(edit title) Taxation whilst living in a 3rd country Double taxation? Options

[bobthedog]

Does anyone know the rules about income tax whilst working abroad ?

I live and work in Stockholm and may be soon moving to a 3rd country (non EU) to work ) for an extended period. I have a swedish person number, bank account etc and a bostadsrätt. I have no income in SE apart from my salary which, when I move, will cease. I will be liable for income tax in the new country. I am a UK citizen.

I intend returning to SE in the future.

Question is will I be liable for SE income tax on income earned abroad ? I will declare 0 SEK next year (which will be true) and I know this makes the skatteverket suspicious. I have heard that it may be necessary to sell any assets in SE to demonstrate that all links are severed, but I don't want to do that.

Does anyone have experience of this situation ?

Thanks

[Yorkshireman]

Right now You are considered a Taz Resident of Sweden, so before You leave make sure You notify Skatteverket that You will be leaving the country for a long period (ie. de-register) otherwise You will be potentially liable for Swedish Income Taxes as Sweden taxes GLobal income for Tax Residents. However, it also depends if they have double tax agreement with the country You are moving to.

From Skatteverket:
For tax purposes, you are considered a resident of Sweden and are to declare income tax in Sweden if you retain some ties, for example
• if your spouse and children still live in Sweden
• if you keep your home in Sweden
• if you still have a company in Sweden.

[Yorkshireman]

I will declare 0 SEK next year (which will be true) and I know this makes the skatteverket suspicious.

By next year do You mean tax year 2012, declared 2013 ?

If You sell Your bostadsrätt, You will have to declare that.
If You sub-let Your bostadsrätt You have to declare that also?

[Bender B Rodriquez]

If your stay abroad is temporary, or if you keep any connections with Sweden (children, spouse, house, significant economic interests), you will pay Swedish tax but can deduct paid foreign tax.

If you live and work abroad for more than 6 months and pay foreign income tax you will not need to pay Swedish tax according to the 6-month rule.

If you live and work abroad for more than 12 months you will not need to pay Swedish tax according to the one-year rule even if you do not pay foreign income tax.

The above rules require that you work for a certain amount of time in your country of residence, so some areas like aviation, cruises and off-shore oil cannot enjoy the 6-month or one-year rules.

In all cases above you still need to declare your foreign earnings every year.

[Yorkshireman]

In all cases above you still need to declare your foreign earnings every year.

Actually, if You are not Swedish resident, and have given notice to Skatteverket You are moving out of the country, You have no obligation to do Tax Declaration. This is assuming You tell them in advance You will be away for 12+ months.

However, You will have to complete a declaration if You receive any income, work or capital income sourced in Sweden during the time You are away. Non-Tax Resident.

And almost forgot the "10 year rule":

An person who is not considered as a resident of Sweden is liable to tax on capital gains on disposals of or income from properties and apartments situated in Sweden. Furthermore, a Swedish resident who moves out of Sweden is liable to tax on capital gains from the disposal of shares and similar securities in Swedish corporations and foreign shares and similar securities that were purchased before their departure from Sweden for a period of 10 years after departure. Swedish tax claim may be limited by any tax treaties that exist.

[bobthedog]

Both. Thanks for the replies. I've now checked the skatteverket information and it seems fairly clear; I will take advantage of the 6 month rule. I'm only really concerned about income tax at the moment; any tax on BR income will just have to be paid, as would any capital gains tax should I sell (which I'm not planning to do).

[Bender B Rodriquez]

Actually, if You are not Swedish resident, and have given notice to Skatteverket You are moving out of the country, You have no obligation to do Tax Declaration. This is assum ... (show full quote)

Actually, if You are not Swedish resident, and have given notice to Skatteverket You are moving out of the country, You have no obligation to do Tax Declaration. This is assuming You tell them in advance You will be away for 12+ months. ... (hide full quote)

Nope, not true. As long as you are "obegränsat skatteskyldig" you have the obligation to report your earnings.

You are "obegränsat skattskylding" if you keep any connections with Sweden, even if you are not Swedish resident anymore. Just moving away for 12+ months is not enough. Up to 5 years from your departure it is up to you to show that you don't have any connections.

[Yorkshireman]

You are "obegränsat skattskylding" if you keep any connections with Sweden, even if you are not Swedish resident anymore. Just moving away for 12+ months is not enou ... (show full quote)

You are "obegränsat skattskylding" if you keep any connections with Sweden, even if you are not Swedish resident anymore. Just moving away for 12+ months is not enough. Up to 5 years from your departure it is up to you to show that you don't have any connections. ... (hide full quote)

That only counts if You are a Swedish Citizen or have been a Swedish Resident for 10 years or more. If You are neither, then if You have cut ties, Your tax liabilities with regards Global Taxation cease when You leave the country ... as long as You have notified them.

[Somebody]

So what happens if I am in Sweden for less than 6 months?
I guess I will only pay the tax from my Swedish income.Is that right?

Is it 6 consecutive months which count or 6 months in a tax year?
e.g. if I come here in October and leave in March of following year it is only 3 months in each of the tax years.

[Yorkshireman]

There is a specific concession available for non-residents working in Sweden.
Non-residents may be taxed at a flat rate of 25% with no deductions
applying. The 25% tax is withheld by the employer and is the final tax due on
income.

In order to benefit from the 25% flat rate (known as SINK) an application must
be filed with the Local Tax Authority in advance, normally by the Swedish employer. There is normally no obligation to file an annual income tax return if you only
have income from Sweden that is subject to a “SINK-ruling” . Non-residents working
in Sweden and receiving the main part of their employment income from Sweden may
choose between being taxed according to the resident or non-resident rules,
implying that certain deductions are available.

The 6 months is not per tax year, it is 6 months within 12 month period. So in Your example, it would cross 6 months (183 days), and they would count You as a Tax Resident, and backdate the taxes on income to the 1st date of entry of the 6 months. And You would not be able to claim the withholding tax rate of 25%.

[Somebody]

Thanks a lot