(edit title) UK Citizen Contracting in Sweden Tax Advice on the 183 day rule? Options

[CCFC123]

Hello,
I have been offered a position contracting in Sweden working for a large automotive company working through a Swedish agency.
They have told me it is legal to work in Sweden for the first 183 days and Invoice and be paid to my UK Ltd Company bank account as long as I pay my Tax and N/I in the UK and complete relevant forms with the Swedish and UK Tax authorities.
Any advice on this would be welcome I want to ensure I am fully legal while working in Sweden also any advice on any expenses for travel and accommodation I could claim and a ball park figure on % total tax/social security deduction.

Thanks in Advance JP

[Yorkshireman]

Sweden has the 183 day rule, you are not liable to pay any taxes in Sweden during that time, but must in the UK. Deductions are whatever you can make in the UK.

Note: 183 days counting is days in Sweden, and travel in/out days are counted as whole days.

If You stay over the 183 days, even by 1 day, You will be liable to Swedish taxes on income, and it will be back dated to the very 1st day you came into Sweden.

[Bender B Rodriquez]

Also, shorter stays abroad are counted, i.e. if you work in Sweden for two weeks, stay abroad for one week and come back for two weeks, then the time abroad will still count as time in Sweden.

[CCFC123]

Hi Yorkshireman thanks for the quick reply from what you are saying if I was to stay in Sweden past 183 days my previous earnings paid into my UK Ltd would be retrospectively taxed as if I had always been in the Swedish Tax System from day 1?

Thanks JP

[Yorkshireman]

If You come into Sweden and work past 183 days they retrospectively tax you back to the 1st day you entered Sweden. You will be classed as a Tax resident, and therefore taxable on Global Income.

And remember, to stay past 3 months You need to register your right to reside with Migrationsverket.

[CCFC123]

Thank you all for you replies.
Does anyone know what total deduction of my gross payment of approx 75,000 Skr per Month I could expect to pay in Tax/Social as a % and if I can claim for my accommodation cost if I was to become resident in Sweden but maintaining my UK home?
I have spoken to a few umbrella companies and have been given some conflicting information also there monthly charges seem extortionate at up to 6,000 Skr per Month.

Thanks Again

[johnjohn]

If you are paying your own social contribution and tax it will add up to just under 50 percent. Rather doubt you can deduct housing as an expense, an office perhaps. On 75000kr per month roughly 35000 tax/social 40000kr for you this being without any deductions.

[Bender B Rodriquez]

Thank you all for you replies.Does anyone know what total deduction of my gross payment of approx 75,000 Skr per Month I could expect to pay in Tax/Social as a % and if I can ... (show full quote)

Thank you all for you replies.
Does anyone know what total deduction of my gross payment of approx 75,000 Skr per Month I could expect to pay in Tax/Social as a % and if I can claim for my accommodation cost if I was to become resident in Sweden but maintaining my UK home?
I have spoken to a few umbrella companies and have been given some conflicting information also there monthly charges seem extortionate at up to 6,000 Skr per Month.

Thanks Again ... (hide full quote)

Social security on 70k is 70k*0.75*0.2875=15k, which leaves you with 55k before tax.
55k before tax is 36.3k in the pocket in Stockholm, i.e. your total tax+social security is 48%.

EDIT: On 75k it is roughly the same percentage.

[Somebody]

Sweden has the 183 day rule, you are not liable to pay any taxes in Sweden during that time, but must in the UK. Deductions are whatever you can make in the UK.Note: 183 days ... (show full quote)

Sweden has the 183 day rule, you are not liable to pay any taxes in Sweden during that time, but must in the UK. Deductions are whatever you can make in the UK.

Note: 183 days counting is days in Sweden, and travel in/out days are counted as whole days.

If You stay over the 183 days, even by 1 day, You will be liable to Swedish taxes on income, and it will be back dated to the very 1st day you came into Sweden. ... (hide full quote)

That's Ain't Right.Up to 183 days you don't pay taxes on your income outside Sweden, but you do pay taxes
on money made in Sweden. I do not know how it works when contracting as Ltd Company registered in another EU country, though.

[Taxalien]

What are your plans for the future?

If you are really just interested in a short contract, but don't know if you would like to stay for longer, then just open up a branch here in Sweden.

