Double Tax Treaties in Sweden

Foreign investors who open a company can benefit from the existing double tax treaties in Sweden, concluded with their country of origin. Our company formation experts in Sweden can give you more details on how these provisions can apply in your case.

What is a double tax treaty?

A tax treaty, sometimes called a double tax agreement, or DTA, is a convention between two countries to avoid double taxation in the case of natural or legal persons who derive income from both jurisdictions.

With what countries has Sweden concluded double tax treaties?

A Swedish double taxation agreement is in force with the following countries:

Albania, Argentina, Australia, Austria, Bangladesh, Barbados, Belgium, Belarus, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Faeroe Islands, Finland, France, Gambia, Germany, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kenya, Korea, Latvia, Lithuania, Luxembourg, North Macedonia, Malaysia, Malta, Mauritius, Mexico, Montenegro, Namibia, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Romania, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Switzerland, Taiwan, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, United States, Venezuela, Vietnam, Zambia, Zimbabwe.  

Please keep in mind that Sweden can update this list. At the same time, the treaties in force can be subject to updates or clarifications. Our experts in company formation in Sweden can give you updated information according to your country of interest.

What taxes are covered by the Swedish double tax treaties?

Our team lists examples of taxes that can be referred to in a convention for the avoidance of double taxation signed between Sweden and another state:

• State income tax;
• Communal income tax;
• State capital tax;
• Excise tax (in insurance premiums paid to foreign insurers);
• Special income tax on non-residents.

What is the mutual agreement procedure for a tax treaty in Sweden?

The mutual agreement procedure is the framework according to which the competent authorities from each treaty signatory state strive to eliminate double taxation.

The Swedish Tax Agency is the one to act as the competent authority in any and all cases related to the elimination of international double taxation.

What happens if a DTA is terminated?

In the event that a double taxation convention is terminated, however long-standing, the income generated from both states is governed by domestic tax laws.

So far, Sweden has terminated double taxation treaties with Portugal and Greece and has suspended its agreement with Russia.

What are examples of tax reductions under a Swedish DTA?

The general provision is that Sweden applies a reduced withholding tax in the case of cross-border payments made to a jurisdiction with which it has signed a double tax treaty.

For example, the 30% withholding tax usually imposed in Sweden can be reduced under a tax treaty (as specified therein) or eliminated altogether.

Does the DTA apply to all companies?

Yes. A convention for the avoidance of double taxation applies to residents of the signatory states, both in the case of EU and non-EU companies.

For EU businesses, an important caveat is that the Parent-Subsidiary directive is also in place, and this too concerns the treatment of withholding taxes for dividends. The EU provisions do not, however, reduce or cancel the reductions made possible by a DTA signed between Sweden and another EU Member State.

Contact us if you want to know more about the double tax treaties in Sweden and the provisions of such conventions concluded with a certain foreign country of interest.