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Living in Sweden and working remotely (EU/USA)

Can I telecommute from Germany or US?

Paul Troon
post 4.Sep.2012, 12:34 PM
Post #1
Joined: 4.Sep.2012

My wife and young son have Swedish citizenship, and I am a resident/citizen of the USA. We would like to move back to Sweden from Wisconsin when our son starts school.

Getting Swedish residency for me is no problem, but I would like to stay with my current US employer and work remotely in Sweden.

My employer will allow me to work remotely, but it is a small company (20 people) and establishing a business presence in Sweden is out of the question. I am considering various options and would be grateful to to hear from anyone who has been in a similar situation.

My company has a small office in Germany and I could transfer to that office instead if having an EU employer would help. If I worked for a Germany company, could I live and work remotely from Sweden with out establishing a Swedish business entity? My wife used to work in Copenhagen and live in Malmö as a normal employee, so in theory it seems possible.

I know I could find a job in Sweden also, but I have a big personal investment in my current employer and if they are willing to allow me to work from Sweden it would be the ideal situation for us.

If someone can recommend a good international immigration and/or personnel lawyer with experience in both the EU and Sweden that would also be much appreciated. I do not want to do anything that would jeopardize my ability to live with my family in Sweden.

Tack så mycket! paul
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byke
post 4.Sep.2012, 12:38 PM
Post #2
Location: Europe
Joined: 28.Oct.2008

Why on earth would you want to move so that your child to attend school in Sweden?
Education in Sweden isn't worth the paper it's printed on.
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Bender B Rodriquez
post 4.Sep.2012, 12:50 PM
Post #3
Joined: 25.Mar.2006

Dear Paul,

Never mind byke; he rarely gives any meaningful input to this forum anyway.

The most important part is to arrange so that the employer does not pay any foreign tax for you. Instead, you are responsible for paying Swedish Social Security and income taxes. You get to keep about half of your total salary. Take that into account when negotiating with your employer. Doing all the tax payments yourself will save you a lot of trouble.

Another option, that is rarely approved by the tax office in the case of a single employer/client, is to become a sole trader and bill your client.

There could be benefits of transferring to the German office, but I'm not qualified to make any comment on that.
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mångk
post 4.Sep.2012, 01:05 PM
Post #4
Joined: 27.Jul.2008

The problem with the Germany idea is that you may need a work permit for Germany.

The easiest solution may to do as you plan and work remotely. It should not impact on a residence permit in Sweden based on family ties but may however make it a more complex procedure.

There is a dual-tax treaty between US and Sweden:

http://www.irs.gov/pub/irs-trty/sweden.pdf

Take note of the technical explanation:

http://www.irs.gov/pub/irs-trty/swedente06.pdf
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PDX
post 4.Sep.2012, 01:27 PM
Post #5
Location: Stockholm
Joined: 2.Aug.2011

Indeed this is possible and there are several different options as to how you can proceed. First, hire a professional tax advisor that specializes in inter/intra-EU/US/expat -taxation. You can find experts on this subject matter at any of the Big Four companies:

http://en.wikipedia.org/wiki/Big_Four_auditors

~~~PDX~~~
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Paul Troon
post 4.Sep.2012, 03:28 PM
Post #6
Joined: 4.Sep.2012

Thanks for the suggestions Bender - if I could handle the interaction with Skatteverket myself that would be easiest. My employer's biggest concern will likely be Sweden coming after them for unpaid employment taxes at some point so I'd need to find the right way to do this. I didn't know there was a category for single employer/client consultancy; sounds like a long shot but that would be the cleanest way to go if it was approved.

Good point Mångk about needing a German work permit. I ought to be able to get one as a Swedish(EU) resident, but there is problem if I can't work immediately upon becoming a resident in Sweden.

PDX recommends a big-four tax adviser, which seems sensible, but my past experience with big-four consultancies as a small time sole proprietor has not been positive. I'd rather find a smaller scale operation where I could get some personal service.

Does anyone have first hand experience with an intra-US/EU/SE tax adviser? Big-four or otherwise.

paul
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Paul Troon
post 4.Sep.2012, 03:38 PM
Post #7
Joined: 4.Sep.2012

QUOTE (Bender B Rodriquez @ 4.Sep.2012, 12:50 PM) *
Another option, that is rarely approved by the tax office in the case of a single employer/client, is to become a sole trader and bill your client.

One more question - what would be the Swedish term for a sole trader with a single employer/client? I'd like to get more information from Skatteverket on this. Thanks!
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Bender B Rodriquez
post 4.Sep.2012, 03:53 PM
Post #8
Joined: 25.Mar.2006

QUOTE (Paul Troon @ 4.Sep.2012, 04:28 PM) *
Thanks for the suggestions Bender - if I could handle the interaction with Skatteverket myself that would be easiest. My employer's biggest concern will likely be Sweden c ... (show full quote)

If the employer does not have a permanent Swedish establishment, they will not face any risk of paying Swedish tax; it is entirely your responsibility.

http://www.skatteverket.se/otherlanguages/...8680006199.html

However, the definition of "permanent establishment" is quite fuzzy and you would need professional advice if your business constitutes a "permanent establishment" or not:

http://www.skatteverket.se/otherlanguages/...b800094764.html
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Bender B Rodriquez
post 4.Sep.2012, 04:13 PM
Post #9
Joined: 25.Mar.2006

QUOTE (Paul Troon @ 4.Sep.2012, 04:38 PM) *
One more question - what would be the Swedish term for a sole trader with a single employer/client? I'd like to get more information from Skatteverket on this. Thanks!

Sole trader is "enskild firma" in Swedish.

If you only have a single client the tax office will not approve to run a business. You must have several clients, otherwise it would be easy to circumvent employment laws by being a sole trader instead of an employee.
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mångk
post 4.Sep.2012, 04:19 PM
Post #10
Joined: 27.Jul.2008

QUOTE (Paul Troon @ 4.Sep.2012, 04:28 PM) *
Good point Mångk about needing a German work permit. I ought to be able to get one as a Swedish(EU) resident, but there is problem if I can't work immediately upon becoming a resident in Sweden.

Given your wife is a Swedish citizen and that you would be applying for a residence permit based on family ties to a swedish citizen you will receive a residence & work permit for Sweden. So will be able to work in Sweden once registered.

The key question is whether or not an employee of a foreign company who is working remotely from a home office based in Sweden when the foreign company does not 'conduct business in Sweden' is considered in the same manner as one that does.

That is where following the advice of PDX would be advisable.
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California Girl 3
post 4.Sep.2012, 04:39 PM
Post #11
Joined: 18.Aug.2009

QUOTE (Paul Troon @ 4.Sep.2012, 03:28 PM) *
Thanks for the suggestions Bender - if I could handle the interaction with Skatteverket myself that would be easiest. My employer's biggest concern will likely be Sweden ... (show full quote)


As someone else mentioned, Sweden won't go after the employer for the "social avgift" if you are a regular employee of the company, but they will expect you to pay this tax and the amount will depend on the salary your employer pays you. Between Germany and Sweden, it goes basically like this: if you have a German contract, but live in Sweden, you are considered a resident of Sweden for all tax purposes. Therefore, the German tax office is not interested in your salary (from a tax point of view), but the Swedish tax office is. You will be required to submit a special form (trying to remember what it is, but ask at the Skatteverket, they'll know which one) detailing the total expected salary for the year that your employer will be paying you. Based on what you reported in that form, the skatteverket will calculate estimated taxes for the year (what you will be required to pay them on a monthly basis (there is also a set time of the month you'll be required to pay)). It's important to keep in mind that the Skatteverket WILL require you to pay the "social avgift" (it's about 30%), which is an overhead tax companies based in Sweden have to pay directly to the tax office before paying their employee salaries. This "social avgift" is part of the taxes companies are required to pay for employees for things like health care coverage, etc. In addition, you will be required to pay your own income taxes on the remaining amount. Therefore, it is critical to have your company calculate in the extra 30% for the "social avgift" as part of your monthly salary. Otherwise, you'll essentially be forced to cover this yourself when your company really should be covering it (and that will mean about a 50% bite out of your salary for all taxes (social avgift + standard income tax), if you have a fairly standard salary). For what it's worth, the German office of your company should understand this concept immediately, as this kind of overhead tax exists in Germany as well, and the skatteverket publishes the exact % every year (it changes from year to year).