Now, if you don't need to claim any money in salary or dividends, then you will pay 26.3% in tax, and what is left over could then be transferred back as a dividend to your parent company. Any salary you take out, would be taxed 100% within the Swedish tax regime, but the 183 day rules etc would not be any concern for you. You would be in control and if you overstayed it would not matter to you.

Later on, if you return to the UK, you would close down the branch, having satisfied all tax procedures for the branch from a Swedish corporate taxation point of view, and you are then free to pay yourself dividends as you would have done had you been working in the UK all the time. Since dividends are virtually tax free up to the limit where higher taxes are applied, it would probably leave you with a higher net take than if you went with any other scheme here.

Swedes reading this should also note that if you do this with a UK limited company and happen to be dual citizenry with the UK, then according to the double taxation treaty there can be no taxation of capital gains or dividends if you have severed ties with Sweden and live in the UK, because the 7 year rule does not apply to UK citizens.

TA

PS! Dividends paid from the branch to your Ltd company are not double taxed.

Having just done this myself, I can say that the only issue with a Ltd company is getting a bank account. That is a pain in the neck. Everything else, like dealing with Swedish tax authorities is a breeze.

[Glennn Dobbs]

Which of these is best route to follow.

Scenario 1
I will be taking a 6 month contract in Sweden this month, renting temp accomodations while maintaining a UK residence. I will be billing a UK agency for via my limited company (VAT registered). Not planning to stay past 183 days. I think this means I add VAT to agency invoices.

What is my tax liability 25% flat is the claimable against Corporate tax paid in the UK ?

The money will reside in a UK account and be withdrawn there so I assume this that is not considered income. Obviously money needs to be xfer'd to UK to pay my expenses there. nIs there a more efficient way to handle this to avoid doubel currency charges.

Scenario 2
The client pays my UK company directly how do I address the VAT issue ?
What is my tax liability.

Scenario 3
Umbrella Company kind of ugly - I get the impression these guys are bottom feeders and this will be the most expensive method

Is the 183 day rule permament - if I ever return would I immediately be tax resident ? Already there is talk from the client of extending this role which I have no intention of doing.

[Taxalien]

183 days counted over a rolling 12 month period. Note that they don't count it as you might expect it to be counted. If you spend most of your time here, they will count the weekend too. To avoid the 183 days coming up, you'd have to be very much under the radar. Which might work, I don't know.

I would rule out any umbrella companies. Just read the fine print once and you'll see that they don't offer you anything in return.

I am contracting via a UK ltd with a registered branch in Sweden. It is in my opinion much safer than any other construct you can come up with. It means that you can control the tax liability as time moves on - meaning, if you are happy and want to extend you can. All you pay tax on is what you pay yourself in salary and dividends. Everything else can be kept in your company construct. This means eg. if you stay 1 1/2 years or more, that you can save up the money you are making and then pay it out as a dividend later to your Ltd company parent, when you have left Sweden. From that point onwards, when you are outside of the tax jurisdiction of Sweden you can pay out the stuff as if you had been working in the UK normally.

Only one thing is complicated with a branch. Getting a bank account in Sweden.

Suggest you seek professional advice if you have already started and if you have other complicated items not mentioned here.

[oddsock]

Honest question: How do they check how many days you are in each country?

[Bender B Rodriquez]

Well, in practice they can not really check that at all. If they have reason to believe foul play they can of course do a private investigation, but they do not have access to e.g. your bank transactions unless it becomes a police matter.

One thing that is possible though is that they sometimes use information gained from other sources, e.g. material from credit card issuers or frequent flyer programs collected in other tax investigations.

In practice, it is only high profile individuals that are the targets of such investigations. For example, wealthy Swedes that pretend to move abroad for tax reasons, but still conduct their business in Sweden.

[Taxalien]

The OP is travelling crossing Schengen all the time. Of course there is a track record. They don't need a private investigator in this case, it will be on record.

The money trail will go from the service buyer here, back to the agent and then to the Limited company.

And agent will have to be Swedish VAT registered.

Germany did very well investigating these issues. I would be very surprised if they are not going to try to emulate that success here in Sweden one day, especially considering the recent treaty signed with the Swiss.