to Sweden. The really big advantage that arose is that entrepreneurs, who are often smart innovators, stay or come back to Sweden to develop their companies or start new ones. They invest their competence and their capital in their companies here, which creates jobs and prosperity. That can never be wrong, can it?
Those who argue that it would be a problem that Sweden has gained more successful entrepreneurs should answer how Sweden would become better if these left the country. Let us not create this problem here in Sweden again!
Marcus Andersson (S)
Madam Speaker! I would like to begin by saying that it is fascinating and amusing that we are standing here debating precisely the arguments surrounding tax cuts and such matters.
I believe that the majority of Sweden's population, that is, a quite large proportion, think that these are very tough times now. They may not quite share the view that the tax cuts that Member Crister Carlsson is standing here and expressing himself so grandly about will trickle down to those who can hardly afford food today. I would therefore like to ask the question to Member Crister Carlsson and the Moderaterna how they intend for the tax cuts to actually contribute to making the average wage earner's finances add up.
Crister Carlsson (M)
Madam Speaker! Thank you for the question, Marcus Andersson! This is an eternal discussion we have between the parties.
I believe, just as I say, that by strengthening companies and innovation and bringing in innovators – who can often be wealthy – one strengthens the entire Swedish economy. We get a larger cake to share. That is what we must strive for. Sweden's economy must become larger.
The Social Democrats talk all the time about the rich, and I wonder who the rich actually are. The Social Democrats, for example, do not want to raise the threshold for state income tax. Many who work in healthcare fall above that limit. For example, nurses who have further education and a relatively high salary and who work a lot of overtime will exceed the threshold.
Does Member Andersson think those people should be paid even more in tax money? One person, for example, might leave their family on Christmas Eve morning so that the children can celebrate their Christmas by themselves, and then receives a little overtime and money in hand. Should that person not then be allowed to keep at least half in their wallet?
TREDJE VICE TALMANNEN
I remind the members that this debate is about special income tax for those residing abroad.
Marcus Andersson (S)
Madam Speaker! My intention was not to stand up and have an exchange of remarks with Member Crister Carlsson regarding the committee report, but I could not help myself when he raised the general political tax issue in his speech. I felt that I still wanted to address it.
I am myself employed in healthcare, Crister Carlsson, as a support assistant within a municipal operation. I share your view to some extent on certain issues, but unfortunately perhaps not particularly much regarding tax policy. What is a bit interesting is that you touched upon high taxes when you specified how and who would receive the tax cuts. We have several different representatives out there talking about, for example, marginal taxes. A report recently came out on how high an income one must have to be subject to a marginal tax of 50 percent, and it turns out that one is then up to 560,000 a month. That is what the latest statistics show. Yes, listen and be amazed! That is with the tax reductions that exist.
There is a very interesting report that one can access. Now I have lost the name of it, but it is certainly possible to google what the report is called.
I do not know if we really share the same view of the statistics that exist. There are a number of different reports and surveys that show that if tax cuts were to generate additional jobs, it is not directly a winning factor in this issue.
Once again: The Moderates and the Sweden Democrats have consistently misjudged the situation. Unemployment has now risen, and they cut back on labor market policy measures. What they wanted to do was to lower the tax for the very richest.
TREDJE VICE TALMANNEN
A reminder of the subject of the debate is obviously something that one may need to provide several times. Furthermore, I remind all members that the address in the chamber is that everyone speaks via the Speaker. I usually overlook a single instance, but if there are very many, I tend to point this out.
Crister Carlsson (M)
Madam Speaker! I heard no real question from Member Andersson. I would like to ask him a question.
In his speech, he said that the Social Democrats have exerted pressure regarding the Öresund Agreement and that S has fought for it. Then I have to think and wonder. Why hasn't it happened during the eight years when the Social Democrats sat in government? Why hasn't it happened earlier?
Adjustment in the Act on Special Income Tax for Persons Residing Abroad
(THIRD DEPUTY SPEAKER: This may be seen as a rhetorical question as it was a closing remark.)
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.