Economic Employer Concept Introduced in Sweden

The economic employer concept has been implemented in Sweden for the year of 2021. In previous labor regulations, taxes were not applicable to non-Swedish employees who were receiving remuneration from a non-Swedish company. Under this newly adopted scheme, employers are viewed not as the source for employee remuneration, but merely as the company under which labor is carried out.

This regulation does not impact employees who have not worked in Sweden for more than 15 consecutive days, or 45 days in a year. Salaries of employees who work beyond the specified period will be taxed in reference to the economic employer concept.

Employer Considerations:

Employees salaries/wages may be subject to the taxation of the host country in which they work, even for provisional or short-term assignments. Employers must review the economic employer concept provisions to determine employees that are taxable in Sweden. Sweden registration may be necessary for foreign employers.