Frequently asked questions about taxes and contributions
Frequently asked questions about taxes and contributions
If you own a trading partnership or a limited partnership or are a sole trader you pay social security contributions and municipality tax on the surplus of the business. You pay state tax on income above a certain amount.
Taxation of trading partnership and limited partnerships
Limited companies and economic associations pay corporation tax on their profit. The owners and members respectively are taxed on the salary and any dividend they decide to take out.
The reporting and payment of taxes and contributions is determined by the legal form of business you have chosen and the size of your company's turnover.
The Swedish Tax Agency will send you special remittance slips for your tax payments. Preliminary tax is paid in equal monthly payments during the income year, normally on the 12th of the month. The size of the payments does not vary according to the results for a particular month.
Employer contributions and employees' tax deductions, and in some cases VAT too, are reported monthly on special tax returns. The form is sent to the company about one month before the deadline for its return.
In Sweden, anyone can start a company in principle, although special rules apply in the case of minors. If you are bound by an injunction against trading (pursuant to the prohibition of trading act), are in a state of bankruptcy or have a custodian, as defined in the Children and Parents Code, you are not allowed to start a company.
Before the Swedish Tax Agency will issue you with an approval for F-tax, it must be satisfied that you are conducting business activity. If you have been approved for F-tax or FA-tax, you pay your own taxes and contributions to the Tax Agency.
To be approved for F-tax, you must meet the following three criteria. Your business must be:
- independent
- permanent
- conducted for profit.
- F-tax is the tax paid by an entrepreneur who is a natural person or legal entity.
- A-tax is paid by a natural person or legal entity who has taxable earned income.
- FA-tax means that you yourself are responsible for paying tax when someone hires your company and your employer deducts tax from your salary before it is paid out to you.
Value added tax (VAT) is a tax we pay on virtually all consumption of goods and services. As a business owner, you make this payment to the state. VAT does not count as income or expense in a company, and does not affect its results. In Sweden, VAT is referred to as "moms".
As a business owner, you pay VAT on what you sell, and include a VAT charge in the cost. You pay the difference between the VAT you charge on your sales (output VAT) and the VAT you pay on your purchases (input VAT). The general rate of VAT is 25 percent, although certain goods and services have a lower rate.
The Swedish Companies Registration Office charges a registration fee that varies depending on the type of business you register.
All cases that you submit to the Swedish Tax Agency are free of charge.