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Tax on rental income in another country

(No other income in Sweden)

sleeplessinsweden
post 13.Feb.2018, 08:43 PM
Post #1
Joined: 13.Feb.2018

Dears,
I am new to Sweden and it’s tax system, so want to avoid any mistakes that can come back to bite later.
I am from a non EU country and am here in work permit.
My wife has accompanied me on dependent visa and she is not working in Sweden.
However, back home in our home country we have an apartment in joint name (i.e. both of us are join owners of the property). We have a joint bank account from which we pay for the mortgage for the apartment.
When we moved to Sweden, we rented out our apartment and the apartment rental contract is signed by my wife as owner/landlady. The rental income comes to her bank account in home country.

Now in Sweden, as she is not employed and there is no income, she is not paying any income tax.
However my question is, does she have any income tax liability or the rental income in another non-EU country?
Or, am I liable to pay any income tax for my wife’s income from apartment rental in another country?
Has anybody on this forum been such a situation before?

Looking for advice from the experienced expats on this forum.

Thanks.
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Essingen55
post 14.Feb.2018, 10:10 AM
Post #2
Joined: 12.Dec.2013

You need to find out whether there is a double taxation agreement between Sweden and your country, and if so, what is written about income from property in that agreement. However, the general principle is that if you reside in Sweden for tax purposes, you are taxed on your global income. You would then be allowed to deduct an tax that you had already paid on the income in your country.
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gsurya
post 14.Feb.2018, 01:10 PM
Post #3
Location: Malmö
Joined: 8.Jan.2010

As the apartment is owned jointly by you too, half of the rental income would be deemed to be accrued to you and you have to report it as part of your income in Sweden.

Your wife also needs to report her half as part of her income, as she is now liable for her global income here being a tax resident in Sweden.

Neither of you should pay any taxes on such income in your home country, assuming there is a double taxation agreement.

I also got into this mess the last time I lived in Sweden and even double-taxation agreements dont help much as the tax authorities interpret the deductibles, capital gains and tax calculations differently.
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sleeplessinsweden
post 14.Feb.2018, 01:52 PM
Post #4
Joined: 13.Feb.2018

Thanks.
Does this mean that my wife has to pay income tax/file income tax return in Sweden on the rental income even if she is not employed or does not have any other income in Sweden. The rental amount may even be lower than the income tax threshold (e.g equivalent to 4000 kroners per month)
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gsurya
post 14.Feb.2018, 02:12 PM
Post #5
Location: Malmö
Joined: 8.Jan.2010

QUOTE (sleeplessinsweden @ 14.Feb.2018, 01:52 PM) *
Thanks. Does this mean that my wife has to pay income tax/file income tax return in Sweden on the rental income even if she is not employed or does not have any other income ... (show full quote)


If she lives above 181 days in Sweden, she is automatically a tax resident here. So her global income is taxable here. Yes, you have to declare her share of the rental income even though you dont pay tax here. That way you safeguard against tax or visa issues later.
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