Once you've submitted the form with your theoretical salary for the year (calculated in SEK and including the amount the company pays for the "social avgift") the skatteverket is usually pretty quick with sending back the form showing the estimated taxes you should pay every month (the form also gives the bank information for how to pay).

Just a side note: if your employer pays in Euro, you may find that your exact SEK salary varies from month to month. You will have the opportunity to do a final calculation of the actual paid salary (and, therefore, final owed taxes) at the end of the tax year based on what you actually received in SEK. The exchange rate has been pretty volatile lately, so it's something to keep in mind when filling out the information about expected salary for the year in SEK.

It sounds complicated, but quite honestly it's a pretty straightforward business, and the skatteverket knows exactly how to set this up between German contracts and people residing in Sweden (just ask around and make sure you get someone who is familiar with international tax issues at the skatteverket).

QUOTE
Good point Mångk about needing a German work permit. I ought to be able to get one as a Swedish(EU) resident, but there is problem if I can't work immediately upon becoming a resident in Sweden.


I could be wrong about this, but as far as I know, you don't need any sort of German work permit for a German contract as long as you are not residing in Germany. You will need a Swedish residency (and in this case, it would make sense to get this on the basis of family ties rather than working situation) in order to set up your taxes via the Skatteverket. The German government is not at all interested in your residency status as long as you are not resident in Germany.

QUOTE
PDX recommends a big-four tax adviser, which seems sensible, but my past experience with big-four consultancies as a small time sole proprietor has not been positive. I'd rather find a smaller scale operation where I could get some personal service.

Does anyone have first hand experience with an intra-US/EU/SE tax adviser? Big-four or otherwise.


I don't have much experience with tax advisers in this context, but quite honestly I found the Skatteverket to be really excellent in helping me get everything set up. It was remarkably less hassle than I expected. However, do also keep in mind that regardless of how you sort things between Sweden and Germany, you will still have to declared U.S. taxes every year for the rest of your life, whether you are resident in Sweden or anywhere else. But that's a whole 'nother can of worms unsure.gif
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Paul Troon
post 4.Sep.2012, 04:49 PM
Post #12
Joined: 4.Sep.2012

I might have answered one of my own questions from this link: http://www.skatteverket.se/otherlanguages/...b800094764.html

QUOTE
Dependent agent
A foreign enterprise may have a permanent establishment in Sweden even if there is no fixed place that the business operations are wholly or partly conducted from. For example, a permanent establishment is in place if a person is active on behalf of a foreign enterprise in Sweden and has an authorization that he or she habitually uses to conclude contracts in the name of the enterprise. Such a person is called a ‘dependent agent´ and may be an employee, a contractor or the CEO of the enterprise.

The agent must be dependent on the principal, the foreign enterprise. Indicators of dependence could be that the agent has a low entrepreneurial risk or few principals, i.e. that he or she receives the main part of his/hers incomes from the same foreign enterprise.


Based on this definition, my company would have to register with the Swedish government even if I was the only employee, unless I was a sole trader and had income from other clients also.
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PDX
post 4.Sep.2012, 04:57 PM
Post #13
Location: Stockholm
Joined: 2.Aug.2011

QUOTE (Paul Troon @ 4.Sep.2012, 05:49 PM) *
I might have answered one of my own questions from this link: http://www.skatteverket.se/otherlanguages/...b800094764.htmlBased on this definition, my company would have to re ... (show full quote)

No, this is about dependent agents. I assume you will not be actually conducting any business on behalf of your employer, i.e. sign local contracts, look for new local customers, do purchasing or any other business operations in which case the above does not apply.

~~~PDX~~~
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California Girl 3
post 4.Sep.2012, 05:01 PM
Post #14
Joined: 18.Aug.2009

QUOTE (Paul Troon @ 4.Sep.2012, 04:49 PM) *
Based on this definition, my company would have to register with the Swedish government even if I was the only employee, unless I was a sole trader and had income from other clients also.

Seriously, look more closely at the regular employee route. It is a known construction in Sweden (German regular employee contract, Swedish residency). There is nothing odd or usual about this, and it has the added advantage of gaining you some protection for your job under German employment laws.
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mångk
post 4.Sep.2012, 05:25 PM
Post #15
Joined: 27.Jul.2008

He has investments in the company in the US. Way too complicated and will probably cost a fortune in accountant fees every year if it is at all possible for him to be employed in Germany without a permit.

Much better to keep it simple given the dual tax treaty between Sweden and the US. Take contact with a professional as suggested by PDX and get accurate information!
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