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Introducing... Your finances in Stockholm

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Swedish kronor bills. Use 'em while you can.: Shutterstock
17:23 CEST+02:00
So you're moving to Stockholm and wondering how much the Swedish taxman may take from your paycheck. And what about those rumours that cash and coins are falling out of favour? Don't sweat it, opening a bank account in Sweden will make your life easier than you think.

I'll soon be moving to Stockholm and I've just taken all the Swedish kronor that my local bank had available. Now I'm hearing talk of a cashless society. Won't I be able to use my notes and coins?

It's certainly true that Stockholm is further along the road of 'decashification' than pretty much every other city in the world. Some 73 percent of retail payments are made with plastic and you can even pay street vendors of the city’s charity magazine with your credit card. But don't worry: you can still use paper and metal in most places.

Wait a second. 'Most places'? Where can't I use cash?

Most buses. And, strangely enough, many banks.

So much for Money, Money, Money.

I wondered how long it would take before that cropped up. But you'd do well to consider a lyric that didn't make it to the final cut of the song:

You work all night
You work all day
You'll need a bank
If you're to stay…

What Benny and Björn were trying to say is that for many administrative reasons beyond paying bills, a Swedish bank account is essential. But first you will need a personal number (personnummer) and a few other bits of documentation. Get in contact with the Swedish Tax Office to get it sorted. Now.

Can’t I just pay my bills using my existing foreign bank account?

That's perfectly possible through Forex, but you'll have to pay a fee. There is good advice on how to do this at visitstockholm.com/moving-to-stockholm/.

Let's talk about tax.

Must we?

Yes.

OK. Sweden has a very efficient system for paying taxes, with perhaps some of the most helpful 'customer' service in the country. Most of your annual return will be taken care of automatically and if everything's in order you'll just have to send the authorities a text message to confirm your statement. How, and how much, you pay, depends on how long you are staying in Stockholm.

So how much will I have to pay?

Ah, the million kronor question.

A MILLION KRONOR??? I don’t mind high taxes but that’s ridiculous!

Sorry, bad choice of words.

But let's be honest about this: taxes are high in Sweden. The income tax rate is usually around 30 percent and the standard VAT rate is 25 percent. But someone has to pay for the (almost) free healthcare, daycare and university education. And, of course, if things don't go to plan, the unemployment insurance scheme is generous.

That’s great. But I’m not planning to be here forever. Why do I have to pay for all of that?

Well, perhaps you don’t. If you’re only here temporarily – and if your job falls into certain categories such as executives, scientists and other experts – then you may be entitled to pay tax on only 75 percent of your income.

Some paperwork is required and rules do apply so make it your business to find out if you are entitled to this perk.

So where should I start?

With some proper advice from the good people at the City of Stockholm and total commitment to getting to know your new best friend – your personal number.

This article was produced by The Local in association with Stockholm Business Region.

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