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Sweden Budget Bill for 2022 Presented Including Modernized Dividend Withholding Tax, Loss Limitation Rule, and Other Measures — Orbitax Tax News & Alerts

Sweden's Ministry of Finance has announced that the Budget Bill for 2022 was presented on 20 September 2021. Some of the main tax measures of the bill include:

  • A tax reduction for contributions to unemployment funds equal to 25% of the fee paid during the year with effect from 1 July 2022;
  • Tax relief for bicycles provided by employers to their employees (bicycle benefit) such that the value of the benefit up to SEK 3,000 per year will be excluded from taxation with effect from 1 January 2022;
  • The extension of the rules on tax relief for employee stock options from 1 January 2022 such that the relief is available for companies with less than 150 employees (up from 50) and with net sales or a balance sheet total up to SEK 280 million (up from SEK 80 million);
  • A reinforced reduction in employer contributions for 19- to 23-year-olds during June to August 2022 such that only the old-age pension contribution of 10.21% is payable, which is meant to support increased employment;
  • The introduction of a tax exemption for net rental income up to SEK 20,000 for individuals renting personal assets from 1 January 2022;
  • The introduction of a modernized withholding tax on dividends paid to foreign persons including a standard rate of 30% and rules to prevent fraud and abuse, which will replace the current coupon tax with effect from 1 January 2024, although rules regarding approved intermediaries would apply from 1 July 2023;
  • The introduction of a specific limitation rule that would disallow the offset of prior-year losses following a change in ownership where it can be assumed that the primary reason for the change in ownership was to take advantage of the losses, which will enter into force on 1 May 2022 but apply retroactively for changes in ownership from 11 June 2021;
  • The repeal of the advertising tax from 1 January 2022;
  • An increase in taxes on alcohol and tobacco from 1 January 2024;
  • The implementation of the EU Directive providing temporary VAT exemption on supplies to EU bodies for COVID-19 that will apply retroactively from 1 January 2021;
  • An increase in the VAT exemption threshold from SEK 30,000 to SEK 80,000 per year from 1 July 2022;
  • A further reduction in the VAT rate from 12% to 6% on repairs to bicycles, shoes, clothing, etc. from 1 July 2022; and
  • The introduction of payment plan options for taxes that were temporarily deferred from 30 March 2020 and will be coming due in March-April 2022.

Click the following link for the Budget Bill for 2022 (Swedish language).